Do you Need a Real Estate License to Flip Houses? (2022)

by Tara Caruso

Being a house flipper can be a lucrative business if you do it right. One of the most common questions is do you need a real estate license to flip houses?

While the answer is no, you don’t need a license, there are many advantages to having one.

Keep reading to learn the benefits of flipping houses as a real estate agent.

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Get another real estate license in a state that offers full license reciprocity. Full license reciprocity means that you can bypass the required courses and just take the state test. This way, you can increase your profits by working in multiple states. Especially if the housing market is booming in a state that isn’t your own.

Access To The MLS

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While there are a number of benefits to having a license, one of the most important is that you have access to the Multiple Listing Service (MLS).

The MLS, is a database of all homes currently for sale in your area. There are a number of reasons why the MLS is better than sites like Zillow or Redfin.

First, you are able to be extremely detailed with your search criteria. Second, you will get a more detailed view of the homes.

Third, the MLS makes it easier to do comparative cost analysis (CMA). Fourth, only licensed real estate agents can list homes on the MLS, which is a way that real estate agents make money.

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Finally, having access to the MLS will also allow you to schedule your own appointments to view properties that you are interested in, without having to go through a real estate agent.

This is a good option for people who are using an alternative method to sell your house.

This is just one way that having a real estate license benefit with flipping houses.

As a house flipper, you will want to be able to see as many properties as possible, and being able to access the MLS will allow you to do just that.

Tactic for Success

You can set up notifications in the MLS to send you an email as soon as a property in your area becomes available that meets your criteria. Since you’re one of the first people to know about the property, you can act fast and have a better chance of getting your offer accepted.

Support From Broker

Buying and selling houses can be a complicated and stressful process, especially if you’re doing it on your own.

There are a lot of important details to keep track of, and it’s easy to miss something vital in a contract or make a mistake that could cost you a lot of money.

That’s why having a real estate license can be such a big advantage when you’re flipping houses.

When you have a license, you can get support from your broker. They can help you navigate the process and make sure that everything is done correctly.

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Having someone knowledgeable and experienced in the real estate market can be a lifesaver when you’re trying to flip houses.

Whether you’re trying to figure out section 8 arbitrage laws or how much landlords make in a certain neighborhood, a broker’s advice is priceless.

It’s one less thing to worry about, and it can give you the peace of mind that comes with knowing that you have someone on your side who knows what they’re doing.

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Joining an online brokerage. These are brokerages that exist only online and don’t have any physical locations. Without the overhead of traditional brick-and-mortar brokerages, they can pass the savings on to agents in the form of lower commissions and fees. This is a great option for house flippers who only want to be an agent for their own properties.

Save Money On Commissions

Commissions can eat into your profits when flipping a house, but if you have a real estate license, you will be able to save substantial money on those commissions.

The standard commission for selling a home is 6% of the selling price. This is divided between both the buyer and seller’s agents.

Typically 3% goes to the buyer’s agent and 3% goes to the seller’s agent. As the seller of a home, you would normally be responsible for paying the entire 6% commission.

Note that these percentages can be higher or lower depending on the seller’s preference and the standard in your location.

Another quick way to up your profits are these cheap fixes to increase home value.

Commission Saving Tactics

But if you have your real estate license you can represent yourself and save money both when you buy and sell your house.

When you are buying a house you can use your commission percentage as a negotiation tactic and take a smaller percentage.

Most sellers would be thrilled to not have to pay the entire buyer’s agent commission, you may even be able to get a lower purchase price as a result.

If you are selling a house then you only have to pay the buyer’s commission and you get to keep your entire 3%!

This alone will save you significant amounts of money if you are flipping houses.

It’s important to remember that even if you have a real estate license, you are not required to use it when buying or selling a house.

You can still choose to work with an agent if you want to. But it’s nice to have the option to save some money on commissions.

Tactic for Success

When you are ready to sell your home hold your own open houses. Not only will this allow you to meet potential buyers who are not already working with an agent, but if they decide to buy you will have the opportunity to collect both buyer and seller commissions, greatly increasing your profit.

Gain Industry Knowledge

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As a real estate agent, you have access to a wealth of knowledge about the real estate industry.

You can use this knowledge to your advantage when you’re flipping houses. You’ll be able to learn about the latest trends, what’s hot in the market, and what buyers are looking for.

This information can help you make sure that you’re flipping houses that will be in demand and that will sell quickly.

It can also help you price your homes correctly so that you’re making a profit.

How to get your real estate license:

  • Make sure you are eligible to get your license – Each state is different in what they require. In general you must be at least 18 years old, have a high school diploma or GED, and pass a background test.
  • Take an accredited real estate pre-licensing course – You will need to take a certain number of hours of approved classes. This number varies by state and can be between 40-200 hours but typically under 100 hours.
  • Pass your state’s real estate exam – Once you have completed your pre-licensing course you will need to schedule and pass your state’s real estate exam.
  • Select a broker and apply for your license – After you have passed your exam, you will need to find a broker to work for and apply for your license.
  • Pay for MLS membership – You will be required to pay for membership to your local MLS. This allows you to have access to photos and information for properties listed in the MLS.

Network

Additionally, as a real estate agent, you’ll have the opportunity to meet a lot of people who are involved in the industry.

This includes other agents, brokers, lenders, and home inspectors. These connections can be invaluable when you’re trying to flip houses.

You never know when you might need a favor or some advice, and having a network of people you can rely on can make all the difference.

Reasons to not get your real estate license:

  • It can be expensive – There are fees for the courses and exams, and you’ll also have to pay annual MLS dues and real estate license dues.
  • You have to take continuing education courses – In order to keep your license active, you’ll need to take continuing education courses. These can be costly and time-consuming.
  • You have to disclose you are a Realtor – When you are buying or selling a property for yourself or a family member you will have to disclose that you are a licensed real estate agent.
  • It’s not necessary – You don’t need a real estate license to flip houses. There are plenty of successful house flippers who don’t have a license.

Increase Trust From Buyers

While having a real estate license isn’t necessary to flip houses, it can help you gain the trust of potential buyers.

Many people feel more comfortable working with a licensed agent, they feel safer and that they are not going to get taken advantage of since realtors have to abide by a code of ethics.

This could give you an advantage over other house flippers who don’t have a license.

By building trust with potential buyers, they may be more likely to want your home and make you an offer.

Wrapping Up

While you don’t need a real estate license to flip houses, there are advantages to having one.

If you’re serious about flipping houses, getting your license is something you should consider, as it could make the difference between flipping houses successfully and struggling to make any money at all.

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About the Author

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Tara is a licensed real estate agent in Southwest, FL. She helps buyers and investors find their dream home by educating them about real estate and how they can use it as an investment.