Expert: Jessica Bryan - 1/1/2007

Question
Hi! My husband & I are going into the real estate business. More specifically, buying fixer-uppers and selling them. We want to get the lowest possible price on the homes we buy. We are considering that I get my broker's license, for benefits of subscribing to the MLS system-to see the deals before the general public. Is there truth to this? What are the pros & cons of having a broker's license & is this the most beneficial way to get the "deals" on houses?
Thank you for your time,
Stacy in Denver, NC

Answer
Dear Stacy;
I can't say that having your Broker's license will help you find the deals more than reading the paper or driving around looking for FSBO's.  I work with lots of investors and I am always looking for the great deals.  Often they discover them before I do because chances are when people need to sell their home at rock-bottom prices they can't afford to pay commissions and are therefore more likely to try to sell by themselves. However, I have access to MLS and can send updates and foreclosures on a daily basis to my clients.  I can also watch for price reductions and days on market...if a home has been listed for a very long time the Seller is more inclined to take a lower price.  As a broker you have access to lots of information that would take a great deal of time to research on your own.  Depending upon the MLS system your area uses, you will have access to mortgage information, tax information, etc.  (I am in the Triangle area of NC and use the Triangle MLS Tempo system).  

The other part about having your Broker's license is that you will be able to network with other brokers and find out about homes that are not yet listed.  You can also negotiate commissions with the Sellers and essentially get a better price on the home.  If the Seller, for example has the home listed with a 3% commission to the selling broker, that will be additional cash in your pocket.  If you go a buy the home without your license that same seller will have to pay the commission to the listing agent.  So, for example, if the listing agent lists a home for 6% commission and then advertises on MLS, that says they agree to cooperate with other brokers and buyer's agents by splitting the commission. But if the listing agent doesn't get an offer from a buyer using another agent (or being a broker) the listing agent will get the full 6% commission.  The Buyers cannot expect to get more off on the price of the home since the sellers are still obligated to pay out the full commission to their agent.  So you can see the benefit to having your license.  You stand to make thousands of dollars more.

Good luck and best wishes.

Jessica Bryan
Managing Broker
House to Home Realty Services