Why Investors Get a Real Estate Agent License
A real estate agent license is a person's key to a lucrative career as a salesperson.
But, some careers don’t require a license, like real estate investing. So, why do investors get a real estate license, if they don't need it?
Owning a real estate agent license comes with advantages—especially for investors. A license helps investors access resources that provide convenience and investing information.
You can maximize your returns and shrink your expenses with a license in a few ways. One way is by representing yourself in property transactions.
Representing Yourself in the Property Transaction
When you buy or sell a property, a real estate agent guides you through the transaction.
They handle the heavy lifting—paperwork, property marketing, and coordinating with services. Working with real estate agents is convenient. Investors can buy and sell a property and let a trained professional handle the heavy lifting.
Real estate agents get paid with a commission after the escrow ends, which is typically 6% of the selling price.
But, the agent doesn’t take the full 6%. They have to split it with the other agent and their respective brokerage. So, this 6% commission gets split four ways.
If you’re familiar with the transaction process, you can remove the costly middleman by doing the heavy lifting yourself. This is one reason why investors get their real estate agent license.
As salespeople, they can represent themselves during the property transaction. Doing so forgoes the help of an agent and lets the investor earn a sales commission.
The money you earn in commission helps reduce any transaction fees, despite splitting it with your brokerage. It can reduce your purchase costs or boosts your sales profits.
Investors buy and sell properties more often than the average homeowner. This causes extra fees. Instead of spending, investors can be earning if they represent themselves.
The money won’t go into another real estate agent’s pocket as a commission, because the investor is the acting agent. So, when they buy or sell a new property, they can put their commission towards their next big investment.
Direct Access to MLS Listings
The big lure for investors is access to the MLS. The MLS is an acronym for Multiple Listing Service, and it’s the largest property listing database in the country.
Every real estate agent uses this service to discover properties for sale in their area. This helps them collaborate with other brokers and agents to start the transaction. Real estate investors use this tool to feel the property listing’s pulse in a neighborhood. They can find the listing price, square footage, and address through their portal because the database is continually updated.Investors can write purchase offers for the property they think is a good investment. If the purchase offer is accepted, they can use their license to represent themselves.
The MLS is an irreplaceable tool for investors.
It helps find properties and provides valuable data to whittle down the best investment.
A Real Estate Agent License is a Lifestyle Change
Earning your real estate agent license is a lifestyle change. You need to keep your license status active to have access to its perks. So, you must commit to selling and listing the property with the brokerage you’re signed with.
Don’t underestimate the time commitment, because you will be taking on—at least—a part-time job.
Your career changes when you use a real estate license to fuel your investor lifestyle. You need to keep up with the fees and work to keep your license active. Becoming a licensed real estate agent doesn’t do squat if you’re an inactive agent, because you can’t represent yourself or access the MLS database.
To keep your status as a real estate agent, you need to work full-time or part-time with a brokerage.
This requires continual upkeep with brokerage connections and commission earnings. Those who discredit the work involved to keep a real estate agent license will get the boot.
Investors should earn a license if they enjoy selling and listing homes with a brokerage. If this sounds like unnecessary work that will stiffen your career, then you shouldn’t pursue it.
Don’t let that discourage you from earning your real estate agent license. There are plenty of perks in a salesperson agent career—including financial gain.
A real estate agent license could be the next best step because it could lead to an extra revenue source that compliments your portfolio. If you aren’t investing, but plan to in the future, becoming a real estate agent first is a smart step into the investment world.
Some prospective investors choose to earn a real estate agent license before they start investing.
Earning a Real Estate Agent License Before You Become an Investor
If you want to start a career in real estate investing, a career as a salesperson can help you in your career. Real estate agents familiarize themselves with the industry, home buying process, and they network with people who can influence their careers.
Learning on the job is part of becoming a real estate agent. Agents learn from brokers and professionals with years of industry experience. So, they inherit knowledge that serves as the basis of their investment success.
As an agent, you can tuck away part of your commission per sale as investment money. This becomes a comfy cushion needed for when you’re ready to jump into an investment career.
A real estate agent career is a worthwhile stepping stone to becoming an investor. You can secure funds from your commission and learn while doing it. Then, when you’re ready, you can walk into an investment opportunity with the funds and knowledge to make it profitable.
A real estate agent license can only help an investor in their career. But, the amount of work to maintain an active license could be a deal breaker for most people. Weigh the perks of becoming a real estate agent and become familiar with what you want in your career. If selling and buying property excites you, then earn your real estate license.
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