Should Real Estate Investors Get A Real Estate License – Part II
Yesterday, we published reasons why Real Estate Investors might want to get licensed by the State of Florida. Today, we are giving you the reasons you might not want to do this. Either way, please do your due diligence and make your own decisions.
#1 – The educational requirements which include pre-licensing, post-licensing, continuing education, and several tests are mandatory.
#2 – The costs in both time and money for the license, the application, and annual dues with the state licensing board, the board of Realtors®, and the MLS. You only need to join the board of Realtors® if you want access to the MLS though; you can still legally get paid a commission without joining the board of Realtors®.
#3 – Having to abide by the state real estate laws and the board of Realtors® Code of Ethics. Just because you are unlicensed does not mean that you do not have to abide by the state laws. Plenty of investors have gotten cease and desist orders from their state licensing board because of their “creative investment techniques” , “property management” , or “consulting fees” that were truly just unlicensed brokerage activities. The statutes will have a definition of what constitutes acting as a real estate broker. Usually the definition is long and intentionally broad so as to cover a multitude of things.
#4 – Disclosure of your real estate license to potential buyers and sellers. Some people say this is a negative. To me it is actually a positive. Why would a seller or buyer want to deal with some unlicensed investor (who might be a scam artist or time waster) when they can deal with someone that is regulated by the state? I use this for credibility all the time when buying property and it often helps me clinch the deal.
#5 – Courts may hold a licensed person to a “higher standard” then they would an unlicensed person. However if you are doing lots of deals and are advertising yourself as a professional investor, you are going to be held to a higher standard than a layperson anyway. If you go to court, you still lose time and money even if you prevail. Most of the people that I know who have been sued by a seller, buyer, or partner in a bad real estate investment deal did not have a license. Often they got sued because they were ignorant of the various laws regarding real estate – laws that get taught in the pre-licensing real estate 101 class.
Robert Arnold is the investor-friendly real estate broker/owner of Sand Dollar Realty Group Inc., Sand Dollar Referrals LLC, and Sand Dollar Property Management all headquartered in Altamonte Springs, Florida. A broker since 1996, his business caters to the needs of investors and investor-minded Realtors®. His firm is a member of the Orlando, Tampa, Pinellas, Northeast Florida, Fort Lauderdale, Ocala, Daytona Beach, and Space Coast Association of Realtors®. He is a lifelong resident of Florida and a graduate of the University of Central Florida. His real estate designations include Accredited Buyer’s Representative (ABR), Certified Real Estate Brokerage Manager (CRB), Graduate Realtor® Institute (GRI), and Preferred Housing Provider (PHP). In his career, he has sold over 1000 homes for his customers. He has structured lease options, contract assignments, seller financing, discounted note sales, and many other creative transactions. Additionally he has wholesaled or rehabbed over 100 residential and commercial properties through his websites WeBuyHousesFlorida.com and WeBuySinkhole.com. He is married with two daughters and in his spare time enjoys traveling, watching movies, reading, fishing, and spending time with his family.