Is It Time Every Investor Considered Becoming A Real Estate Agent?


Have you ever wondered if becoming a real estate agent is worth your time and money? Don’t worry, you aren’t alone. Not only has just about every investor that has come before you played around with the idea of becoming a licensed agent, but those that come after you will do the same thing. At the very least, it’s a legitimate question to ask.

I wholeheartedly support any real estate investor intent on acquiring their real estate license. In my professional opinion, it can only help facilitate your growth as a real estate professional, but I digress. Becoming a real estate agent is by no means a necessity, nor is it required to realize success on a higher level. If for nothing else, some have found more value in working with experienced real estate agents than actually becoming one themselves. And therein lies the real dilemma: Will you be better off working with a licensed agent or becoming one yourself? Both routes come complete with inherent advantages and disadvantages. Which path you choose, however, should depend entirely on the direction you want to take your company.

In order to truly understand whether or not becoming a real estate agent is the best decision for your investing business, you must first weigh the pros and cons that have become synonymous with whichever path you choose. What do you stand to gain from maintaining the status of an actively licensed agent? What sort of investment (both time and money) can you expect on your behalf? Perhaps even more importantly, is the role of a real estate agent within your rank and file better left to someone else; someone who can make it their sole priority?

Either way, someone on your team should be an actively licensed agent or broker. Whether or not that person is you, however, will depend on where you decide your time is best spent.

The Pros & Cons Of Becoming A Real Estate Agent

Investor real estate license

The Good

Alternative Source Of Income: You could very easily argue that the most popular reason investors consider becoming a real estate agent is also the most obvious: the money. Not surprisingly, acquiring your real estate license entitles you to collect commissions and fees on successfully completed transactions. And, as it turns out, you can act as the agent on your on investments. So, in addition to flipping a property and generating profits from the investment itself, it’s entirely possible to act as an agent on the same deal and collect a commission — sometimes as high as seven or eight percent. That’s somewhere in the neighborhood of $7,000 on a $100,000 deal, or even $28,000 on a $400,000 deal.

Access To The MLS: The Multiple Listing Service (MLS), as its name suggests, is essentially an amalgamation of approximately 700 different regional databases spanning the whole of the United States. Quite simply, it’s the most exhaustive collection of housing databases sanctioned by those with boots on the ground: the National Association of Realtors (NAR). Homes are, therefore, reported on accurately and — more importantly — easily searchable. And, as it turns out, the only ones able to utilize this invaluable tool are those that are actively licensed brokers or agents. So if you intend to use the MLS to your advantage, you had better get your own license.

Builds Credibility: Due, in large part, to the criteria one must meet in order to first obtain their real estate license, an inherent level of credibility is bestowed upon those who have already lived up to expectations. If for nothing else, it’s the act of proving that you are already capable of doing something that will permit others to place their trust in you. And what is credibility if not for a label granted by trust? All things considered, it’s going to be a lot easier for people to place their trust in you if they know you are an actively licensed agent. Consider the alternative.

Strengthens Your Network: In addition to the credibility one will ultimately gain by receiving their real estate license, it’s safe to assume the acquisition of a real estate license will go a long way in strengthening your network. If for nothing else, becoming a licensed real estate agent will automatically induct you into an unofficial group of your peers. As an agent, it’s inevitable that you will find yourself working with and talking to more agents. Take advantage of your status and see to it no contact goes to waste.

The Bad

Additional Costs: It shouldn’t surprise anyone to learn that there are costs associated with becoming a licensed real estate agent. It is worth noting, however, that the only person responsible for those costs is the individual trying to become actively licensed. That’s right, if you are going to become a licensed real estate agent or broker, you have to pay to play. Individuals are personally responsible for covering the following costs: Coursework, memberships to Realtor boards, ongoing education, Errors and Omissions insurance and license renewal fees down the road. And while none of these costs will sink your business, it’s important that they are accounted for, nonetheless.

Disclosure Standards: Acting as a licensed real estate agent over the course of a deal comes with an inherent responsibility: you must disclose that you are, in fact, a licensed agent. If for nothing else, you are fully expected to play the role of facilitator. And in doing so, you must disclose certain information that may — or may not — include things such as: Natural hazards, market conditions, previous renovations, pest problems, neighborhood disturbances, property value estimations and plenty more. Quite simply, your position as the most experienced person in a deal places some additional responsibilities on your shoulders that wouldn’t be there if you weren’t licensed. As I am sure you have already heard, with increased responsibility comes increased liability. This means that if the transaction goes wrong, agents may be held responsible, receive complaints, and potentially be subject to lawsuits.

Time Consuming: It’s not like someone is simply going to give you a real estate license without putting in a little legwork. As an investor looking to acquire a real estate license, you have to expect to spend some time; it is, after all, a marathon, not a sprint. Those looking to become a licensed agent should expect to invest a good amount of time in both the beginning, and through continued educational efforts. To begin, some states require as much as 100 hours of coursework to prepare for the licensing exam. And that doesn’t even include studying for the exam itself. On top of that, you may be required to take on more coursework by the brokerage you are eventually required to work with — and even then you aren’t done. To maintain your license, you must continue your education and prove you are worthy of the license over the duration of your career as an agent.

The Final Decision

Becoming a real estate agent certainly has its advantages. Namely, access to the MLS and additional profits are more than enough to get people excited about the prospects of receiving their license. However, those benefits are not without their own caveats. In order to reap the rewards that have become synonymous with today’s real estate licenses, you must pay the price. That means you will be expect to continue your education on a regular basis, pay fees, assume more responsibility and a number of other things.

If you are confident that you can take the bad with the good, there is no reason you shouldn’t consider becoming a real estate agent. However, if you are less confident in your ability to meet the ongoing criteria, perhaps becoming a real estate agent isn’t for you. And if that’s the case, all is not lost. For it’s entirely possible to work with real estate agents and piggyback off of the benefits I outlined above. What’s more, you will be free to address other matters in your business.

With an agent on your team, there is no reason you can’t have the best of both worlds. While it may cost you to enlist their services, I can assure you it’s well worth it. An experienced real estate agent is worth their weight in gold. Provided you find the right fit for your real estate team, you can simultaneously gain the benefits of an agent without taking away a huge portion of your time.

So if you have ever found yourself asking “should I get my real estate license,” understand that’s it’s only a natural inquiry. If for nothing else, the advantages of a real estate license are unquestionable. The real question you need to be asking yourself is whether you should get licensed or work with someone that already has one.

Key Takeaways

  • I wholeheartedly believe becoming a real estate agent can further your development as an investor.
  • It’s not a question of whether or not a real estate license would help your business, but rather who is better off getting the credentials.
  • The benefits of a real estate license are unquestionable, and — in my opinion — greatly outweigh the negatives.
  • With access to a real estate license, either through your own or a partner’s, you are awarded invaluable tools to improve your business.