As a real estate investor, it is important to arm yourself with every possible tool available. One of the tools you have at your disposal is the ability to obtain your real estate license. Throughout the investing community, there are opposing views as to whether or not it is worth the time and financial commitment to pursue your license. What cannot be argued is that once you are licensed, it will help your business in ways both big and small. Getting a real estate license may not be for every investor, but if you are in the right area with the right skill set, it could be just the thing that helps take your business to the next level.
Even if you have a desire to obtain your license, it doesn’t necessarily mean that you can do it. Getting licensed requires a pretty good amount of effort on your part. First, you need to take a 20 hour pre-licensing class and pass any tests and work associated with the class. Assuming you pass the class and the final exam, you need to prepare for a state and national test. Both the class and the exam will come at a cost – in addition to any application and reoccurring fees to a broker to hold your license. If you have been in the real estate business, the test will not be nearly as difficult, but it is far from a slam dunk either. You will need to commit hours to studying. If you don’t pass the first time, you need to wait at least thirty days to take it again. The bottom line is that a real estate license is not handed out to anybody that wants it.
In order to take the test, you need a broker to hold your license. Anyone that works under a brokerage is the responsibility of the broker. This means that they will not just put anyone under their name. There are some brokers that do not fully understand how investors who are also realtors work and do not feel comfortable holding a license. Ideally, you will have some established broker contacts who will hold your license. If not, you will have to pitch yourself to some area companies. After you find a broker, pay any fees and pass your class, you will have your real estate salesperson license. What you do with it will determine if it is worth it for you or not.
The main advantages of having a real estate license are the MLS access and the ability to see any properties without having to make an appointment with a realtor. For a small fee, you can be part of the local multiple listing service in your area. Most new properties that come on the market are placed on the MLS. This gives you, the realtor, real time alerts before the rest of the public. As an investor, if you are first to make an offer it will give you a leg up on your competition. Instead of getting the information even a few hours later, you can get an alert on your phone and be at the house in twenty minutes. It is not unrealistic to say that you can have an offer up with the lender a few hours after the house was new to the market. Even if you get one or two deals a year, any fees would seem well worth it.
Within the MLS, there is also information on each property. The description section can often give you a much better indication of the condition or anything else that can affect the value. Knowing this information will give you a better idea of why a certain property may have been on the market longer than expected or why a property sold for less than the comparables would bear. The more information you know about your market and the values associated, the better chance you have at getting the best deals possible. Taking advantage of the MLS just for the information alone could make getting your license worthwhile.
Another benefit of having your real estate license is the ability to submit your own offers. Instead of waiting for a realtor to collect any documents you can submit an offer on any property whenever you want. You can include any pictures, estimates or language on contracts that you see fit for a particular property. You will also know what is going on with the deal at all times and can have direct contact with the seller. If you are dealing with a lender on a short sale or foreclosure you may be able to expedite the process by having direct communication with the negotiator. By knowing exactly what they are asking for and being able to provide it quickly it will help you get more deals, close them faster and get them for the best price possible.
A real estate license can give you the ability to see the business from a different perspective and close more deals while doing it. This only works if you utilize the MLS and all of the other benefits that a license provides. If not, the fees, continuing education and class time will not give you the return you are looking for. A real estate license may not work for every investor, but for the right ones it can really change their business.