There’s no ‘Yes, you should,’ or ‘No, there’s no need,’ answer to the question of whether you, as a flipper, should get your real estate license. It depends on your personal situation and your personal view. Let’s look at some of the factors that can influence your decision.
PROS
You have unhindered MLS access
The most obvious benefit of having a real estate license is that you will gain access to local MLS. You won’t need to “borrow” someone else’s MLS account and you can access the listings any time you want. Not only will you be able to find active listings but have access to all of the historical data in the listings service.
Save on commissions.
Agency commissions are about 6% or more of the sale price of a home. Agents also take additional fees to facilitate the transaction. If you’re not paying an agent when you sell, you can keep that 9% or so additional money as your own profit. Acting as your own agent on the purchase and sale is an added layer of responsibility, but you also reap the benefits.
You have control on all aspects of the deal.
If you have your license or one member of your team has their license, then you can negotiate directly with listing agents. You can deal directly with the lenders, appraisers, inspectors, closing attorneys and other involved groups with no intermediaries. It gives you a more hands-on involvement in the entire process.
CONS
There’s no one else to lean on.
Each time you plan to show your house, you will be the one responsible for preparing the house….turning on lights, turning on the heat, putting out cold water bottles, leaving out a plate of snacks. The fees that agents receive cover their time to follow up with the viewers of all properties and help you market the home. With you or your team acting as your agent, you are responsible for all of those details.
The license costs money and time.
A license requires a few hundred dollars, which is manageable, but it is also about 100 hours of study time. Also keep in mind, retaining your license requires some ongoing study. You’ll have to pay fees to a broker.
Paperwork
As an agent you’re responsible for writing your own offers and ensuring that all documentation is handled correctly. The paperwork mountains grow with each deal you process.
As you can see, there are pros and cons in equal measure to think about. If you’re a part-time investor, the time commitments and expense of getting your real estate license may not be worth it. If you’ve taken your flipping full time and you expect to continue with it, it could well be worth having yourself or someone on your team able to act as an agent.
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