To Obtain a Realtor's License or Not?

Question

Hello BPer's,

I frequently listen to podcasts on real estate investing, and business. One podcast that I listen to in particular is Real Estate Mastery with Joe McCall. During one of his short shows, "REI in your car", he mentioned that he believes one of the keys to becoming well rounded in a successful real estate investing career was to obtain a realtor's license. He has said in other shows that having the license has many benefits, very little downsides.

So, what say you? Is it better to have the license to add to the diversity of your real estate investing? Or is it better to focus solely on your particular market niche?

Any feedback or comments are welcomed, I love to have these types of conversations...

Pamela DeLorenzo · Answer

I disagree with the podcast that you were listening to [Real Estate Mastery with Joe McCall] @Antonio Watts. There are plenty of well rounded and successful real estate investors who do not have a license. While it's true the license has many benefits, there are some downsides such as a minimal $2000 yearly investment just to break even. Then there are the continual classes that are mandated and the office politics etc. That said, I do agree with @Jeremy Pakalka that being able to search the MLS on your own and do your own comps is huge. You cannot rely on Zillow or Trulia ever if you're seriously looking at doing a deal. It's okay for general research, but they can be so far off base it may cost you thousands. I think trying to avoid paying the realtor's commission is not a reason to get a license - a realtor can be a lot of help. I suppose if you're doing that many deals it might be a reason, but then you could spend so much time being about the business of being a realtor and not an investor. Many people who are realtors are also successful investors so I'm not suggesting not to take that route, but you have to weigh what you want to do with your time I guess. I totally agree with you @Sid Leibowitz - NYS gives tenants more rights than landlords for sure!

Sid Leibowitz · Answer

I am in New York. I believe that you can access MLS by going on line and access the listings and defining your search. You do not need to be a realtor to search for listings, However you do need to be a realtor to utilize the network of realtors to purchase and to collect a commission at least here in NY. You can also use Zillow and Trullio as well as other listings for free and at times you may find a FSBO, foreclosure, short sale etc. there. The Crash Course training for sales persons license gives you a speedy low cost education in the industry terminology and process as well as valuable clarifications to questions and answers that you will find useful in the future along with other like minded students. A crash course is 75 hours here and if you pass the course exam you may take the State Exam if you choose, find a real estate broker who is willing to sponsor you and work as a salesperson or leave the license parked at the Depot of State and have an education on working in other aspects of real estate. In New York, you can have an attorney be the Broker of Record and not even have to have an actual Real Estate Brokerage office sponsor you. I agree that it is worthwhile having the license training if you are serious in the mechanics of investing in real estate. Your State laws may differ so talk with someone in the industry in your state so you are not lead into a classroom education and investment in time and money until you solidify your investment path. I only flip houses now as I decided that being a landlord was not how I wanted to invest my time or money. I found that NY gives tenants more rights than landlords here and could jeopardize me paying a mortgage, injure credit and maintaining a property was more time consuming than flippig and could not see the profitability here. In other States in make more sense. Check your local laws. The real estate course helped me discover my path.

Tim L. · Answer

While Jeremy Pakalka is correct, I think the biggest reason to get your license is to save money by not having to pay a realtor's commission on your side of the deals. I've only been doing 1 deal per year for myself (and about 4-5 for friends/family) and I more than make up the costs to keep my license. I bought my 2nd property this year, made ~$5k commission there, listed my first property for rent, saved $750 there. The savings add up. And I'm just a small time investor getting started. Consider myself in the camp that says if you're serious about real estate investing, it would be silly not to get your license.

Jeremy Pakalka · Answer

@Antonio Watts The biggest advantage you will see is being able to search the MLS on your own. You can comp your own houses while in the car so you know what houses are selling for in that area. You can also search the Hot Sheets to see what is newly listed. Some people have a house they want to sell that is in horrible condition and all they do is call an agent to list it. Since it is listed, there will be a lot of competition but if you track it, you will know the price investors are paying in that area. It will give you more confidence in offering on off market leads in that area.

Mindy Jensen · Answer

I don't know how it is in New York, but I'm pretty sure you have to be licensed in order to access the MLS.

Jacob Ghena · Answer

Get your license and search out an office where the Realtors work with lots of investors or do flips. You will learn more, network and probably get a few deals by mere proximity. Not to mention earn a commission.