Real Estate Marketing & Beyond
Whether an investor should get a real estate agent's license is ultimately a personal decision. Some investors believe it's critical to the long term success of their investment business and others think it's a waste of time and money. If you're an investor, I don't recommend that you get your license to help the public buy and sell homes. That will take too much time away from your investment business and can create a conflict of interest. The conflict of interest arises when you come upon a house that meets your own investing criteria but also meets the criteria of a buyer you are working with. You have an ethical responsibility to present the buy option to your client before making an offer yourself.
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Direct access to the full MLS is the single biggest benefit to obtaining an agent's license. Without direct access, investors rely on sites like Trulia, Redfin, Zillow, and LoopNet. While these are valuable sites for gathering information, the gold standard for finding accurate and up to date information remains the MLS.
The MLS is where the properties are first listed. It can take days and even a week before the secondary sites pull the data onto their websites. When you're in a competitive market, you want to see new listings the instant they come on the market. With direct access to the MLS, you can set alters that match your investing criteria to you notify you the instant a new property comes on the market.
With a realtor's license you have full control of your purchase offers. You can directly negotiate with the listing agent without having a buyer's agent filtering the information that you receive. You can also speed up the entire purchase process by working directly with lenders, appraisers, inspectors, closing attorneys, and anyone else involved in the closing of your transactions. If you're flipping properties, you can do the same thing as the selling agent and fully control your marketing.
Being your own agent encourages building relationships with selling agents. By making their job as easy as possible during each transaction, you build a reputation as someone they want to work with. There is a high probability you'll start being told about attractive listings before they are even entered into the MLS. Also, if your investing criteria only covers certain neighborhoods, other agents can bring your attention to attractive investment opportunities in neighborhoods you might have otherwise over looked.
This is more of a fringe benefit than a main benefit. Typically, you'll earn a 3% commission on each property that you buy or sell and then split that with your broker unless you become your own broker. As an investor, your serious money is earned either as a landlord or on the flip. I wouldn't make the commission a major reason to get an agent's license but a little extra money never hurts.
There are certainly reasons for not getting your license. Depending on your state, it will cost you several hundred dollars in fees and probably a hundred hours taking required courses and exams. There are also ongoing costs like the fee for MLS access and requirements for continuing education. Finally, you'll be doing more paperwork. You'll be doing the paperwork that your agent currently does on your behalf. It is a personal decision with pros and cons.
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Author bio: Brian Kline has been investing in real estate for more than 30 years and writing about real estate investing for seven years. He also draws upon 25 plus years of business experience including 12 years as a manager at Boeing Aircraft Company. Brian currently lives at Lake Cushman, Washington. A vacation destination, a few short miles from a national forest in the Olympic Mountains with the Pacific Ocean a couple of miles in the opposite direction.
