DYI IS NOT FOR REAL ESTATE!

By
Real Estate Agent with Dunnigan, Realtors, Sacramento (916) 425-9715 CalBRE # 01188158

The conversation started something like this:"Hi! I met you at an event last year. I had been considering buying investment property and decided that I could save money by getting my real estate license. I just received my license from the Department of Real Estate and wondered what do I need to do now? I know that I have to pay $245 to the Department of Real Estate, but I wondered if there is a way to not have to to that."

It was such an overwelming, under-informed question that I didn't know where to start."If you have not hung it with a broker, you need to do that. You can't sell or purchase real estate as an agent expecting to receive a commission unless you are a broker or have your license hung with a broker. And no, you can't get out of paying the Department of Real Estate licensing fees."

His response was, "But if I hang my license with a broker, won't I have to give him a percentage of my commission? Is there a way that I can do this without having to give up commission?"

"Yes, you will have to give up a portion of your commission and no, every brokerage will get their pound of flesh, one way or another." (I didn't quite say it that crudely, but there it is.) "Not only will you have to pay DRE fees and give up some of your commission, but most brokerages are members of the Sacramento Association of Realtors, whose fees include belonging to the California Association of Realtors and the National Association of Realtor. If your brokerage belongs, you are required to belong as well. The fees, depending on the time of year, will be several hundred dollars. Also, your brokerage will want you to pay for Errors and Omissions Insurance, which is several hundred dollars as well."

He then asked "How hard is it going to be for me to learn what I need to know to represent myself?"
"Let's see...after 15 years, I am still learning how to best represent my clients. I would never recommend that you try this on your own without lots of training...there is simply too many liability issues. What I suggest is, since the buyer does not pay the commission, and most agents are not going to discount their commission for a buyer, why don't you find an agent that works the area you want to purchase in, let them represent you, and forget that you got your license?"

"Yea...maybe that is a good idea."

This conversation lasted for 20 minutes, and went into many more things, but you get the gist!

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Rainer
279,102
Dinah Stallworth-Lewis
Priority Real Estate LLC - 318.332.8281 - Natchitoches, LA
NATCHITOCHES, LA HOMES FOR SALE

Paula,

That was great advice!  I am really surprised this guy was in a  real estate class at all, asking those types of questions.  I am wondering where he got his license from " Disneyworld?"  Great post!

Apr 01, 2010 04:52 PM #1
Rainmaker
559,652
Melinda (Mel) Peterson
Grants Pass, OR - Bend, OR
The Blessed Realtor - ABR, CRS

Paula ~ Sometimes I think it is best to give it to them crudely :)

Apr 01, 2010 04:53 PM #2
Rainer
21,725
Laurie Gibson
Windermere Powerhouse Group - Caldwell, ID
SFR, Canyon County Real Estate

That's unbelievable,  Our job and responsiblities are sooo misunderstood.   Back to the school of thought, that all we do is list a house and sit back and wait for a check. 

Apr 01, 2010 04:56 PM #3
Rainmaker
254,487
Robert Machado
HomePointe Property Management, CRMC - Sacramento, CA
CPM MPM - Property Manager and Property Management

Paula, I agree with your thoughts on this subject.  Many people are trying to save money but have no clue what the heck they are doing or what they should not be doing.

Apr 01, 2010 05:13 PM #4
Rainmaker
53,551
Ingrid Laine
Sun West Mortgage Company, Inc. - Virginia Beach, VA
Loan Officer

I am a Mortgage Planner. So many of my good friends are Realtors.

I was in disbelief and just blogged about this earlier tonight about how undervalued Realtors were perceived a few years ago. Those "I'm a bartender, but I sell real estate on the side" hacks have really undermined the professionalism of being a Realtor. 

We should be happy that there are monthly fees in the sense that it will keep those barely licensed people either IN or OUT of the biz.

Real Estate transactions are so misunderstood, making the sale is the tip of your iceberg, closing it is a different matter altogether. It takes years of industry knowledge and experience to get it right.

Times are changing though, property sellers need experience more than ever now.

-Ingrid

Apr 01, 2010 05:14 PM #5
Rainmaker
510,324
Dan Tabit
Keller Williams Bellevue - Sammamish, WA

I've been cutting my own steaks for years, so I thought I'd save some money on my gall bladder surgery.  Meat is meat right? Hospitals charge $20 for an aspirin so why should I spend all that extra money? 

Extreme I know, we are not Doctors, but it does take time, experience and effort to be good at what we do. 

Apr 01, 2010 05:40 PM #6
Rainmaker
1,571,322
David Saks
(retired) - Memphis, TN

The kinds of questions the guy asked you makes me wonder if he had a crypt sheet when he took the exam.

Apr 01, 2010 08:21 PM #7
Rainer
146,688
Caren Wallace
Premier Property Group LLC - Tualatin, OR
Portland Caren Real Estate

Paula, all I can say is, what was he thinking??????

Apr 02, 2010 12:14 AM #8
Rainmaker
636,567
Mary Douglas
United Country Ponderosa Realty, Red Feather Lakes, Colorado - Red Feather Lakes, CO
REALTOR, Red Feather Lakes, Colorado

Hi Paula, Caren took the words right out of my mouth!  I'm glad he talked to you and you gave him the straight skinny. 

Apr 02, 2010 03:21 AM #9
Rainmaker
516,588
Russell Lewis
Realty Austin, Austin Texas Real Estate - Austin, TX
Broker,CLHMS,GRI

WOW...this person is so wrong on so many levels...a disaster in the making for sure!

Apr 06, 2010 03:36 PM #10
Rainmaker
262,842
Paula Swayne
Dunnigan, Realtors, Sacramento (916) 425-9715 - Sacramento, CA
Realtor-Land Park, East Sac & Curtis Park -Dunniga

Hi Russell!
Yep!  I hope he has figured out that he will probably cost himself money in the long run!

Apr 07, 2010 12:21 PM #11
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Rainmaker
262,842

Paula Swayne

Realtor-Land Park, East Sac & Curtis Park -Dunniga
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