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Updated over 8 years ago, 03/17/2016
Investor -- Getting Licensed As An Agent.
Hi everyone,
I often hear about investors getting licensed as an agent for several reason - access to MLS, saving on buying/selling expenses, etc. I'm interested in getting a license to have access to their resources in order to find deals and get an inner insight on the current market. However, I have enrolled in the 60-hour course to obtain a license in my state, VA, and found out that to be licensed you MUST work for a brokerage firm for a minimum of 3 years, otherwise you're given an inactive license (which is like not having one) I'm not interested in wasting 3 years working as an agent before I can get a broker's license to work on my own. So how do some of these investors with licenses do it? Is it just my state that requires you to work as an agent to keep an active license?
I don't plan or want to be an agent. I plan on always using an agent to buy/sell all my properties.
All advice, comments or thoughts are welcomed.
I thank you all in advance!
@Worth Styles they don't do it (work on their own) they work under a broker. I can only think of two active investors who are also brokers. Most are agents working under other brokers. Some brokers charge flat fees instead of a commission split and this is usually where the investors wind up.
I live in VA, don't waste your money. MLS is a joke, the real deals are made by eyesight and cold calling owners. I cut agents out years ago, and have closing cost down to about 1% on most deals.
Worth Styles
In Georgia I don't think you HAVE to work under a broker for any period of time but if you actually wanting to be an agent it's best that you do to build your foundation and learn the ins and outs. Here in GA you are required to complete a 75hr course. Maybe that's the difference.
I do know a few investors like yourself who wanted the education more so than to be an agent. They took the class but never took the actual test. From my understanding as a licensed RE agent it's slightly harder to be an investor (or shall I say a "creative" investor) as all your transactions are scrutinized by the board of realtors. So in a way they are held to a different more strict set of rules. On the flip side (no pun intended) I've been told that if you're doing everything the right way, it's no big deal.
Hope this helps...
Will G
I am wanting to figure out the same thing. Do you have to approach a broker who is willing to let you close your own deals under his brokerage, without conducting any other agent work than your own purchases? What is the cost for something like that?
@Ned Carey Thanks, that makes sense. Do you happen to know how likely it is that brokers let an agent close on his own deals only and nothing else? Or are they rare and those investor just got lucky?
@Carolyn Morales I'm not sure about the first question, I'm wondering the same thing, but for the second: it depends on the deal you work out with the broker when you join them. Some take a percentage of your commission, others take a flat fee plus expenses.
In CA you have to be under a broker, and I believe it'll be the same elsewhere. There are many who have their licenses and are under a broker. If you're just looking for MLS access and some bare minimums, look for a broker that doesn't have many fees..no desk fees, no this fee, no that fee..they're out there, but you need to find them.
Originally posted by @Worth Styles:
Do you happen to know how likely it is that brokers let an agent close on his own deals only and nothing else?
Actually I think they are common. As long as you are closing deals just about any broker is happy to have you. Flat fee brokers charge a set fee per month and perhaps an admin fee per deal. So they don't care if you do only your own deals they are getting their fee every month.
I was licensed here in Georgia from 1989 - 1997 until I took a career detour and let my license lapse. Currently I'm re entering the real estate field and I am (once again) enrolled in a RE course [Real Estate has much better retirement options than being in entertainment.] But, being under a broker is not an employer - employee situation where someone is constantly watching over your shoulder, you do have freedom to work your own deals and since you are bringing in deals, that's all the broker wants. Trust me, those 3 years will go by fast and the big difference in being a broker yourself is you get to keep all of the revenue (commission) and charge the client as low or as high as you'd like.
You will get a tremendous wealth of knowledge from the RE course and the experience that the broker brings to the table - you may find valuable while you are with him/her. I plan on using my license to direct my real estate business toward the commercial realm in the near future.
Polar Prutaseranee (who replied just above) gives some very good advice on finding a broker, you should also seek the investor friendly brokers.
I wish you great Success!!!
I am an investor and recently got my license for the same reasons you mentioned, also to force networking and get more involved in real estate.
I would advise you start meeting with brokers. I am like you in that I am not interested in being a full time agent. I found a great broker that sponsors a lot of investors and does not require desk time or office fees or anything like that.
Maybe you can find one in VA that is similar and while you wait the three years you can find yourself some deals and get some commissions. I though about becoming a broker originally but now I really like the access and freedom I have as an agent.
Best of luck!
In Georgia you do have to work under a broker for 3 years... But all that means is you pay them a monthly fee. I think its worth it. You have access to the MLS plus a lot of data. You can still find very good deals on the MLS and if not you can use it for research.
I've closed many deals that I bought for myself as an agent and never heard a work of negatively from the board.
I am in the exact same boat here in California. Currently taking the course thru real estate express.
I have just completed my licensing class in Ga. I was licensed for about 10 years before the real estate market tanked. I got out in 2008. I only want to be licensed for my investment properties. The real estate office that I am going to join charges a monthly fee and and you are on a 30/70 split. Which is totally fine. I wouldn't want to be a broker to keep all the money. It's just not worth the head ache, too much liability. Even when you are agent you held to a much stricter code of ethics which is fine if you are doing everything right. However if you are someone that likes to cut corners you could get yourself into a lot of trouble. I have a full time job so going out there and cold calling and trying to find my next deal just isn't feasible. The last home I bought I just called the agent directly. I told him I had no realtor and that I wanted the house. To tell me what it was going to take to get it. I bid as high as I could and I got the house. Most of the info you need to know about the comps in the neighborhood are available on Zillow and other sites.
@Watson Smith, do you also Wholesale properties? If so, I'm interested to know how you got your broker to "understand" 😩 your activities as an Investor/Realtor?
@Renee Cato , I do not wholesale properties I only buy them under my S-Corp. If I did... I would do it until they questioned me and then explain. Nothing illegal about it to my knowledge. 😇
States like Georgia are tightening up the education requirement to become an agent and remain an agent. Yes- I think it's important to have a license. I use mine strictly for investment purposes, look up everything from mortgage data, past sales of the property, neighborhood statistics, etc. Then, use my license to list my own properties for sale, determine actual comps, etc. Yes- people can use Zillow...it's usually close - but its data can bewildly off with its Zestimate.
The question of whether you need a broker - as an agent, is somewhat moot - to someone in the business. There is a reason why there are agents and there are brokers. I am an agent in Georgia. I have a Broker license in Florida - but inactive now due to me living out of state and not doing any business there right now. Brokers maintain the office and have the capacity- by law- to hire agents. Agents are not allowed to conduct business alone- never have. If the agent does something illegal, unethical, etc- the broker can be fined, as well as the agent. Brokers must review and approve all the contracts, stipulations, maintain a proper escrow account and account for all the money for each transaction, etc. Agents must follow the rules of the Broker at all times. That said, there are different payment arrangements among brokerages.
As an investor - look for brokers that will hold your license, allow you to conduct business without generating a commission due ( for example- doing wholesale deals off MLS), and only charge a monthly fee and let you keep most of the commission. I would not recommend any broker with splits above 90/10 - since there are so many willing to reduce this further. My broker charges me $60/month. Each MLS deal I must pay him $350 - and keep the balance. Wholesale deals- I am on my own - no paperwork needed, no MLS listing, etc - which is great. Of course- when I list my homes for sale, the entire commission of the deal goes to the broker- who then pays me everything except his small $350 cut.
There are other reasons to have a license that can assist you in selling wholesale deals - which I won't discuss here - due to the length of this post! If interested, PM me.