“Should I get my real estate license?” is one of the most frequent questions asked by new real estate investors. The answer, as most things in real estate, is not necessarily straight forward. The answer actually depends on several factors, including the costs of getting and maintaining your real estate license in your area (yes, cost vary greatly from state to state and area to area) and whether you can find an investor-minded broker under whom you can keep your license.
I recently sat down with Charlie Brickley, a real estate investor and agent associated with our brokerage — Serenity Real Estate Team. Check out the video to see what he had to say on the subject of whether it makes sense to get your real estate license as an investor.
Major Takeaways from the Interview with Charlie:
If you are in New York, California, Michigan, Pennsylvania, or Texas, you can fulfill your course requirements online for under $100 through this company: https://www.realestateu.tv/
Advantages of getting your license:
1. Save money/make commissions on your own deals.
2. Add a new income stream by representing other buyers and sellers.
3. Get access to the MLS and up-to-date listings.
4. Eliminate the agent middle man and control your own schedule for showings.
5. Access off-market deals.
6. Learn and improve your selling and marketing skills, as well as interpersonal skills.
Disadvantages of getting your license:
1. Cost – you have to pay for a course, state exam, license fee, continuing education fees, MLS and realtor association dues, etc. Different states and local areas may have different costs. It may be cost effective in some areas like New York to get your license and only do a deal or two per year, but it may not be in others where you have to pay a lot more.
2. Time Commitment – there is an up-front time commitment to take the required course and the state mandated test and obtain the knowledge necessary to be a licensed agent. There is also an additional time commitment to stay up on continuing education that is required in most states.
3. Government oversight – you will be required to abide by certain ethical rules and practices. This should not be a big deal because you should be conducting your real estate investing business in an ethical and legal manner anyway. But, there may be certain rules that may not appear to be obviously unethical to an untrained person, but would still be required for a licensed agent. So, it is important to know the rules well.
4. Brokers Who Do Not Understand the Investor Mindset – if you are not going to work as an agent full-time and if you are just looking for a side income as an investor, you will want to work with a broker who understands that. Not all brokers are created equal in this regard and many will not be a good fit.
Here is a little bit of information about our brokerage — Serenity Real Estate Team — and what it offers to its agents:
– signs, lock boxes, business cards, real estate photography, errors and omissions insurance paid for by the broker
– no quotas, fees of any kind or pressure to sell
– opportunity to learn from other more experienced real estate investors with over 200 rental units combined
– opportunity to get off-market deals and client leads to represent for side income
Here is the process for obtaining your license in New York:
1. Take the 75-hour mandated course. This can be done online or in-person. Here is the link for the online provider, which charges less than $100 for the entire course: https://www.realestateu.tv/
2. Take and pass the course exam.
3. Register, take, and pass the state exam with the New York State Department of State. This costs just $15.
4. Find a broker who will sponsor your application.
5. Submit your real estate salesperson application to the New York State Department of State. This costs just $55.
6. Once you receive a confirmation that your application has been approved, let your broker know and they will “pick up” your license and you will officially join their brokerage.
7. Sign an independent contractor agreement with your broker.
8. Contact your local realtor’s association (you can ask your broker who to contact) and submit an application and pay a fee to join to obtain MLS access. In Capital Region of New York, the realtor association is called the Greater Capital Association of Realtors (GCAR). The total annual dues are currently around $1,200.