Author Topic: Is anyone a real estate agent as a side gig?  (Read 2768 times)

JLee

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Is anyone a real estate agent as a side gig?
« on: September 13, 2016, 03:03:13 PM »
I moved from AZ to NJ a year ago and rented my house when I left - I'm hoping to get back to AZ in the next year or two, and am thinking about buying another house once I get out there (I love my house, but I have friends and family living there now and don't really want to kick anyone out - plus it's making me money!).  I started looking into real estate stuff today and realized that there's not a whole lot of cost or time involved to get a real estate license in Arizona (6.5 college credit hours and a few hundred $ for the test).  Given that I could probably knock the whole thing out for under $3k without even waiting for AZ residency (well under $1k if I wait for in-state tuition), I'm starting to toy with that idea...thinking it could be something I could do occasionally on the side, and it'd pay for itself from buying just one house (which I'll probably do if I move back regardless).

Anyway...rambling a bit, but has anyone found that it's worth getting the certification while not selling real estate as a primary job?

Edit: $399 course..apparently I don't have to go through the college.
« Last Edit: September 13, 2016, 03:22:27 PM by JLee »

WranglerBowman

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Re: Is anyone a real estate agent as a side gig?
« Reply #1 on: September 14, 2016, 07:26:07 AM »
I picked up my MD Real Estate license 4 years ago.  Just had to sit through a 40 hr class and pass a 2 part exam.  The main issue becomes what broker to put your license with based on how you plan to use it?  Def shop around for this aspect and how often you plan to use it.  I got my license just for future personal sales, so I can pay myself the 3 or 6% and because I had the time to take the class that year.  I keep my license with a broker as a "referral license", I just refer people to them and they give me a % of any sales they make due to my referral and they pay the fees to keep my license active and pay for continuing education credits.

JLee

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Re: Is anyone a real estate agent as a side gig?
« Reply #2 on: September 14, 2016, 07:28:49 AM »
I picked up my MD Real Estate license 4 years ago.  Just had to sit through a 40 hr class and pass a 2 part exam.  The main issue becomes what broker to put your license with based on how you plan to use it?  Def shop around for this aspect and how often you plan to use it.  I got my license just for future personal sales, so I can pay myself the 3 or 6% and because I had the time to take the class that year.  I keep my license with a broker as a "referral license", I just refer people to them and they give me a % of any sales they make due to my referral and they pay the fees to keep my license active and pay for continuing education credits.

Interesting. AZ has two different licenses, I think...salesperson and broker. Would I likely be best off trying to become affiliated with an existing broker?

WranglerBowman

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Re: Is anyone a real estate agent as a side gig?
« Reply #3 on: September 14, 2016, 08:56:01 AM »
You will likely have to have your license under a broker and you have to work under a broker for generally 4 or 5 years then take a test to become a broker.  As a broker you have to pay all kinds of annual fees and insurances and  I think you only get your brokers license if your looking to start your own real estate company and then have agents working under you. 

JLee

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Re: Is anyone a real estate agent as a side gig?
« Reply #4 on: September 14, 2016, 09:03:01 AM »
You will likely have to have your license under a broker and you have to work under a broker for generally 4 or 5 years then take a test to become a broker.  As a broker you have to pay all kinds of annual fees and insurances and  I think you only get your brokers license if your looking to start your own real estate company and then have agents working under you.
Ah, I see.  How difficult is it generally to find a broker under which to have your license, if you don't really plan on working for them?

Another Reader

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Re: Is anyone a real estate agent as a side gig?
« Reply #5 on: September 14, 2016, 09:37:26 AM »
As you discovered, it's easy in Arizona to take a class and pass the salesperson exam.  To have an active license, however, you have to put that license under a broker.  If you are planning to buy and sell on your own account, there are a few inexpensive places to work. Stay away from the fee split agencies and the Keller Williams model.  You want a broker with low transaction fees and no desk rental or whatever they call the monthly fee now.

Real estate is tough to do as a side business.  You have to show properties when people want to see them, and you have to work with title companies and lenders during business hours.  You need to keep up with the market on a daily basis and and spend time selling your services.  Continuing education is required to maintain the license.  There are fees for the MLS, lockbox access, and for board membership.  It adds up to a couple of thousand to get started and there are recurring costs.

JLee

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Re: Is anyone a real estate agent as a side gig?
« Reply #6 on: September 14, 2016, 09:44:21 AM »
As you discovered, it's easy in Arizona to take a class and pass the salesperson exam.  To have an active license, however, you have to put that license under a broker.  If you are planning to buy and sell on your own account, there are a few inexpensive places to work. Stay away from the fee split agencies and the Keller Williams model.  You want a broker with low transaction fees and no desk rental or whatever they call the monthly fee now.

Real estate is tough to do as a side business.  You have to show properties when people want to see them, and you have to work with title companies and lenders during business hours.  You need to keep up with the market on a daily basis and and spend time selling your services.  Continuing education is required to maintain the license.  There are fees for the MLS, lockbox access, and for board membership.  It adds up to a couple of thousand to get started and there are recurring costs.

Is it worth doing if I planned on buying another property every couple of years, or is it better to just eat the $3-6k in realtor fees every time?  I'm more interested in looking into it for my own use and to help friends find houses (basically word of mouth only), not really to start a full-fledged real estate practice.

WranglerBowman

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Re: Is anyone a real estate agent as a side gig?
« Reply #7 on: September 14, 2016, 11:24:38 AM »
As mentioned look into a "referral" type part time gig with a broker.  This has worked out really well for me and in the future if I decide to buy a property the broker said they would work with me so that I would get around 90% of the selling agent fee paid to myself.  Every broker has a different fee/cost structure so you have to see what works best for you.

Another Reader

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Re: Is anyone a real estate agent as a side gig?
« Reply #8 on: September 14, 2016, 12:08:27 PM »
There are disclosure issues with being an owner agent, and tenants may push to have you held to a higher standard in any dispute.  I don't live in Phoenix, so I preferred incentivized agents on the ground that would go look at properties and give me their opinions.  If I lived there, I would probably get licensed and go with the brokerage my current agent uses. 

By the time you get back, the market may have rolled over, and you might find properties that make sense.  You won't find that today.  The good news is that your house is worth a lot more than when you bought it.  If you haven't refinanced, this would be a good time to do so.

JLee

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Re: Is anyone a real estate agent as a side gig?
« Reply #9 on: September 14, 2016, 12:12:13 PM »
There are disclosure issues with being an owner agent, and tenants may push to have you held to a higher standard in any dispute.  I don't live in Phoenix, so I preferred incentivized agents on the ground that would go look at properties and give me their opinions.  If I lived there, I would probably get licensed and go with the brokerage my current agent uses. 

By the time you get back, the market may have rolled over, and you might find properties that make sense.  You won't find that today.  The good news is that your house is worth a lot more than when you bought it.  If you haven't refinanced, this would be a good time to do so.

I was noticing that - rental properties are expensive now.  My house has gone up a lot...I'm not sure it's worth refinancing (3.49% currently), but I did get a BPO and drop PMI, which was nice.

Ensign1999

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Re: Is anyone a real estate agent as a side gig?
« Reply #10 on: September 14, 2016, 01:00:32 PM »
I was noticing that - rental properties are expensive now.  My house has gone up a lot...I'm not sure it's worth refinancing (3.49% currently), but I did get a BPO and drop PMI, which was nice.

It still might be worth it.  I ended up refinancing a rental I own that was at 3.5% down to 2.625%.  Closing costs were a little higher than I would have liked due to buying about 1.6 points to get the rate down, but the math worked out to where it was worth it.  I called about three mortgage sources and they all said they couldn't help me/it wouldn't be worth it because the best rate they could give on an investment property was 3.25, but AIM Loan was able to do much better.  Not an advertisement for them, but they might be worth looking in to if you plan on keeping the place for a while.  Their web site has an online quick quote that will give you an idea if it is worth pursuing.

Landlady

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Re: Is anyone a real estate agent as a side gig?
« Reply #11 on: September 14, 2016, 01:13:38 PM »
Following because I've considered this as well.

The things I've learned are.
1. The average customer acquisition cost for a real estate agent is ~$3,000. So only if you are good at marketing and networking can you really make this number lower.
2. If you work under a broker your commission gets cut in half!

JLee

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Re: Is anyone a real estate agent as a side gig?
« Reply #12 on: September 14, 2016, 02:12:36 PM »
I was noticing that - rental properties are expensive now.  My house has gone up a lot...I'm not sure it's worth refinancing (3.49% currently), but I did get a BPO and drop PMI, which was nice.

It still might be worth it.  I ended up refinancing a rental I own that was at 3.5% down to 2.625%.  Closing costs were a little higher than I would have liked due to buying about 1.6 points to get the rate down, but the math worked out to where it was worth it.  I called about three mortgage sources and they all said they couldn't help me/it wouldn't be worth it because the best rate they could give on an investment property was 3.25, but AIM Loan was able to do much better.  Not an advertisement for them, but they might be worth looking in to if you plan on keeping the place for a while.  Their web site has an online quick quote that will give you an idea if it is worth pursuing.

I only owe $122.5k on my house, so the ~$5k they want in closing costs is a bit much for me. To be fair, I haven't ran the math to see how much I'd ultimately save over what timeframe.

waltworks

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Re: Is anyone a real estate agent as a side gig?
« Reply #13 on: September 14, 2016, 07:50:01 PM »
It is not worthwhile as a "side gig", there's a decent amount of overhead time/money/PITA involved in addition to the up front costs. If you want to buy/sell a few properties in a VERY high end market, might be worthwhile - but FSBO/writing your own offers without an agent is probably an easier option.

-W

JLee

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Re: Is anyone a real estate agent as a side gig?
« Reply #14 on: September 14, 2016, 08:21:23 PM »
It is not worthwhile as a "side gig", there's a decent amount of overhead time/money/PITA involved in addition to the up front costs. If you want to buy/sell a few properties in a VERY high end market, might be worthwhile - but FSBO/writing your own offers without an agent is probably an easier option.

-W

In that case, would there be a possibility of a reduced purchase price since the seller isn't paying a buyer's agent commission?

Another Reader

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Re: Is anyone a real estate agent as a side gig?
« Reply #15 on: September 14, 2016, 08:59:05 PM »

[/quote]

In that case, would there be a possibility of a reduced purchase price since the seller isn't paying a buyer's agent commission?
[/quote]

It depends on how flexible the seller's agent is.  If they are willing to reduce the total commission, you should be able to negotiate.  If they won't, there's no leverage.  The seller's agent represents the seller, not you.  You need to be experienced in the process and capable of negotiating within the parameters of the real estate transaction to be successful.   

In a hot market, no one will bother to talk to you.  But you don't want to buy investment properties in a hot market anyway.

TheOldestYoungMan

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Re: Is anyone a real estate agent as a side gig?
« Reply #16 on: September 19, 2016, 03:59:14 PM »
Ask around locally in your area and you can sometimes find independent brokers that will work with you on the overall price you're paying for their services.

Establish the relationship with them to where it's going to be worthwhile in terms of future business, tenant placement services, and referrals as you build up your real estate empire.

So far I managed to get a free washer&dryer from my agent upon closing.  It's not much, but it works out to about 20% of their total fee.

If your sole reason to do it is to act as your own agent, and not because you want to be an agent for others, this path is more likely to reduce the costs you see on the transactions.  A good agent actually is worth the money, even if they do tend to give advice that is remarkably self serving.