Author Topic: Real Estate License?  (Read 5205 times)

Left Bank

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Real Estate License?
« on: December 03, 2014, 12:53:23 PM »
Is it worth it to get a real estate broker's license even if you do not want to be an agent?
Perhaps it could aid your search for investment properties? 2.5% off purchase price?
I also heard that with a license, even if you do not want to be an agent, you can refer clients and receive a referral fee if a transaction later occurs (passive-ish income?)
Anyone have any thoughts on this? 
Thanks,
LB

pzxc

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Re: Real Estate License?
« Reply #1 on: December 03, 2014, 12:57:46 PM »
The second part is true even without a license -- anyone can refer people and get a referral fee if that's the agreement you have. No license required.

But yes, a real estate license can help you save on the commission.  Or you can just, during negotiation, ask that the seller pay the realtor commissions and/or the closing fees and/or anything else.  It's whatever the seller and buyer agree on.  Or you can buy FSBO and neither of you pay commission.

But for most transactions, yes being your own realtor can save you half of the 6% or so typical commission.

Left Bank

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Re: Real Estate License?
« Reply #2 on: December 03, 2014, 01:01:08 PM »
I think it is illegal, in the US at least, for agents to pay non-brokers a referral fee.

pzxc

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Re: Real Estate License?
« Reply #3 on: December 03, 2014, 01:05:05 PM »
Hey, I looked it up and you're right.  Yet another monopolistic restriction on free markets that saddens me.

You can, however, collect a "finder's fee" from the BUYER of an investment property, without any kind of license.

sammybiker

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Re: Real Estate License?
« Reply #4 on: December 03, 2014, 02:52:54 PM »
I think there is huge value in going this route, for the reasons mentioned above.  Having that MLS access and being able to be the FIRST to write a strong offer, ability to contact and ultimately form relationships with the various listing agents...huge value.

And being an investor yourself, there is additional perceived value when marketing yourself to other investors who don't have their license.  You understand the 1% rule, 2% rule, true cash flow (not just rent less mortgage), etc.

How many times have I had an agent tell me "You'll be cash-flowing great!", hahaaaaaa...

For the small cost to obtain and hang your license, I think it's a great investment. 


attica

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Re: Real Estate License?
« Reply #5 on: December 03, 2014, 04:40:05 PM »
I just quit being an agent so I want to chime in here.  There's two options here:

1. Be an agent.
If you get your license and hang it with a broker, you'll be a full fledged agent with the perks I think you are looking for, namely MLS access and the ability to schedule your own showings. But you have to pay for these things. My local board partnered with Sentrilock so that you need their card to open lock boxes. Board fees were like $800 for the year. That's not including brokerage fees. My brokerage got $85 a month and then 40% of any commissions I brought in.

2. Just be licensed.
The other option is to get your license and hang it with a holding company which is what I do now. It's $100 a year and my license stays active allowing me to get paid referral fees and can lead to more tax deductions if you do a lot of real estate investing and rentals. (See an actual accountant for details on this)

But you're not getting that sweet MLS access that you want. (I'd love to keep mine. The 'public information' I have access to is alarming.) You can buy your own properties fairly easily, as you can write your own contracts, licensee or not, most places have standard fill in the blank contracts that you can download online. But it's getting in to the listings that may be somewhat of a pain as you'll have to rely on the listings agents. And selling can also be a pain since you won't have the access to list in the MLS.

And FYI most real estate licensing classes don't teach you a damn thing about being a real estate agent, like say how to fill out a contract.

(Please keep in mind that this info may not hold true from state to state or even in different parts of the same state. This is how is works around the Chicagoland area)

Left Bank

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Re: Real Estate License?
« Reply #6 on: December 03, 2014, 05:35:31 PM »

2. Just be licensed.

But you're not getting that sweet MLS access that you want. (I'd love to keep mine. The 'public information' I have access to is alarming.) You can buy your own properties fairly easily, as you can write your own contracts, licensee or not, most places have standard fill in the blank contracts that you can download online. But it's getting in to the listings that may be somewhat of a pain as you'll have to rely on the listings agents. And selling can also be a pain since you won't have the access to list in the MLS.


Thanks for replying but could you explain this to me.  Why would I not have MLS access?  Can't I just subscribe?  Also, why can't I list to sell?

attica

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Re: Real Estate License?
« Reply #7 on: December 03, 2014, 06:01:06 PM »

Thanks for replying but could you explain this to me.  Why would I not have MLS access?  Can't I just subscribe?  Also, why can't I list to sell?


I apologize, I've gotten as far as "I'm not dropping another $500" and so am letting my current access lapse at the end of the month. But further inquiry reveals that I may be wrong, which is a common occurrence I assure you. I'll double check with my broker so I can give you the correct information.  I'll pop back in when I get an answer.

BrettGoldsmith

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Re: Real Estate License?
« Reply #8 on: December 03, 2014, 07:45:33 PM »
Getting a real estate license is relatively easy and inexpensive. You need to pay MLS dues to have your own MLS account and access to zip forms.

Amosla

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Re: Real Estate License?
« Reply #9 on: December 03, 2014, 09:10:11 PM »
I just responded on another board with some info that might help. To get MLS access you need to be a Realtor, meaning you need to join the Association of Realtors that comes with lots of fees. To just be licensed you are just a Real Estate Agent. A Realtor is a Real Estate Agent, but not necessarily the other way around. Here were my yearly fees to be a Realtor:

Annual Realtor Association Fee = $479
Quarterly MLS Fee = $120 x4
Monthly Admin Fees = $85 x12
Supra Fee (lock box) = $115
Continuing Education = $100
State Licensing = ~$100

Also understand the share they take of the commission split. My last split, I kept 100% of my side of the transaction, but paid my company a transaction file fee of $395 for each deal. When I was a new agent I got 85% with no fee.

http://forum.mrmoneymustache.com/ask-a-mustachian/weekend-real-estate-sales/msg472447/#msg472447

Chrissy

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Re: Real Estate License?
« Reply #10 on: December 03, 2014, 10:22:22 PM »
Attica, I'm also in the Chicagoland area, and am thinking about getting my license to help us buy a condo.  Information on holding companies has been hard to come by.  Would you tell me more?

attica

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Re: Real Estate License?
« Reply #11 on: December 06, 2014, 01:04:19 PM »
Chrissy, are just buying the one condo? Because honestly, I wouldn't bother. It's a big pain the butt to get and then maintain the license if you're only going to do one transaction. Besides as a buyer your agent will get their commission from the listing agent. Yes, the money technically comes out of the pot of money you bring to the table but the pay comes out of the seller's share.

And the classes are seriously the most boring thing ever, remember you can't get those 90 hours of your life back. But I'll talk to my managing broker on Monday and get you the details on holding companies then.

tracylayton

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Re: Real Estate License?
« Reply #12 on: December 07, 2014, 08:38:06 PM »
My dues  and MLS fees are about $1500/year. You'll probably need to do more than 1 deal a year to make it worthwhile. However, if you're going to do more than that...go for it. I also list my rentals on the MLS and save money finding the tenants. Also, I find the "best" deals immediately since I pull a "hot sheet" several times a day.

adamcollin

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Re: Real Estate License?
« Reply #13 on: December 07, 2014, 10:30:04 PM »
Having a real estate license can be of no harm. It will widen up your career options. If you do not want it as a profession, sooner or later, it will surely add on to your source of income.

attica

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Re: Real Estate License?
« Reply #14 on: December 08, 2014, 11:49:15 AM »
Okay here's the deal. If you put your license with the holding company you can't be a member of the local realtor's board, which you need to be in order to get access to the MLS. Your license remains active under the holding company for around $100 a year (depending on the company) but you're basically an inactive agent. While I have enough information to be dangerous enough to buy a property without the help of another agent, in order to sell and therefore list my property in the MLS I would have to refer out to someone with access. I would get a discount on my property's transaction in the form of a referral fee and would be able to garner referral fees from any clients I refer out, something I could not do without a license.


Skyhigh

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Re: Real Estate License?
« Reply #15 on: December 09, 2014, 02:09:09 PM »


In my state RE Brokers have to declare themselves as such in their own RE transactions. Buyers then often shy away because they feel that they are being taken advantage of. In my experience the best real estate deals are not on the MLS anyway. You need to hit the pavement and find your deals before they hit the MLS and buy outside of a RE office. I was told once that more than half of all RE transactions are accomplished without a RE office involved and %80 of all investment properties are bought without RE involvement.

The education is always a benefit but I believe it is unclear if holding the license is.