Posted by Brandon on January 01, 2003 at 11:54:55:
Many states want you to have at least one year of sales experience before they will let you sit for the broker’s exam. This means that you have to work for someone else to meet the requirement. Split commissions aren’t usually a problem because if you didn’t have a license, you wouldn’t have commissions. Your broker will want you to attend sales meetings, answer phone calls, and do assigned floor-time. He will also want you to get listings and generate sales commissions for the agency.
There are costs to join the MLS. Sometimes more than one board. There are local, state, and national dues if your broker is affiliated. E & O insurance also.
Posted by Jeff Hall on December 31, 2002 at 13:22:10:
Hello everybody, and Happy New Years Eve! I’ve already taken all of the required classes necessary for the local RE licensing exam. However, since I listened to the conference call about 3 weeks ago with Joe Kaiser and Peter Finkle I’m having second thoughts about it. They both said they didn’t have a license and were not inclined to get one. I’ve heard both pro and con. Are there any RE agents out there with thoughts about this? Has having a RE license been a help or a hindrence when it comes to your RE investing? Does the fact that you are supposed to disclose that you are a RE agent to the parties involved in a deal make any difference in your business? Thanks for your thoughts about this topic.
I run a home based real estate business. I have no license, although I have taken every real estate class offered at my local junior college. I have no plans to ever take the state real estate exam and get the license. I can wheel and deal without regard to disclosures or the rest of the concerns detailed below.
My spouse is a Realtor. She gets listings from my marketing efforts which do not produce suitable deals for my business, but which do provide good listing prospects. I get fast comps and other MLS research in return. We keep it all in the family this way. It works out well.
You may find it beneficial to get another family member to get their license if they are so inclined. Both of you can benefit from this.
If you get sued by a seller, the Courts will treat you as an Individual against another Individual. But if you’re an agent, the Court will hold you to an extremely high standard of responsibility and a much superior position to that of the seller.
In other words, if you try anything creative that makes you a lot of money, you could be ruined. You’ll only be able to do very straight forward deals and feel safe.
I am a licensed agent in Georgia and I have found that being licensed has helped me tremendously. I have access to MLS, I get money back at closing from the comission, I can sell anything that I can’t buy myself and make a commission(much easier than flipping), I have motivated sellers call me, & I have built a large network of investors that I never would have met if I didn’t have a license. The only negative factor I can see is the extra liablilty you have from the real estate commission and the board of Realtors(if you are a member), however as long as you act ethically in your deals, then the extra liability should not be an issue.
This is not to say that you will definitely make more money with a real estate license. I know plenty of investors out there who make alot more money than me and have never had nor do the plan to obtain a real estate license. But it works well for me.
You say, that you have heard both the pros and the cons. I would like to know what the cons are? I hear from alot of investors that they do not want a license and would never consider getting one. I don’t understand this as I only see one con, which can be avoided very easily and as far as I see it should not even be an issue.
Hello: Thanks for responding to my question. The contra side to getting a RE license that I’ve heard is that you must disclose to the potential seller/buyer that you are a licensee. This might scare away some people who may think, because you are a “professional”, that you can take advantage of them due to your superior knowledge and experience. Also, if you call on a FSBO they may think you are just trying to obtain a listing from them. Anyone else with reasons not to obtain a RE sales license in regards to investing?