Necessary Steps for a Part-Time Real Estate Investor: Accessing MLS and Listing Properties

As a part-time real estate investor, you might be considering obtaining a real estate license to access the Multiple Listing Service (MLS) and occasionally list your own properties. The question arises: do you need to join a brokerage to achieve this goal? The answer, in most states in the U.S., is a resounding yes. Let's delve into the details.

Brokerage Requirement for Real Estate License

To hold a real estate license and access the MLS, you must affiliate with a licensed real estate brokerage. Even if you plan to primarily use your license for your own investments and occasionally list your properties, the law usually mandates that you be associated with a brokerage.

Key Considerations

Brokerage Requirement

Hanging your license with a brokerage means working under a broker who is responsible for the legal and ethical aspects of your transactions. This requirement ensures compliance with state and national standards.

MLS Access

Accessing the MLS is essential for listing properties and accessing property data. Membership in the MLS is typically required through a brokerage that is a member of the MLS.

Brokerage Options

Not all brokerages cater to part-time investors, but some do offer a flat-fee structure. These options can be beneficial if you don't plan to engage in a high volume of transactions.

Independent Broker

If you desire more independence, you can consider becoming a broker yourself after fulfilling the necessary experience and education requirements. This will allow you to have your own brokerage and operate independently.

State Regulations

Be sure to check your specific state’s real estate commission regulations as requirements can vary from one state to another.

Working Through a Broker

If your primary goal is just to access the MLS and occasionally list properties, partnering with a brokerage that aligns with your investment strategy is likely the best route. Everything must go through the broker because:

If the broker is an MLS member, the salespeople must be members of the MLS. Salespeople cannot join the MLS without their broker. REALTORS are part of the Association of Realtors, which controls legal forms.

Independent Listing

While you can advertise your own properties for sale, you cannot use the MLS or a brokerage for these listings. Instead, you can place an ad in the newspaper for 'For Sale by Owner.' You will also need a source for the legal forms for listings, sales, and other necessary documentation.

Conclusion

As a part-time real estate investor, it is imperative to understand the legal requirements and responsibilities associated with obtaining a real estate license. While the process might seem daunting, working with a brokerage that suits your needs can simplify the process and ensure compliance with state and national laws.