Should An Investor Be A Licensed Real Estate Agent?
August 25, 2008
Becoming a Realtor: The pros and cons as an investor and what type of broker to consider. I became a licensed agent in 1986. Why? I had started to invest in real estate and realized that I had to rely on a Realtor to get me in to see some of the properties I was interested in purchasing, and then I had to wait for them for the comparables.
Comparables (aka Comps) can best be found on the MLS (Multiple Listing Service). Only Realtors have access to the MLS in most parts of the country. There are other websites and systems that have comparables in some parts of the country, but nothing is like the MLS. That is where the true sales information lies.
After I purchased my first several homes, I decided that I did not want to wait for or rely on a Realtor to buy and sell my own properties.
Becoming a Realtor, as a real estate investor, will give you many advantages. There are no disadvantages that I know of. Investors tend to be adamant one way or the other about being a licensed Realtor. I am definitely on the side of becoming licensed. Being licensed has been one of the best tools that I have as an investor.
Being licensed allows access to your database of ‘comps’ or comparables. This is the data you need to buy and sell real estate - with good information. If you have a great Realtor, or you can get access to the MLS (Multiple Listing Service) without being licensed, great, but I still think it is better to be licensed than not. I personally like to do my own comparables. (maybe that is the controlling part of me J ).
Some investors say it gives them more liability to be licensed. I have two answers to that:
- What are they doing to create liability?
- Don’t they think a judge is going to consider them as an ‘expert’ when they find that you buy and sell real estate for investment purposes?
Some investors say that sellers won’t sell to you if you are licensed. I find the opposite is true. Most sellers are happy that I am licensed and “know what I am doing”. If you are licensed you will also get commission on each deal you buy or sell (if it is listed on the MLS). Every office is different on how they split the commissions received by the office.
My recommendation is to GET LICENSED!!!
When becoming a licensed Realtor you must work directly under a licensed broker. To become a broker, each state has their own requirements. I have been a broker since 1997. When you are a broker you can have other Realtors work underneath you, but becoming a broker should not be the “be all end all”, unless you really choose to own a real estate company. There are many expenses when you own your own office.
As I travel all over the country, I am asked frequently how to locate a good broker. This is always an important part of working as a licensed Realtor. You will want to work in an office environment that encourages creativity, investing and entrepreneurship. You will also want an office that provides exceptional real estate training.
Some of the best advantages to becoming licensed are:
- The training that comes with becoming a Realtor - especially in Keller Williams
- Access to the MLS - to get comps
- Part of the commission on each purchase or sale you make
- A network of Realtors (many opportunities might come to you before anyone else even knows about them)
I recommend you become licensed, I have been licensed over 20 years. I will gladly assist you in working as a Realtor. I can help you get started in the right direction.
About the Author:
Wendy Patton is widely recognized as one of the most inspiring speakers on "Little or No Money Down" real estate investing. Her real estate savvy, great depth of experience and viable knowledge has helped her in orchestrating the most complete and easy to follow Lease Option & Subject To Program in the country.
Wendy has been an educator and speaker on real estate investing since 1995. She is an avid golfer and currently lives in the Detroit suburb of Clarkston, Michigan with her husband, Michael Gott, and their 5 children.
For more information on Wendy Patton, please contact: Beth Slade at Limitless Options at Beth@WendyPatton.com or 248.394.0767.
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