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Is Getting A Real Estate License Worth It?

If you’re reading this, you’re probably already closed your first deal or are making that a priority. One way that some investors give themselves an edge is by obtaining a real estate license. While the requirements vary from state to state, obtaining a real estate license usually requires taking a class and passing an exam. In Arizona, for example, obtaining a real estate license requires taking a 90-hour course then passing a state exam. To use the license for transactions, most agents need to be sponsored by a brokerage. But once you’ve put in that work, here are a few of the advantages of obtaining a real estate license.

  • You get access to deals first

As a licensed real estate agent, you’ll gain access to the Multiple Listing Service, or MLS. The MLS is an excellent resource that will alert you to new properties on the market before they’re on Zillow, Redfin, or any of the other real estate listing websites. The MLS is also useful for offering past and present sale prices, data about the neighborhood, and information about comparable nearby properties, or “comps.”

  • Networking opportunities

Real estate investing is a relationship business, and one of the greatest advantages of having a real estate license is being able to network with other agents. This will help you familiarize yourself more with your market. Another major advantage is that as a real estate investor, you want to have a team of professionals that you can work with – appraisers, inspectors, contractors, property managers, and so on.

  • Save on commissions

If you’re an agent, you’re not required to hire an agent to represent your interests. That means that you’re able to save on the commission you would otherwise pay an agent. The total commission on most real estate transactions is 6 percent of the sale price. This commission is actually split between the seller’s agent and the buyer’s agent. If you’re selling an investment property or buying a new one, when you act as your own real estate agent, you’ll be able to hold on to 3 percent of the property’s value.

  • Minimizing risk

If you’re a real estate agent, you have to be affiliated with a broker. When you’re acting as your own agent, all of your transactions will be overseen by your brokerage to ensure that you don’t violate any laws or regulations. Licensed real estate agents are far less likely to be sued because they are required to have someone oversee their work.

  • Understanding the Industry

In addition to learning how to buy and sell properties, any course you take to obtain a real estate license will also incorporate other useful information, such as marketing, lead generation, how to talk to buyers and sellers, and many other practical skills that investors need to have.

The reality is that there are a lot of investors out there who could use more education. Whether you make the jump to becoming an agent or just use license to develop a stronger understanding of the real estate landscape, getting a real estate license can help set yourself apart from other investors.

One Response

  1. The tax advantage to obtaining a re license is that you become eligible for Professional Real Estate Status which is how you’d offset W2 income if you/spouse earn more than $150k per year. It turns passive income to active.

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