Does flipper need to be real estate agent as well?

Question

Hi everyone, I am a new investor in co. I am looking for my 1st invest  property currently. While doing my research, I found oftentimes, a flipper always either a real estate agent themselves, or married to one, or at least is very close to one. I am a CPA myself and my hubby is a contractor, so I am thinking is that necessary for me to be a licenced agent ? Thanks for any opion!

Michael Zau · Answer

I will add that I have a license.  It serves me no purpose as an investor, OTHER than having access to the confidential remarks on the local MLS.  How it holds me back, is that when you hold a license, you are, or at least from a moral compass, should be held to a higher standard and follow the ethics of a real estate licensee.  Do you tell the sellers that they can and should sell for more than your purchase price.  Ethics says that you have a responsibility to do so.  I consider the small amount of comissions saved nothing; compared to the work involved that a realtor does for me.  I have hired other realtors so that I can search, negotiate and find other deals. You live in a lower dollar amount area, so I consider that a small amount, where I live in San Diego, the commssions saved are significantly higher, but I still hire realtors at full price . Over time you will find that the opportunity cost of time will outweigh your desire to be a realtor licensee.

Lynn McGeein · Answer

The reason many are agents or related to one is to save the commissions when purchasing and selling.  It can add up to quite a lot of savings, especially if you find a broker who charges a small flat fee and lets you keep the rest.  If you can find an agent who will work with you, perhaps reduce commission on selling the home if you buy it through them, or if you don't plan on doing many per year, it's likely not worth it to get your license and pay all the costs involved.

Scott W. · Answer

I use a flat fee service and pay $200 to list it. I have to provide my own lockbox and I have to schedule all the showings (which basically means replying to a text or a sometimes phone call).

I don't see a need (at least for me) to become a realtor.

Corby Goade · Answer

I totally disagree with most of the posters above. I am an investor and a flipper and literally just got my license last week. What is the downside? You will be paid back your entire investment on your first sale. You can look at any house on the MLS whenever you want to. You have real time access to new listings. You can pull your own comps immediately. You will network with sellers and other agents and get inside info on properties before they hit the MLS. There are many brokerages that serve investors and the agents and brokers are investors- that's free, built in mentoring. Sure, it costs a few bucks to get started and you have to spend a few hours in a classroom every couple years. BUT, you keep an extra 2.5% or so on every property that you buy or sell, plus you have all kinds of info and networking opportunities at your fingertips that you wouldn't otherwise. Sure, it's not necessary, but I can't think of a reason not to.

Ashley Zhang · Answer

Lynn, you have a good point! I prob can only do one property at the first. I do have a dear friend can help me on buying and selling, and she also will give a sweet discount. so I might thinking about getting a license only when I can invest in multiple properties. thanks a lot!

Ashley Zhang · Answer

thanks Angie!I agree with you that I can learn as I go. even if I have a license, but I don't have any experience which won;t help me either. Google and youtube became my best friends in these days! thank you again for the comments! wish you a good luck too :)

Ashley Zhang · Answer

thanks Martin! your example explained very well! I agree to keep the license active may cost me more. On top of that, I need the experience requirement which is hard to get.

JD Martin · Answer

I wouldn't bother unless you find you're going to do this as a career. There are time and costs involved with becoming and staying licensed as a realtor. I don't know about your state, but in mine you have to work under a broker for at least 3 years before you can be your own broker, so you're only going to save the portion you'd pay yourself, i.e. the brokerage is going to get their cut plus whatever your office costs are. If you flip a house for $200k, and you're selling it to someone else under their agent, your cut of 6% is only $3k. You might spend that, or more, just getting your license, keeping your errors & omissions insurance, paying office costs, etc.

Does flipper need to be real estate agent as well?

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