Investor · Hamden, CT · Member since 2014 · 33 posts · 10 votes
I am investor looking to buy the first rental property that I do not live in, and I have been contemplating getting a real estate license. I am wondering what the advantages and disadvantages of getting the license would be. I think the obvious advantages would be access to the MLS and being able to see properties without having to wait on someone else. As for disadvantages, I have heard that a licensed real estate agent would be required to disclose the actual value of a house when making an offer. However, I do not know if that is true. For example, if an agent were buying a house for $60K that is worth $100K, then the agent would have to close the actual worth of $100K.
Assuming you are not listing the property for the seller, which can get a bit stickier, all you need disclose is that you, as buyer, is a licensed real estate agent. I disclose to the listing agent that I am looking at the property for my own purchase, when I first contact them and I add a disclosure to any eventual offer.
For the most part, I prefer being licensed. However, there are certain transactions that you can do as an investor, that you cannot do as a licensee. Biggest example is an investor can take an FHA loan subject to and a licensee cannot. If some cat will take $2500 down and let you do a wrap or subject to on his FHA loan, don't have a license or you could end up meeting an FBI agent.
To @Account Closed's point, there are a few downsides for some investors (though I still recommend it):
- It takes a decent amount of time to get your license and to keep your license
- It can cost a decent amount if you're not doing any transactions for a year or two at a time
- In some states, you'll be severely restricted in your marketing ability. For example, agents in Maryland cannot solicit for short sales. Also, your marketing is going to have to have a decent amount of disclosures (your license status, fair housing notes, etc) -- for some investors, this is a detriment.