5 Benefits Of Having Your Real Estate License
By Paul Esajian on January 5, 2017
All real estate investors want to squeeze as much as possible out of every deal. The best investors know that that saving, or generating, a little here and a little there goes a long way. One of the ways you can generate extra money is by obtaining your real estate license. Just because you want your license doesn’t mean it will fall on your lap. Becoming a real estate agent isn’t cheap and isn’t as easy as you may think. However the benefits certainly outweigh the costs if you take advantage of it. A licensed real estate agent is able to generate revenue in a variety of different ways that a regular investor is not. Here are five benefits of having your real estate license.
- Commission. When most people think about becoming a real estate agent they immediately think about the commission. Depending on how you buy and the types of deals you look for a real estate license can save you thousands of dollars annually on commission. Instead of spending anywhere from 1-3% every time you buy this can be a tremendous savings. The tradeoff is that there is plenty of work that goes into every offer. You can also save money every rehab property you sell. You will be in control of all of the advertising, promotion and showings but for this you can pocket the commission you would normally give to your listing broker. There is also the chance that you can make a commission on deals you are not directly involved in. There is nothing saying that you can’t list a friend or family members property and earn a commission. A few of these types of deals a year can equal thousands of extra dollars.
- MLS Access. As a licensed real estate agent you will have access to the multiple listing service (MLS). This is very much like having the keys to the castle. You will get immediate access to every new listing as soon as it hits the market. You can scour through years of listing history, property data and market information. You will have first crack at distressed property listings as soon as they become available. These benefits alone make getting a real estate license worth the cost. Another benefit of having MLS access is the ability to see which real estate agents, and companies are listing or selling the most properties in your market. You may be able to expand your investing business by targeting these agents. There is value in getting this information in real time and not having to wait for a real estate agent to pass this along to you. Most deals time is of the essence and by making an offer even a few hours before your competition may put your offer at the front of the line.
- Education. Just because you want to get licensed doesn’t mean they will just give it to you. There is a process in becoming a licensed real estate. The first step is passing a 20 plus hour statewide course. After completion you will take both a state and federal real estate licensing exam. If you have never been involved in real estate before these tests can be difficult to pass. Even if you are involved in real estate they will take hours of study time. The tradeoff for your efforts is that when you are done you will be a much more educated real estate investor. You will have a firsthand knowledge of what it takes to execute a deal on both sides of the transaction. Once you have your license and start playing around with the MLS and showing properties you will also gain a better perspective of your local market which will greatly impact your business. Education to help get your license is one thing but real world estate for your market is equally as important.
- Referrals. Real estate investing is a contact sport. As a licensed real estate agent the doors are open to meet dozens of people you otherwise may not have. It is not a stretch to say that just one or two more contacts a year can have a tremendous impact on your business. For every deal you are involved in you can reach as many as five important contacts that can help grow your business. Taking on a listing from a friend or family member may not directly lead to a pile of cash but it can help you meet people in your market. These people can help be the building blocks of your business moving forward.
- Instant Access. With your real estate license you never have to wait for a real estate agent to show you a listing ever again. If there is a new property that catches your eye you can make an appointment and view it as soon as you can. Being able to see a new listing allows you to make a decision on it much quicker than you would otherwise. You can also see vacant listings on your own schedule rather than when it works for your real estate agent. Instead of rushing through the property you can take your time and get a good idea of what you are buying.
Even if you only plan on using your license part time it can be another valuable tool in your investing belt.