You Don’t Need a License to Buy and Sell Real Estate (LA 987)
You Don’t Need a License to Buy and Sell Real Estate (LA 987)
Transcript:
Steven Butala: Steve and Jill here.
Jill DeWit: Hello.
Steven Butala: Welcome to the Land Academy Show, entertaining land investment talk, I’m Steven Jack Butala.
Jill DeWit: And I’m Jill DeWitt, broadcasting from sunny Southern California.
Steven Butala: Today Jill and I talk about how you don’t need a real estate license to buy and sell real estate.
Jill DeWit: What?! Wait, what?
Jill DeWit: Yes, that’s true.
Steven Butala: Of all the things that you need a license for, and I’m sure Jill’s got a whole list of them she’s going to describe, because some of them are silly, like being a barber.
Jill DeWit: Yup.
Steven Butala: You do not, in any way, need to a license to buy and sell real estate.
Jill DeWit: Yup.
Steven Butala: [inaudible 00:00:38] we have a lot more freedom than we all think.
Jill DeWit: Yup.
Steven Butala: Before we get into it, let’s take a question, posted by one of members on landinvestors.com online community. It’s free.
Jill DeWit: Damien asks, I primarily wholesale residential buildable lots inside … okay, wait, wait, wait. Can you go back up here?
Steven Butala: I primarily wholesale residential buildable lots inside of sub-divisions.
Jill DeWit: [crosstalk 00:01:07] Inside of sub-divisions. He put a question mark and that’s what threw my there. I’m like is that a question or a statement? Looking to branch out to other markets, however, I was wondering if there was a way I could find only counties with land that primarily uses public water and sewer and don’t need perk tests, wetlands tests, environment tests, et cetera.
Jill DeWit: Okay, so we want to find infill lots that don’t need those items.
Steven Butala: What he’s asking is, is there something in a data set in RealQuest, DataTree or whatever you’re using that identifies the buildability of a given piece of property, land.
Jill DeWit: Thank you for translating.
Steven Butala: The answer’s no.
Jill DeWit: [inaudible 00:01:51].
Steven Butala: So these data sets, while they’re extraordinary in the amount of information that they provide.
Jill DeWit: That would be cool.
Steven Butala: What they generally provide, this is how I mentally see it. What they generally provide is all the stuff that you could put on a piece of paper about a piece of property, but no so much the stuff about the physical asset. Now, there’s lots of exceptions to that, so you can get square footage very easily if it’s a house, and certainly if it’s land most of the time. Does it have a pool to how many bedrooms does it have and stuff, but we’re talking about land right now, so it’s almost all, does it have a mortgage? That’s one there, that’s one a piece of paper, but the attributes of the land, where utilities are? Is it in a flood plains? Things like that, those are happen afterward, and so if you’re brand new at this, this is a very good question, if you’re new at this, when you open this data set for the first time and you start horsing around in there, you don’t know what to expect. And a lot of times people, just because it’s curiosity, it’s not like they’re wrong, they don’t fully understand that the actually physical attributes about the property, access, and specifically access, nothing, it’s not there.
Jill DeWit: I look at it this way, which is true, the reason we have this data is around assessors, and it’s really what the assessors need to know or what to know so they can justify the taxes that are charged on the property. Do they really care at the end of the day what direction, what the view’s like or access, really, or buildability? No, that’s stuff we want to know as the buyer or seller or even end user.
Steven Butala: Yeah.
Jill DeWit: It’s different than what, they don’t really care about that. The type of house, if I go to the county, and I’m going to build a house on a piece of property, they’re not really concerned, they’re not going to tell me build bigger because we’re going to charge you more. It’s just kind of like whatever you’re going to do, let us know. They don’t really kind of care about that.
Steven Butala: I mean Damien asked this question in Land Investors and then many people answered. Many, many people came to a very quick answer. Mike Marshall was one of them who works at the LA county office, in Planning and Zoning, I think, and he gave a dissertation about what’s included and what’s not, and why there’s so many variables involved, and it basically summarized what Jill just said. Assessors need to know X, everything after that, we’re investors, we need to know it.
Jill DeWit: Right.
Steven Butala: And it’s not that hard to put the puzzle together after you do a few deals.
Jill DeWit: Well yeah.
Steven Butala: I will say this. Here’s a potential silver bullet, if you buy property, infill lots let’s say, in a very, very urban area, Phoenix, Albuquerque, Los Angeles, and the area’s relatively flat, there’s a darn good chance the property you buy is gonna have utilities right at the lot line. So there is somewhat of a silver bullet. Here’s an example of San Diego County itself, is very difficult to buy infill lots in, because it’s not flat. Oh wait Steve, Phoenix isn’t flat wither, Phoenix has mountains all over the place. Phoenix is completely flat, or it’s got massive mountains.
Jill DeWit: I love it when you have a conversation with yourself, and I don’t have to. That’s the best part.
Steven Butala: Same thing with-
Jill DeWit: Oh wait Steve. Can you imagine? I’m going to start doing that. I’m going to say, “Oh wait Jill, put that down.” Do you really need another?
Steven Butala: We really talk out of both sides of your mouth constantly.
Jill DeWit: Yeah, you do.
Steven Butala: I feel compelled to tell you.
Jill DeWit: Yeah. Do you know what that is? It’s this little guy on this shoulder, and the little guy on this shoulder, that’s what’s going on in your head right now.
Steven Butala: The angel and the devil.
Jill DeWit: And you just verbalized it for all of us. [inaudible 00:05:54] babe.
Steven Butala: If you look at infill lots in like places like Oklahoma, they all have utilities, especially urban places, right to the lot line.
Jill DeWit: So good.
Steven Butala: It’s just that San Diego is just packed full of unusable infill lots, as an example, but people who mail there buy incredibly awesome property at a very cheap price. You just have to, this kind of thing, it takes experience.
Jill DeWit: It does.
Steven Butala: I can tell you right now, buying infill lots in Phoenix is awesome.
Jill DeWit: Right.
Steven Butala: Buying infill lots in like any of the center states, and a lot of places in Texas, really good, especially urban areas. When it starts to get hilly, there’s problems, and California’s nothing by hilly.
Jill DeWit: Sorry, I’m just still laughing at you. I just love your vocabulary today. Whatever’s going on here, it’s great. I don’t know what it is. What was in your coffee this morning?
Steven Butala: You know what? I don’t think I’ve had enough coffee, [crosstalk 00:06:50] probably overcompensating.
Jill DeWit: That might be it.
Steven Butala: Today’s topic, you don’t need a license to buy and sell real estate. This is the [inaudible 00:06:58]. Okay, in true to form, that’s great Steve. I meet so many people. Why do real estate agents have-
Jill DeWit: Oh let me do it, let me do it.
Steven Butala: Go ahead Jill.
Jill DeWit: Well why not Steve? Please tell us more. Pick me.
Steven Butala: That’s great Steve. Everybody I know who buys and sells real estate or in a real estate business, they have a license.
Jill DeWit: I think they need it. They’re saving on the fees.
Steven Butala: They have a real estate agent license. They either had it, because they’re buying and selling houses for people, or they have it hanging on the wall over there, but they only do their own deals.
Jill DeWit: And I think it leads more credibility, doesn’t it lead more credibility?
Steven Butala: Let me clear all this up for everyone, one and for all.
Jill DeWit: Thanks Steve.
Steven Butala: You need a real estate, issued by the state your in to represent somebody in a purchase or the sale of their property, not yours.
Jill DeWit: Right.
Steven Butala: So you’re representing someone else in the purchase or sale of their property. Whether it’s a seller or a buyer. You do not need a real estate license to buy your own real estate.
Jill DeWit: Yup.
Steven Butala: And there’s no limit. I think the car industry confuses this a little bit because you don’t need a license to buy and sell your own car either, but if you buy and sell more than your own cars three times in a year, in Arizona anyway, you need a dealer license. There’s no such thing in real estate. You can buy a skyscraper without a license and without the use of a real estate agent, by the way, and you can buy 400 of them.
Jill DeWit: And your purchase agreement could be on a cocktail napkin, by the way.
Steven Butala: It often is. Commercial real estate is way less complicated, ironically, than a residential, and it’s because residential real estate agents can make it complicated.
Jill DeWit: Well, you know what I think about too? And I think, especially as an investor, you don’t want one, because if you think that, well first of all, having a real estate license, I know you said some of this already, it opens you up to all these things that you have to disclose now. There’s things you need to know and you have to disclose about the property and go into it.
Jill DeWit: The other thing is, I look at some people that, I think that they go into it, because they think they’re going to save money. Like okay, I’m going to do all my own deals, so no one else is going to get the percentage, I’m going to get the percentage. Just don’t have any agents, and then you get all the money anyway, and if you think that, you’re getting the full percentage because you’re the only agent that’s involved in the transaction, we’ll don’t forget, you’ve got to pay that broker a fee, often broker’s take a percentage of your cut. So you’re not getting the full commission like you think you are, versus just not having an agent or a broker involved at all.
Steven Butala: There used to be reasons for people who buy and sell real estate like us, to be a real estate agent, and the biggest one was access to the MLS.
Jill DeWit: Right.
Steven Butala: Well that’s not, if you just go to realtor.com, you have access to all the MLSs in the whole country, plus all that data.
Jill DeWit: Right.
Steven Butala: Plus a tremendous amount of backend data.
Jill DeWit: Exactly.
Steven Butala: If you dig through there, you can find some that’s downloadable. There’s no reason to be a real estate agent at all, unless you’re going to go out every day in the morning and look through listings or you’re going to represent couples and their new baby on buying a new house. That’s it, and that’s a whole different business. It has nothing to do with what we do, nothing. There’s no real estate agent who’s ever been a career real estate agent that knows anything about data at all. If they knew something about data, they would be an investor.
Jill DeWit: Exactly. I find it interesting the number of agents that say oh I want to be an investor, I’m like well why? They’re like because they make all the money and they have all the money. I’m like, well hold on a moment then, why aren’t you transitioning to that, and they just like throw their hands up, they just can’t possibly-
Steven Butala: Completely different town.
Jill DeWit: Yeah, and so.
Steven Butala: It’s apples and oranges. But my point to this is that, I’m trying to end this question once and for all, because there’s a lot of, and it’s not your fault.
Jill DeWit: Yeah.
Steven Butala: It is a lot of misconception about real estate licensure. So let’s just say it once again, it all has to do with representing someone else. If you represent yourself, you don’t need a license, and there’s no limit.
Jill DeWit: And you’re buying it yourself.
Steven Butala: No limit.
Jill DeWit: And you own it yourself, it’s your name on the deed, it’s your property. You’re not representing anybody, you can do whatever you want and make all the mistakes you want. They’re trying to look out, and I get it, having a licensed person. You work at Toyota let’s just say and the whole plant’s moving and you’re a professional and you’re busy, you don’t have time, there’s a need to agents sometimes, and they’re looking out for you and your wellbeing, and helping you make these decisions. That makes sense, and you want them to licensed and educated.
Steven Butala: Yeah.
Jill DeWit: That kind of a thing, but for this.
Steven Butala: So in the House Academy Program, we talk about the necessity for what we call boots on the ground, which is if Joe and Sally seller call me back, because they got a letter and say, “You know what, your time is perfect, I would love to sell you my house for $185,000. What’s the next step?” And it’s in Tennessee and I live in California. Somebody, and the sooner the better, has to go out there and sit them down and find out why they want to sell and establish a relationship, put a face to name, and we call that BOG. Well that’s great Steve. Isn’t that BOG thing, aren’t they representing you, the seller? Don’t they need a license? No, here’s why. Let’s take a step further, because they’re a partner in the deal. No they’re an owner, and they’re the seller, just as much as I’m the seller, and we cover that all in the program. That’s not even what I would call workaround. That’s total, full blown, we’re in business together to buy and sell real estate, their job as a partner is to handle the stuff on the ground, the boots on the ground piece. My job is to raise the money, keep the transaction going, employee transaction coordinator, get a title agent, all that other stuff, that I can do from behind a desk in a different state.
Jill DeWit: Right.
Steven Butala: You don’t need a license to sell real estate.
Jill DeWit: Well that’s great Steve.
Steven Butala: You just like saying that.
Jill DeWit: I do.
Steven Butala: Partners, partners, partners.
Jill DeWit: Yup.
Steven Butala: Well you’ve done it again, you’ve spent another 15 minutes or so listening to the Land Academy Show, join us next time of the episode called Why Men Don’t Understand Women.
Jill DeWit: And we answer your questions, plus at [inaudible 00:13:33] landinvestors.com, it is our online community and it is free.
Steven Butala: You are not alone in your real estate ambition.
Steven Butala: We’re getting a little creative with the Friday shows.
Jill DeWit: I was wondering what it was. Something going on there?
Steven Butala: No, it’s all real estate driven.
Jill DeWit: Okay.
Steven Butala: It’s because people in general handle real estate deals differently, sometimes it’s gender specific.
Jill DeWit: I concur. Wherever you’re watching, wherever you are listening, please rate us there. We are Steve and Jill.
Steven Butala: We are Steve and Jill. Information.
Jill DeWit: And inspiration.
Steven Butala: To buy undervalued property.
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