Some beginner investors may look at licensed real estate agent and feel—let’s face it!—a little bit jealous. Easy access to the MLS… not having to wait for someone else to tour properties… the benefits seem obvious. Yes, there are a number of downsides (like having to work under a broker), but the benefits of a real estate license are real.
While a real estate license isn’t a necessity for all investors, some find it an essential part of their investment strategy. But getting your license can be a long process, involving coursework, exams, and background checks—and, of course, you’ll need to find a broker. Learn more about what separates average agents from the great and get all the details on acquiring your license with our in-depth guide: How to Become a Real Estate Agent—An Investor’s Guide.
Our in-depth guide to the downsides of a real estate license walks you through the negatives. Now, we’re here to talk about the benefits of a license. Why should investors go through the coursework, the testing, and the expense of licensure? Here’s why.
1. MLS access
Having a real estate agent’s license allows you to legally and legitimately access the multiple listing service (MLS).
This has two major benefits for creative investors: First, you can closely watch a neighborhood and spot a new property the moment that it comes onto the market. You don’t have to wait for an agent to find the property for you, or for a public website like Zillow to pull the data.
Secondly, you can mine a treasure trove of historical data. The MLS provides detailed information about prices and comps. Yes, some of this is also available through websites such as Trulia, Redfin, Zillow, and LoopNet, but the MLS is—and always will be—the gold standard.
Here are some questions the MLS can answer for you:
How many houses sold in the last year that meet my investing criteria?
Don’t waste time searching for something that doesn’t exist.
What was the asking vs. sales price for similar properties? This will help you save money when putting in an offer.
What are the seasonal trends in prices for a particular area or type of property? Some cities have fluctuations of $30 to $50 per square foot from winter to summer in areas with good school districts. Parents don’t want to move their kids in the middle of the school year.
How much do the owners owe? If you plan on putting in a low offer, you can pull records that will give you a good idea what they owe on the house—and if they can afford to take even less.
How many days can you expect properties to be on the market? Do you need to put in an offer right away or do you have time?
Who owns a specific property, and what is their address if they don’t currently live there? You can send them a letter and see if they want to sell.
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