FUNDAMENTALS
LICENSES
Real Estate Licensing
DO ASPIRING INVESTORS NEED A LICENSE?
by Michael Jordan
R
eal estate stands out from other investment methods
mortgage they took out for it.
it’s always important to consider expense and liability: While it is true that licensed inves - tors are able to have a commission on deals that they close, they also deal with their own fees, which can inevitably eat into their profits. Some of these are broker monthly desk fees, lockbox fees, MLS fees, and realtor designation fees. Sometimes these fees need to be paid annually regard- less if you have made an investment deal or not. Real estate can involve a lot of legalities. Once you are licensed, you are basically open to hold a much higher ethical standard. Simply for - getting something that should have been disclosed in a sales agreement can result in legal penalties if some - one were to sue you. As you can see, having a license as an investor isn’t as necessary as a lot of people might think it to be. There are a lot of investors out there without a license who have earned success in the business, and one of them can be YOU! Which brings us to our next point:
COMMISSION An investor normally does not receive any commission for buying a property, unless they’re licensed of course. You can basically get six to eight percent of the sales price . That’s a lot of money if you think about a million-dollar home. This extra income will add up if you happen to close a lot of deals. NETWORK A license gives an investor power in the real estate industry. This could lead to off-market deals that are brought to you before other parties could get a chance to check them out. Lenders, contractors, and similar licensed agents are some of the few connections that can help you grow in the business. AREYOUREQUIRED TO HAVE ONE BEFOREYOU START INVESTING? NO. Investing in real estate yields many creative ways to net a profit with or without a license . However,
because one can creatively make a profit. The practice of investing in real estate has been competitive over the years, and people have been trying to gain their own edge. That is why a lot of investors think about whether they should get a license or not. As it turns out, this can give you an advantage over others that don’t have it — provided that it’s used wisely.
BENEFITS OFHAVING ALICENSE
MLS ACCESS This is one of the main advantages of having a real estate license. You get to have personal access to the Multiple Listing Service (MLS), a listing of properties mostly for sale which are posted by almost all brokerage firms. Apart from that, the system also gives you access to specific data on owners: who they are, how much they initially paid for the property, and how big of a
30 | think realty magazine :: december 2020
Made with FlippingBook Online newsletter