Do I need my real estate license?

Question

Jonathan Minerick · Answer

@Mikaela McConville In California, the state supreme court ruled that requiring an agent to join the Association of Realtors as pre-requisite to MLS access was a violation of antitrust law. So, in California, you do not need to join NAR to get on the MLS.

As a side note, here is a BP post I did about how expensive MLS access is in California and how time consuming a license is: https://www.biggerpockets.com/blogs/9561/55035-what-are-the-costs-and-steps-to-a-california-real-estate-license.

In most cases, you are better off not getting a license and just using flat fee real estate services and working directly with listing agents. You are more likely to get the deal when there is not an agent on your end (and you won't be claiming the commission as an agent), as the listing agent will make more money by pushing your offer.

Patrick Anderson · Answer

I'm taking my real estate license exam tonight.

The information was interesting and informative. I also think that those 60 hours could have been better spent. I'm a new investor so I still may need an agent to help guide me through some of the processes during my first deal, as I will happily pay someone to be in my corner explaining everything to me in case my book knowledge isn't enough.

It seems like getting a license is a viable option for people who are more experienced than me, such as in the case of @Justin Owens, who seems to be gaining a lot of value from it. I'll be interested in what other people have to say.

Justin Owens · Answer

@Mikaela McConville I acquired my license in 2003 intending to use for my own real estate needs. I have since grown to work with many buyers and sellers over the years as well. You mentioned access to the MLS, which is one key component to finding deals but what will happen when you do find that deal? Will you then want to go use a lockbox key to view the property quickly without having to wait for a real estate agent? I would. Would you want to be able to act as your own agent and save/earn the commission offered by the selling agent? I would.

Look at the whole fee structure to be a fully licensed agent per year and compare that to the commission offered on just one investment deal you may purchase. I bet that the commission from the single deal would pay for all of the fees for that year or more. It does for me.

Case in point, several months ago or maybe last year I set up alerts on MLS to send me emails whenever any property in my target areas comes on market or there is a status change. By watching the area via the updated emails I know what values are. One morning in June I awoke about 6 am and noticed I had an alert email. As I was wiping the sleep from my eyes I clicked on the email then followed a link to the MLS listing for a home in an area I want to buy in. I saw a home far below what the market value should be. I figured it needed a lot of work but there was a HUGE spread on the cost of this home and the ARV for that area. I had prepared the offer and saved it in an email draft. I then drove by the property and sent it from my phone in the car. This all happened in a matter of 2 hours. I was one of many offers received by the seller (it's a very hot market). Ultimately my offer was accepted and we are in the very early stages of preparing the property for renovation. If I had to wait for my real estate agent to write an offer for me, I likely would have been too late to be a viable offer for this home.

In your state things may be different but in Arizona being a fully licensed agent has been very beneficial for me.

Do I need my real estate license?

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