Becoming a Realtor

i am not going to become a real estate agent.i am sending my wife to real estate school next week & she is going to be a real estate agent.that will give me access to the mls & some good contacts such as mortgage brokers.besides that she can get paid from my deals when i buy or sell & that frees me up to find deals.

I was a real estate agent before I started investing, actually that's why I started investing, well, that and due to the government taking all my money in taxes!!! I jumped from being an agent to an investor because as an agent a lot of your time is wasted sitting in an office or showing houses to clients who cannot decide what they want. As an investor you can maximize your time and if you work well with an agent you both succeed. It's worth that money to let the agent do all the legwork for you while you can concentrate on making more money investing.

I am waiting to get my RE test date. In CA if you have a 4 year degree or more you don't have to acquire the 2 year work experience to become a broker. I didn't know this until a few days ago. My plan is to find an independent broker who will let me work under their license. I will not be an agent for them, but simply pay them a fee for every property I close on. I am then going to take the additional classes to become a broker.

I read an article on here about this very subject, so I just thought I'd share it with you since it seems to be your issue. So yeah here it is, hope it helps.

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Posted by "jjensen"

Posted on: Fri, 10/31/2008 - 16:11

Real Estate License Worth Getting?

"Some question whether or not to get a real estate license.

There are pros and cons to this. I would like to list a few.

Pros:
- You get access to the MLS
- You can do your own comps
- You are able to get contacts with other Realtors and Investor easily.
- You get the commissions.

Cons:
- Some people do not like Realtors
- If you go to a property for yourself you have to note you are a Realtor.
- You are more liable and held to a higher standard"

that's a good list that tells you how it works. My biggest fear is that I may not be able to fully master investing because of being in an office all day as a Realtor. I have all the time in the world right now and I been thinking about this a lot. It kind of depends if you believe you will succeed as an investor, then you probably don't need to become a Realtor.

Another thing we have to look at is the commission an agent gets. I think this is how it works:

A house is sold between 2 agents for $100,000
They split 6% of it so they each get $3,000
How much goes to the broker? I heard as high as 1.5% or $1500

So then I would only make about $1500 and that does not include taxes. That doesn't sound like a lot of money for all the paperwork and time spent in an office. I know that you will fare better with a $200K home but those sell less.

Did I get the commission right?

Different states have different requirements for becoming a licensed real estate sales person, a licensed real estate broker, licensed inspector, appraiser, etc. Check with your state's real estate commission by substituting your state and googling "Texas Real Estate Commission." You should also check to see what junior/community colleges in your area provide the training necessary for licensure.

Then, one becomes a realtor by joining the industry's trade association, the National Association of Realtors (NAR). When you join that, you will likely also become a member of your state and local associations at the same time.

Rick Allison, REALTOR
Keller Williams Realty Associate
Amarillo, Texas
AmarilloHome.net

it depends on what commission split the broker & agent agree upon when he/she decided where to hang (Activate) their license with which RE firm and also if they have any other dues (i.e. Secretary fees, leasing desk space, etc) they have to pay to Brokerage firm they joined. 70/30 split the Broker usually takes the lesser amt to give their agents more incentive to close more deals from them. Remember the Broker owns all the Listings that the RE agents bring to them. They main goal is sales volume per year. It gives them bragging rights, they sold so many listings per year over such and such Brokerage firm.

The more I think about it, the less I want to do it. I think it is more challening and rewarding just being an investor. The main reason I wanted to do this is to be my own boss and being an agent is working for someone and making them money. I think if you find a killer agent then that works out well. I just spoke to a friend today who is thinking about being one. She is fierce as a sales woman so I think she will make a great agent for investors. I will tell her to offer %25 of asking price and she will probably do it ..lol

I have completed my pre licensing course and now waiting for my certificate to take my state licensing exam. I felt like it was a good idea because it will give me an opportunity to make money selling houses and at the same time being able to be an investor.

Just like anything else, commissions are negotiable. Some brokers will give you 100% commission but then you pay a fee to the broker. Depending on the broker who you work for, you can set your own hours. You may have to spend a day in the office taking walk in's and you may be doing open houses, but my plan is to try to be as independent as possible and work my own schedule. Of course, just like anything that you do, you have to spend time doing it to be successful at it.

Being a REALTOR (TM) allows you to represent other investors, real estate investment trusts, etc., though, and that allows you to earn additional profits. One can earn profits on their own flips as well as the other investors' as one shares in the profits.

Rick Allison, REALTOR (TM)
www.AmarilloHome.net

here..

http://www.deangraziosi.com/real-estate-forums/buying-foreclosures-reos-...

Kate

As wrecklesskane said, there are pros and cons to becoming a Realtor. I think it was around 2000 that my partners and I bought our first investment property. I won't go into the details of the transaction here, but it was such a steal that I had to do it again. I tried to look at and place offers on several other properties, but could not find an agent that was as aggressive as I wanted him/her to be. Finally in 2002, after losing a sweetheart of a deal because of another lazy Realtor, I decided to get my license and represent myself. Again, here come the pro's and cons.

On the one hand, you do have the inside track on some great deals (which you could if you had an aggressive Realtor, but why risk that they are not going to bring them to you or not buy them themselves). For example, I was able to buy a house worth over $100,000 for $25,000 because the owner didn't want to deal with the headaches of getting rid of the tenant and cleaning up the place (for the record, I did have him sign a disclosure form that in my professional opinion, the property was worth over $100K…so I didn't take advantage of him). That was a call into the office that I was glad to take. As mentioned, you are able to do your own comps, get first crack at new listings, build rapport with other real estate professionals, etc. If you are selling through a Realtor, you do have to take commissions into consideration. Buy something for $180K, sell it for $200K and you're not making $20K. You pay out generally $12K in commission. Most Brokers will offer higher commission splits to investors who work their own deals just to be able to get more office signs out on listings in the community.

On the flip side, you do have to disclose that you are a Realtor when discussing the sale or purchase of a property. This could put some people off because they may think that you are just fishing for a listing or that you are somehow trying to take advantage of them. Also, be VERY careful when representing yourself. I found that in the past, I wasn’t as thorough when reading contracts for myself because “I know this stuff.” There have been things that have cost me lot of money that I would have caught in a contract if I were reviewing it for a client, but just breezed over because it was my deal. My advice, if you have a RE license, use it to your advantage. Don't get wrapped up in the career of listing and selling. Keep the focus on investing. If you don't have a license, you really don't need one to be a successful investor. It's all about putting together teams. Find the best in each field and have them go to work for you.

I'm not sure mentioned any cons there, except in your last paragraph, and I happen to agree with you. For instance, I have foreclosures come across my desk weekly that are dirt cheap, and I am the first to hear about them. I can't, "Have any ownership interest in," these government foreclosures, so I have to pass them by. This is just one example of a "con".

However, as "pro," I am percieved as being more professional when I do REOs, because of my profession and the fact that I own an incorporated business.

...more later.

I have a question for anyone who might know some FACTS about Florida Real Estate.
I have been talking to some friends (ones a lawyer) about what we all are doing here getting started in investing. I'm talking about bird dogging in specific. These are people I know and trust have my best interest at heart and are only trying to keep me from getting into trouble. I have been told that I would need a license to do any kind of real estate deals in Florida in which I would get paid a fee. On the other hand, the leaders of the REI club I joined have specifically noted that they are not realtors because the rules of being a realtor would hinder some of their operations. There are also club members that advertise their services for a fee who also are not realtors. So who do I trust???

Does anybody body out there know specifically whether I need a license to conduct bird dogging activities in the state of Florida or where I can find it out on my own?

Thanks for any help,

Andrew Sager
AndyS

Wouldn't you rather trust someone who has to have a license from their state and is overseen by an experienced broker and the national, state and local associations of realtors? You wouldn't trust a lawyer who was not licensed and was not a member of their state board.

I'm not sure what you mean by, "Bird dogging," but there are certain things you need to have a license to do. But, as you and others have said, there are certain things that having a license and being a realtor prevents you from doing.

A lot of whether or not you want to be licensed or not depends on what methods, including some that Dean teaches, you are going to use. Some of his will not work at all for a licensee, but others would work much better.

Rick Allison, REALTOR (TM)

One: You Get More Networking Opportunities

You'll get them with other people in the industry, including other realtors, but you'll also get them with banks (for REOs), investors, inspectors, appraisers, government agencies, other companies, etc. People will come to you, because you are a professional.

Second: Recognition

I kinda' eluded to this in number one, but there is a lot of credibilty that comes with a professional license.

Okay, one more:

You can market your own properties once your ready, like after fixing up a house that needs some repair, so you won't have to pay a realtor to list your resell properties, and you won't have to pay them a commission.

Rick Allison, REALTOR (TM)

I'm a realtor and investor and I love the combo

If I had to do it again, I would get my license again. Not sure about anywhere else, but i'll tell you in NY, the added advantage is such a plus and necessity

OK, one more...can't help myself.

There is a lot of training that goes into becoming and remainig a REALTOR(TM). That may include some training in inspections, which will help you with property inspections.

So far as evaluations are concerned, you may also have to take some real estate math, and that helps when determining costs, profits and the like.

Thats true Rick.

Also being a realtor gets you quicker access to lawyers, accountants and contractors who need work or have clients who need representation.

And any realtor who is at their desk more than they are in the field is generally not a busy, well producing agent; my BB is my office. I might be in my office 1-2 hours a day. The rest of the time is meeting new clients, canvassing properties, talking w contractors, mortgage brokers, lawyers, etc.

Hustle, hustle, and more histle is the way to do it

I might have to reconsider about being an agent. It seems to make things simple and add another tool to the investor. Thanks!

Thanks everyone for your input. You spoke about the pluses about being a realtor but what about the minuses?
I already have lawyers, accountants, investors, appraisers and contractors. I can always list my houses with an agent so that my time could be spent buying more houses and not selling what I already own. Then there's always FSBO if I don't want to pay a commish. (As a last resort.)

Andy Sager
AndyS

You have a great point Andy but why take in less money with another agent if you're already an agent and when you sell your own home you get your commission??? You in essence pay yourself.

I'll never knock someone else's decision, but I prefer the advantages having a license provides me

Hi all:

Since my writing here, I went to my REI club meeting. As it was, our speaker was a Florida Lawyer who is also a Florida Real Estate Investor. I managed to wrangle him aside before the actual meeting and finally got some answers from a legal perspective. To Wit: (sorry, I'm still in judicial mode )

#1)Florida people: Beware! Birdogging FOR A FEE rquires a license in our state. There is no law that states that the recipient of your efforts can't reward you, you just can't demand it if you are not a licensed agent.

#2) (This was where I was getting confused)We do not need a license to Buy and Sell real estate as long as it is our own property we are selling. You may be smart to consult with an attorney about the legality of your "Assignment Of Contract" deals without a license. (unfortunately, I ran out of time before I could get him to answer that one.)

So there you have it. Problem solved and question answered.

So does anybody have a good state to invest in that doesn't have these problems?

Regarding selling a property as an agent, yes it's true about the commission and all but.... at the present time, I am buying houses that I already have a buyer for. If I figure in a commision into my selling price, how much am I really losing? This may not apply in other parts of the country so I am not saying that being an agent is a bad thing. Here in good ol' Florida, (from what I've been told) the minuses outway the pluses. Sorry

Andy Sager (renewed investor)
AndyS

Hey Andy,

Bird-dogging is illegal in NJ too. Even if you disclose that you are a Realtor, you are not allowed to accept ANY compensation for a real estate transaction from anyone from your Broker. Of course, he/she will take out their cut first. Essentially, bird-dogging is what a Realtor does: they match buyers and sellers for a fee or a percentage of the sale price. A real estate license is not needed to buy or sell properties that you own. With respect to assignment of contracts, no license is needed. Although you did not take posession of the property, you own the rights to it and are selling said rights. Some states consider you an equitable owner when you have the contract.

If there are any fellow Realtors reading this blog, please check out mine regarding creative investing with a real estate license. Some of the pitfalls of having a license were addressed here, but I want to know how investors/Realtors are avoiding them. I truly would like your opinions on the topic.

I thought about getting a real estate license, so thanks for your perspective. I wanted some of the benefit, but not the wasted time.
Marti

I have been licensed since 1984. In 1993 I became a Real Estate Broker and opened my own company. As an agent you will pay fees to belong to the national and local association along to your local MLS. In Maryland you must disclose you are a licensed real estate agent on all contracts. If you are talking directly with a seller and it is your listing, they may feel that you are not looking out for their best interest, but yours. There is no question, that you will have access to more information than most people, including homes for sale, public records, the best contract, contuining education, etc., but the responsibility for your actions is much greater. As for hours worked. Most companies use agents as independent contractors, so you can work in an office as much or little as you desire or work out with your broker.

Rob
Maryland

rick in reference to post 15. just because someone has a license from there state board doesn't make them honest OR completely knowledgeable. plenty of realtors have tried to tell some of deans students you can't do this and that.

This is a great discussion. I am thinking about teaming up with a RE Agent who is also a very savvy investor. I am wondering if this will be beneficial or detrimental. Could he steal deals from me? Is that common practice? This is pretty new for me so that's why I'm asking. I could be way off. Thanks

Deshone - Mr Real Estate

Elixbrown it was good to see that you don't have to be strapped to a desk because that definitely would have turned me off. I'm want freedom. I have a few questions.

1. If I become a realtor, can I still run my "We Buy Houses" ads and when owners call me, go in and buy the property for myself to assign.

2. How would you do Assignment of Contract being a realtor? I am very interested in this, as I do see it as having another BIG tool in your belt.

3. Would you still do Assignments or what?
4
. Do you cut your profit margins as a realtor compared to what you could make charging the assignment fee?

Thanks

I thought about getting my license. I still am thinking about it.