Do you need to have a real estate license to become a real estate agent? Nope. I’ll go a little deeper because maybe you should get your license or not. A real estate license is not necessary for investing in real estate, What a license does, it gives you the ability to help other people or yourself buy and sell real estate, but anyone can buy and sell real estate on their own without being an agent.
There’s no law that says you have to be an agent to go buy a property for yourself. Just because you don’t have to have a license, does that mean you shouldn’t have a license? Not necessarily, having a real estate license can come in handy for an investor for a couple of reasons.
Firstly, speed; in a competitive real estate market, the early bird often gets the worm as a real estate agent, you can get first-hand knowledge of real estate deals that are listed.
Secondly, access that agent can get into almost any property that is listed for sale with a special key and a lockbox. In other words, you don’t have to wait for someone else to go see the property, if the home is vacant you can head over anytime assuming the home has that special lockbox present. If the home is not vacant well, you can set up a time to view it without having to fit into another agents schedule.
Third commissions; When a home is sold, the seller typically pays around 6% to the agents who made it all happen. This fee is typically split 50/50 between the agents who listed the home and the agents who brought the buyer agent. Therefore, as a real estate agent when you buy a property you can represent yourself and you can use that commission which is 3% you’d get towards your down payment or towards repairs or take that trip to Jamaica or whichever country for vacation.
All right, so that sounds pretty awesome doesn’t it? But before you run out and get your real estate license, let me explain just a few of the downsides.
Downside of Becoming a Real Estate Agent
Well for starters becoming a real estate agent is not as easy as like signing a document, you have to take an extensive class depending on the state, where you live in. It could be up to a hundred and twenty hours in length, and you must pass a difficult test, which may require long hours of studying. This takes away time from actually investing in real estate.
What is Take to Become a Real Estate Agent
Then there’s the cost because once you become an agent, you’ll find yourself paying several thousand dollars in fees every year, just to hold on to your license. Of course, if you’re making money as an agent, maybe this isn’t such a big deal.
But the more annoying thing to me is the increase in paperwork as an agent, you’ll find yourself responsible for all that additional paperwork and disclosures and every deal. So if you’re representing yourself, you can’t simply let your agent do all the heavy lifting which is what I do when I buy a deal because you are the agent.
The reason I’m not an agent because I want to focus on my investing. Look, I’m already busy enough between investing in real estate, trying to pretend I’m a surfer and hosting the top real estate podcast on Earth with over 60 million downloads. So I don’t want to add one more thing possible distraction to my life, when it comes to real estate I’m going to let my agent do it, they’re really good at doing and I’m going to focus on what I’m really good at doing and surfing.
Plus, I don’t need the extra income, if I had a job that I hated and I really wanted to replace that income quick, you know what? Yeah, I’d probably become an agent and I would learn how to become a successful one. Maybe that’s you or maybe not.
Okay. Should you get your real estate license? Really? It’s up to you right? I know that’s a lame answer but the truth is there are plenty of examples of individuals who have had a license and found success in the real estate investment, because of it and others who achieved greatness without it.