Become A Realtor While Staying An Investor
When real estate investors hear someone pitching for them to get their real estate sales license, their immediate response might be “but I don’t want to work as a real estate agent, what’s the use in getting that?” This common response is within good reason. It’s not easy to get your license and often takes long hours of studying to pass the exam. There are also fees or dues that you must pay to become a realtor. These reasons alone can make investors shy away from attempting to get their sales license.
Now, full time investors and full time real estate agents don’t focus on the same work and have different skill sets. Real estate agents represent buyers to find and show them homes to purchase (whether investment or personal residence) as well as represent sellers to find them a buyer for their properties. They accomplish both of these tasks by utilizing the MLS (more on the MLS later). Investors on the other hand, are involved in either fixing and flipping homes for profit, wholesaling deals/assigning contracts, or buying and holding properties for cashflow. Most investors have no interest in working as an agent because this is not their niche or expertise. However, getting a real estate license does not in any means obligate you to work as a full or part time agent. What it DOES do, is allow you to have more tools as an investor and save money when you sell your homes on market.
First off, becoming a realtor allows you access to your local MLS. MLS stands for the Multiple Listing Service. This platform gives you a wealth of property information and data. It lets you pull comparable properties to see what similar homes are selling for as well as pull cash transactions to find buyers for specific zip codes in your area, just to name a few features
Next, having a realtor’s license gives you the privilege to represent both the seller and buyer as a transaction facilitator. As an investor, you will run across many sellers who would like to sell their homes, yet they can’t or aren’t willing to sell for the price you have to offer. When this dilemma occurs, having your license can be a great asset. Now you can pitch the seller on agreeing to let you list and market their property and in turn, get them the price they are asking (and hopefully more). Agents usually charge a standard fee of 6% as compensation when bringing a buyer that results in a sale. So for a $100,000 property, you have the potential to make $6,000 off of that one listing. On the other side of the coin, you can solely represent buyers who want to purchase investments or a place to live and make 3% when they close on a property. Having your real estate license gives you another way to make money and provide value when your cash offer isn’t accepted. Now, not all investors may want to take on listing agreements, but you can use this info to your advantage by letting another agent take the listing and work on some sort of compensation for the referral.
Lastly, having your real estate license allows you to list your OWN properties on the MLS. As an investor, when I fix up my properties, I’m looking to sell them on the market for full retail value when finished. Being licensed allows you to avoid having to pay an agent 6% to represent you as the seller, as well as find you a buyer. Since I’m licensed, I have the power to save this money and simply list it myself. Now I only have to pay 3% for an agent to find me a buyer, and sometimes nothing when the buyer happens to be unrepresented. This can be a great savings over time.
Having a real estate license can be a huge advantage in the long run for an investor. Just because you’re now classified as a realtor, doesn’t mean you have to switch your hustle and focus on another business or learn new skills. It’s simply an achievement that gives you more options to help buyers and sellers, allows you to pull better data and info on properties, and saves you money by giving you the ability to showcase and market your own homes on the MLS. Now go out and get your license!