Getting a real estate license to flip houses seems like a good move. Being able to see the houses you want without having to schedule with a real estate agent, sounds nice. Gaining your own private access to MLS to do your own research, seems terrific.
However, along with the advantages of having a real estate license when you’re flipping houses, there are certainly some disadvantages to consider. Let’s discuss.
Advantages to getting your real estate license
There are 3 main advantages to getting your real estate license when you’re flipping houses.
You don’t need to rely on a Realtor
When you have your real estate license you’ll have access to MLS. With MLS access, you’ll be able to do your own property/market research, and tour properties yourself.
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Without the need to rely on a Realtor, you’ll be able to identify deals faster, and move on opportunities before your competition does.
Save money on closing costs
As a buyer, you don’t pay anything for the services you receive from your real estate agent. This is because the seller typically pays all real estate commission once the deal closes.
However, as someone flipping houses, you will be on both sides of the transaction. When the time comes for you to sell, you can expect to pay up to 9% of the sale price in closing costs.
6% of that 9% will go to pay real estate commission. Well, if you’re acting as your own agent, you’ll save on some of that 6%.
Potential for other business
As the listing agent for the property you’re flipping, you’ll get to meet all different kinds of people who show interest in your property.
Some of these people won’t be represented by a Realtor. If they’re not interested in the house you’re flipping for one reason or another, you can take them on as a client and sell them another house and earn a commission.
Disadvantages to getting your real estate license
While there are certainly some real advantages to getting your real estate license when flipping houses, there are some disadvantages that should be considered.
Time & cost to get licensed
The cost of being a Realtor doesn’t end once you get your license. You’ve got association dues, MLS dues, insurance, & possibly fees your broker may charge you to provide you with office space, supplies, etc.
Even if you’re just getting your real estate license for your own house-flipping purposes, you still need to consider the time it takes to do research, submit offers, do open houses, etc.
While getting your real estate license may seem like a good idea when you’re flipping houses, the costs and time commitment may not be worth it.
If you’re just going to flip a house every now and then, you’re probably better off working with a Realtor. However, if you’re going to be flipping many houses, getting your license may be a good idea.