Home Selling in Chicago>Question Details

Burgeoning_i…, Both Buyer and Seller in 60202

Debating whether or not to get Real Estate salesperson License

Asked by Burgeoning_investor, 60202 Tue Sep 18, 2007

I want to sell my own home do I need to go through a broker or can I list it myself and only pay the buyer agent fee? I live in Illinois and considering getting my sales license. I have 3 properties I plan on selling over the next year. THANKS!!

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Dear Burgeoning-investor:
You pose some interesting questions. We see quite a few very similar to your first question. Can I list it myself and only pay the buyer agent fee?
"I gather from your question that you do not see any value in the role the listing agent plays, is that right? You figure you can "save the commission" and have the buyer's agent work "both sides" of the transaction, right?
When you "sell by owner", truthfully ALL homes are sold by owners. However, most homes are sold with "representation". If you had to go to court, would you defend yourself, or hire an attorney?

So you would expect the buyer to represent both the buyer's and your interests equally, is that right? If you were in court, could one attorney represent two clients?

I am guessing that you are going to buy a home after your sell yours, is that right? Are you planning to use a Realtor? Probably, because they work for "free". Are you going to look for a property being sold without representation, or do you think you will be a listed home (since over 90% of homes sold are listed in the MLS)?

My suggestion is to interview three good Realtors and determine if you believe they are "worth" the cost of commission. You'd be paying half of it already, right. So the remaining half...let's say 4%...IMHO if you do not believe the Realtor is worth it, then you have a dilemma.

My experience has been in almost every transaction I save my client's MORE than the value of my commission through my skills, including negotiating, staging, marketing, etc.

Lastly, I am selling three properties, should I get my license? Why. So you can "save the commission"?
I would suggest you sit down with a couple of brokers and ask them. In our company we can sell one listing a year without paying our share to the broker. Of course, we also need to refer our listings to another agent in our office, because our errors and ommissions insurance doesn't cover listings we well ourselves (that we have an ownership interest).

That also implies that the value you place on "getting my license" is sort of like getting a driver's license, right? Are you serious? I don't know Illinois, I'll share about California:
My Errors and Ommissions Insurance is $1,000 annually
MLS Dues are $660 annually
Licensing training would be $450
I pay my broker 30% of each sale.
In a typical week I:
- See 200 homes (2-3 hours a day)
- Train 4 hours
- Talk with over 150 homeowners
- Spend 7 hours looking a properties in the MLS online.
- Invest 5 hours on continuing education

If you were a Keller Williams agent, you'd also have a mentor for your first three transactions and pay the mentor 30% for getting you through them.

Unless you are serious about real estate sales as a career, don't bother with your license. If you could find a broker that would let you hang your license and do all four transactions for free...what protection would that broker be? The broker's job is to keep you out of legal entanglements.
2 votes Thank Flag Link Tue Sep 18, 2007
Keith Sorem, Real Estate Pro in Glendale, CA
MVP'08
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Hi Burgeoning:

Agree with Ute. You'd have to either get a broker's license or be associated with a broker to sell real estate to others.

The reputable company will not take an agent just to hang their license with them though, especially the ones just get started. My company requires us to work full time to be an associate. Not so reputable brokerage? Why bother?

Also, if you want to represent yourself as a professional, then other than just a license, you really need to get in here and get good training, the liability is too big; especially if you are representing yourself. Then definitely stop there, definitely do not represent buyer also. I just finished our legal training today. War stories always shake you up.

Keith's detailed information give you some insight about what we do and why it is not that easy to be a good Reatlor, which is what you really need to help you. .

Sylvia
1 vote Thank Flag Link Tue Sep 18, 2007
Sylvia Barry,…, Real Estate Pro in Novato, CA
MVP'08
Contact
If you have only a sales person license, you have to hang your license with a brokerage to be able to sell real estate for others. You don't need a real estate license to sell your own home or your own properties. If you act as the agent of someone else, you need a license. In summary, you can sell as many of your own properties as you want without a real estate license. Whether it's a good idea to do so is another question and since you did not ask that question I will not go into that.
Web Reference: http://www.go2kw.com
1 vote Thank Flag Link Tue Sep 18, 2007
Ute Ferdig -…, Real Estate Pro in Newcastle, CA
MVP'08
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Another issue to address in this situation is that when I sell a home owned by the listing agent, invariably - there are problems. It's almost like selling a FSBO. I asked a question a month or two ago to agents: Do you trust yourselves to sell your own property? The answer was a resounding "No!" One of the reasons for using an agent is that the agent acts as a third party, and having less at stake - is more objective about the property. Most agent/seller listings are overpriced! Big time. I almost sold a listing for with an agent/seller about a month ago. The property had been on the market for a YEAR. Why? It was just a condo, nothing special. OVERPRICED y $100k! Terms of the escrow were insane. My buyers, rightly, backed out. In attempting to maximize profit , the agent/seller was shooting himself in the foot - just like FSBOs tend to do.

I agree with everything else that has been mentioned here. Getting your license seems easy and a nice way to get around the commission. But there are too many fingers in the commission pie for this to be a profitable use of your time.
0 votes Thank Flag Link Wed Sep 19, 2007
Thanks all! You have been very helpful. Trulia should provide the ability to split best answers between respondents. Ute and Keith you have been very helpful.

Thanks again, Giovanni
0 votes Thank Flag Link Wed Sep 19, 2007
Hello Burgeoning. You cannot perform any activities that require a license unless you have your license hung with a broker. Typically, only those agents whose broker is a member of the board or association of realtors for the area that is covered by the MLS, can enter listings in the MLS. For instance, I belong to three separate MLS in our area, but that's only possible because I have my license hung with a broker that also belongs to these area associations. While I have a broker's license and I could open my own office, as long as I don't use my license to do that, I have to hang my license with a broker. So the answer to your first question (most recent post) is no, you cannot enter your listing in the MLS without having your license hung with a broker.
Second, yes you have to disclose that you have a real estate license and no I don't think that anyone will not show your house because it's agent owned.
Third, no you don't need a license at all to get your house listed in the MLS. You can get in the MLS as FSBO and just pay a FSBO service to get it in the MLS. Again, as already mentioned in my first answer below, I will not address whether it's a good idea to do that. I think others have already shared their expertise and opinions with you and you yourself seem to have doubts if it's a good idea. Good luck.
Web Reference: http://www.go2kw.com
0 votes Thank Flag Link Wed Sep 19, 2007
Ute Ferdig -…, Real Estate Pro in Newcastle, CA
MVP'08
Contact
BI
One more thing (sorry!)
"I've got the marketing covered"... Sorry, but that just ain't so. If ALL it took were home staging, then EVERYONE who stages would be rich.

Marketing is THE major component to exposing a property. However, that exposure has many different components. I use a checklist of over 25 things that SELLERS have control over to guide them in the marketing of a listing. Staging is ONE PART of that list. What about the other 24?

No question you are very intelligent. Talk with some Realtors. We are responsible for hundreds of thousands of dollars of real estate. Ask some local agents (maybe brokers would be better in your case). By the way, another REASON we suggest that Realtors who are owners not sell their own property is because, just the same way attorneys say "an attorney who represents himself has a fool for a client" applies to real estate. Some of the WORST transactions are Realtors selling their own lsitings. Not to mention you would not be covered by your E & O insurance.

Good luck
0 votes Thank Flag Link Wed Sep 19, 2007
Keith Sorem, Real Estate Pro in Glendale, CA
MVP'08
Contact
BI
Thanks for the expanded questions/ answers:
Each state has a Dept. of Real Estate that governs licensees. In most states to sell real estate (other than your own), you need to be licensed. You do not need to be a licensee to sell your own property. If your are a licensee and sell your own property you probably are required to disclose that fact.

1. To list a property in the MLS you need to list it with a broker who is member of the MLS. It does not matter if the property is listed as "agent owned". The techincal term would be Seller is a real estate licensee".
2. Do you want to make the most proift, or save on the commission? Over 90% of buyers first see the property they by with a Realtor. For my personally I prefer to deal with competent agents. If I know that an agent is not professional, I take that into account. Dealing with an untrained agent means that I basically am doing both sides of the transaction for the price of one. Does that seem fair to you?

In our office, if ALL the paperwork is not completed correctly, even ONE inital on ONE document, then I do not receive my check. I cannot afford to spend my time dealing with agents that don't know what they are doing. As I mentioned in my first post, if they are a new agent with a reputable brokerage, I know SOMEBODY in that brokerage and can be assured that they probably have a mentor who will make sure things go well. It takes two Realtors for a smooth transaction.

3. Techinically the broker is a member of the local Association of Realtors, who "own" the MLS. Agents that hang their license with that broker are members via the broker's membership.

I appreicate your questions. I personally would discourage you from a part-time career in real estate. To be succesful you need to invest a great deal of time,resources, and energy. In our office we discourage part time agents because they do not have the training or experience and end of causing the full time associates to spend a lot fo time answering questions that they should know.

Sort of like if I came to you and asked if I could be a part time IT sales person. Can I sell you a better server? Who about tune up your network? You'd probably laugh. Same goes here.

The benefits of using an experienced and train Realtor (meaning they are a member of your local associaiont state association, and Nationla Association of Realtors, ) should far outweigh what you'd spend in commissions.
0 votes Thank Flag Link Wed Sep 19, 2007
Keith Sorem, Real Estate Pro in Glendale, CA
MVP'08
Contact
Hi All – Thanks for the response and I appreciate your candor. However, I did not convey the essence of my question correctly. After I am a licensed real estate agent with no sponsoring broker and I choose to sell properties that I own – I have the following question.
1) Legally, Can I can enter my listing into the MLS and denote it as Agent owned? Does it matter that I list it as agent owned?
2) Will Buyer agents bring their clients to my properties? Currently, by owner listings are typically black balled by Realtors and I want my properties to have the best exposure.
3) By law to sell a property via the MLS do I need a broker?

Thanks, BI

Keith – I do not think getting a real estate license is like getting a drivers license. I understand it’s a serious investment in time and dollars. That’s why I am posting to trulia and doing research. If I jump into it even part time, as I am a full-time IT consultant, I want to make sure it’s worth it and it’s done properly. And yes my primary motivation to getting my real estate license is to sell my properties without paying the 2.5% commission. If I buy 20 properties over the next 10 years totaling 8 million dollars and I save 2.5% that is 200,000 worth of savings.

P.S. My wife does home staging part time and with the power of the Internet (craigslist, realtor.com, trulia, our own website (http://www.sunroomproperties.com/), and the MLS I think we have the Marketing covered.

Thanks again and I appreciate all your efforts in responding. I’m sure I’ll have more questions.
0 votes Thank Flag Link Wed Sep 19, 2007
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