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Will a real estate agents license increase liability for a real estate investor?
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Will a real estate agents license increase liability for a real estate investor?
Hello! I'm a real estate investor in New Mexico and I was wondering if it made sense to get a real estate agents licensee (called an associate brokers license here). My only interest in getting a license is so I could qualify to get my brokerage license in a couple of years and start a property management business which requires a brokerage license. However I'm concerned about getting a license as I have heard it could increase my liability significantly? Does anyone have any advice about this or know of where I could research this further? Also would I be able to qualify for a brokerage license even if I only pursued my own investment activities or would I need to work for a real estate broker selling real estate? Thanks so much I very much appreciate your help! Best, Luke
8 months ago - 2 answers
Best Answer
Chosen by Asker
Luke, if you're currently buying and selling property, I assume you are doing so on your own (buying property for yourself and then renovating/flipping) and using a real-estate agent/broker/firm/ to do the paperwork. Just a note: In most states, buying and selling property for yourself does not require a license. However, in some cases, a certain number of deals, and/or properties over a certain value DO require you to hold a State issued RE license. As a licensed agent, you ARE liable for following all RE Laws, Regs and Due Diligence guidelines set forth by your State, as well as State mandated advertisement guidelines and Federal Fair Housing Laws, to name a few. Also, as an agent, in some locations, you are required by law to "hang" your license with a broker. Depending on that broker's restrictions, they may ask that you close your deals through their office exclusively. The short answer, is I believe holding a license DOES increase your liablility by default, because you are asked to operate within the confines of the law as a licensed professional. It can also limit your flexibility during deal making. That being said, I think it's a wise first step if your ultimate goal is to become a licensed broker. Not only will you be familiar with RE law and practice once licensed, you can offer support to any agents you may hire because you've "been there." There's nothing worse than a clueless broker. Good luck in your decision.
Source(s)
real estate
by talldude
8 months ago
Asker's Rating: 