Why You Don’t Need a Real Estate License (CFFL 0304)
Why You Don’t Need a Real Estate License
Jack Butala: Why You Don’t Need a Real Estate License. Every Single month we give away a property for free. It’s super simple to qualify. Two simple steps. Leave us your feedback for this podcast on iTunes and number two, get the free ebook at landacademy.com, you don’t even have to read it. Thanks for listening.
Jack Butala: Jack Butala with Jill DeWit.
Jill DeWit: Dude.
Jack Butala: Oh my God, the surfer thing’s coming out. What’s happening to you?
Jill DeWit: We just hung out with these guys today. Go ahead.
Jack Butala: Welcome to our show. In this episode, Jill and I talk about why you don’t need a real estate license.
Jill DeWit: Yay.
Jack Butala: Very confusing sometimes for some people. We’re going to make it fun and funny.
Jill DeWit: Yeah.
Jack Butala: Great show today, but before we get started, let’s share something interesting that happened to us lately Jill.
Jill DeWit: When was the last time you heard someone say, “What’s a tee pee?” They meant like a tee pee.
Jack Butala: Oh from last night.
Jill DeWit: It was the funniest, funniest thing. We have this, one of my best pals in the world, and she’s british. Jack calls her Canadian. It’s hilarious.
Jack Butala: She says Canadian stuff like, “What’s a tee pee.”
Jill DeWit: Exactly. “Are you Canadian? What’s the deal?” Oh my God.
Jack Butala: We’re going to get so many emails on that.
Jill DeWit: You have to back up and say, because you’re from Detroit, you have a loving close relationship with a lot of Canadians.
Jack Butala: Like half of my friends are Canadian.
Jill DeWit: There we go.
Jack Butala: Seriously, half.
Jill DeWit: Yes.
Jack Butala: We all just harass, poke fun at each other.
Jill DeWit: Hilarious. My dear, she’s welsh, friend, we’re having a discussion, and I’m trying to remember what, I don’t even remember what it was about, but she said, “What’s a tee pee,” and so we happened to be at a Chinese restaurant, so the guy to her left gets his chopsticks and a napkin and starts to make one on the table.
Jack Butala: He made a tee pee. He did a pretty good job.
Jill DeWit: He did a great job with the chopsticks and a cloth napkin going, “This is a tee pee.” She goes, “Oh okay.” That was the best. Instead of describing it, or drawing a picture, he actually made one right there on the table, and I think that was the best. “That’s a tee pee.”
Jack Butala: Right.
Jill DeWit: I guess we had chopsticks. It was perfect. Yeah, that was so darn funny.
Jack Butala: That was one of the funny moments last night of about 300.
Jill DeWit: There’s a lot we can’t share.
Jack Butala: Yeah, exactly. You took the words out of my mouth.
Jill DeWit: Yeah, that was a good group.
Jack Butala: Let’s take a question posted on one of our members on Land Academy online community.
Jill DeWit: Soon to be the Jack and Jill online community.
Jack Butala: Mm-hmm (affirmative).
Jill DeWit: Luke asks, “Okay, on the DVD,” that’s going to go away too, at some point, by the way, but this is going to be funny. You know what? We’re going to listen to these shows five years from now and go, “Wow, look at what we were doing.”
Jack Butala: Yeah, we used to have DVDs, we used to have 32 websites instead of one.
Jill DeWit: Exactly.
Jack Butala: We used to be confused even about what the topics were on our podcast.
Jill DeWit: Oh my gosh.
Jack Butala: We are simplifying everything.
Jill DeWit: Totally. All right, “On the DVD, Jill says,” this is our educational program that he’s referring to, “Jill says that they have the buyer pay the property taxes. The property’s still listed in the name of a seller, which is myself, at the county until the land contract is paid off though, correct? How do you guys deal with the tax bills? If it’s listed in the seller’s name, doesn’t the seller get the tax bill in the mail? Do you forward the tax bills to the buyer, or how do you usually structure this?” This is so on my mind. I think we covered this too on one of our member calls the other day, didn’t we?
Jack Butala: Yes.
Jill DeWit: Okay, good. I’m like, “Why is this fresh on my mind?” That’s why.
Jack Butala: There’s two ways. If you sell a property, if you own a property and you sell it on terms, meaning that somebody buys it from you and they make payments, there’s two ways to do it. A deed of trust, which is where the property actually goes into the buyer’s name just like a car or a house, goes into the buyer’s name, they own it, and then they make payments to you, because you are now behaving like the bank, and when it’s all done, the escrow agent removes the lien, and the person owns is free and clear, the buyer. That’s one way.
The second way is, and this is what Luke’s referring to, what’s called a land contract. Depending on which part of the country you’re from, it’s called all kinds of stuff, a note, seller financing, a land contract, but they’re all the same thing, and essentially if Jill sells me a property and I agree to pay $100 a month for six years, five years, I start paying her, I own the property, and if we do it just on a land contract, then it stays in Jill’s name until I’m done with the payments and then she deeds it over to me. Luke’s asking how we handle the taxes.
In the first example, the escrow agent escrows, literally, the taxes every month in the payment, and then pays the tax bill once a year or twice a year, depending on where you’re at in the country.
Jill DeWit: PITI.
Jack Butala: Right. In the Jill and Jack way, Jill does the same thing, and that $100 payment, a portion of that goes to the taxes, and then Jill pays the taxes when it happens.
Jill DeWit: Mm-hmm (affirmative).
Jack Butala: What you don’t want to do, is have the buyer, in the Jill and Jack example, be responsible for paying the taxes, because if they stop paying the taxes, but continue to pay you, there’s a chance that the property could be foreclosed on by the tax [inaudible 00:05:00], the county.
Jill DeWit: Then you have a big mess.
Jack Butala: Then it’s messy, messy, real serious mess, because not only did you lose, but the buyer loses, and there’s nothing to convey.
Jill DeWit: Right. In our way, I know that the tax bill’s getting paid, because I’m paying it, and I just rolled it into the cost.
Jack Butala: Yeah. If you’re renting an apartment, or if you’ve ever rented an apartment, chances are, you don’t pay a water bill. The reason for that is because the building owner does, because if you stop paying, that’s the only utility in most of the parts of the country, that if you stop paying it, they can place a lien on the property, so they just build it into your rent and do it themselves.
Jill DeWit: I didn’t know that, to be honest.
Jack Butala: Really?
Jill DeWit: I did not.
Jack Butala: You were looking at me kind of funny.
Jill DeWit: I should have known that.
Jack Butala: She’s looking at me like, “Are you lying about that?”
Jill DeWit: That’s really funny. It’s funny, not the electricity though. They could shut the electricity off, you could sit there in the dark, but they could shut the water off, but they have to shut it off to the whole building. I guess they’re not going to let one person sink the whole ship.
Jack Butala: Right. That’s an interesting analogy for water, sinking the ship.
Jill DeWit: You like that?
Jack Butala: Mm-hmm (affirmative).
Jill DeWit: Thank you.
Jack Butala: If you have a question, or you want to be on the show, reach out to either one of us on the Land Academy online community. Today’s topic, why you don’t need a real estate license. We get this question twice, maybe three times a week.
Jill DeWit: I love this. I am as passionate about this as I am about driving for dollars.
Jack Butala: Why don’t you need a real estate license Jill? People think you need a real estate license to buy and sell property.
Jill DeWit: Because I’m not representing anybody. I’m buying it for myself, and I’m selling it for myself. I’m the only one profiting from it, and I’m the only one that’s putting their neck on the line. I’m not promising anything to anybody, and telling them, “Oh really, this is going to be worth X,” or whatever you want to do. I don’t know how realtors really, you know, how they, a lot of the rules, because I’m not one. I’m just representing me.
Jack Butala: Exactly.
Jill DeWit: I’m not needing, I don’t need to disclose anything to me. I have all the information. The information is only for me. You know what I mean?
Jack Butala: I do.
Jill DeWit: I mean seriously. This is just what’s, there’s a few things that are floating around out there that really drive me crazy.
Jack Butala: Okay, so here’s really the question, because here’s really the question I have for you, why is this so confusing? Why do brand new people think that you need a real estate license? Do you think it’s like-
Jill DeWit: Misinformation.
Jack Butala: The realtor association of the world is doing it on purpose? Do you think, where do you think they just get that notion?
Jill DeWit: I really think that there are people out there that think they’re doing things correctly, and they’re just kind of relaying what they know without doing the research. I’m going to go with the everybody’s good people and they’re trying to do the right thing. I’m just going to say that people think that you have to be a licensed real estate agent to do this stuff, and you really, really don’t.
It’s like, I talked about this the other day, the guy was in the back of the Uber, poor guy was told that you have to be a US citizen to own property here. No you don’t, and I’m going to trust, I’m hoping that the person told him that, thought that, they didn’t do their homework. Otherwise, because if they knew that, then it was discrimination. That’s really not cool. People walk around thinking, “Oh I have to be a citizen.” No you don’t. You know, it’s so funny too, especially here in Arizona, half of Canada is buying up a ton of Arizona property.
Jack Butala: Yeah. You know, I was going to say that.
Jill DeWit: Anybody in Arizona that has anything to do with real estate, absolutely knows that you do not have to be a citizen because half of the property, there’s a lot of investors from Canada that are buying up a lot of stuff around the Phoenix, and Scottsdale, and southern Phoenix area, and they can.
Jack Butala: I think the root of the thing is definitely not the people who are, if you think that you have to have a real estate license, it’s not your fault at all.
Jill DeWit: Right.
Jack Butala: I think it’s because the world’s kind of gone a little crazy, and I don’t want to sound like an old man here, but when you have to have, what did you say earlier? You have to have a license to cut hair.
Jill DeWit: Oh yeah. We did talk about that.
Jack Butala: You have to have a license to, you know, there’s a license for everything.
Jill DeWit: Here’s a funny thing, because, thank you for refreshing my memory. You and I were talking about this when we were thinking of these topics recently. In Arizona, governor Doug Ducey, one of the things that I really appreciate that he was trying to do, or is trying to do, is reduce some of the stupid licenses out there like, “Do I need to be licensed to be a trash collector?” Come on. There’s versions of that. You have to have a barber’s license, or you have to have a hair dresser’s license. You have to have this license, and a nail person license.
I understand some of the things, we want them to know the proper techniques, and hygiene, and I understand all of the training that goes into it, but to have this license, and require them to do them every year as a formality is so nineteen, I don’t know what. It’s not two thousand and anything. It’s just like, come on guys. It’s a little ridiculous. I think maybe that’s where some of this stuff comes from, that people think, “I have to have a license.” You have to have a driver’s license, and you have to have a motorcycle license.
Jack Butala: As a school teacher, you have to be certified. There’s a lot of [inaudible 00:10:31] for a lot of stuff that, that’s obviously important, but I think that that’s the root of the issue here. It only makes sense to most young people that you have to have a license to buy and sell real estate.
Jill DeWit: I think too because of the dollar amount associated with a lot of the transactions. I think that’s why people get scared and think that, “Oh this is something that should be done with a professional.” You know what? No. If your grandpa passes on, and you just now have $100,000 in the bank, and you want to invest it in some real estate, and become an investor, you don’t have to go get a license to do that. Spend your $100,000 however you want. You want to sell it? Now you’ve bought $100,000 worth of property, and this could happen, six months later somebody comes to you and says, “I want that because I’m going to put a shopping mall over here.” You still don’t have to run out and get a license to sell it to the guy. You don’t have to bring in a broker to pay him a commission. You don’t have to do any of that. You can just turn around and sell it. You know?
Jack Butala: Exactly. The whole system is setup for, when property, a lot of years ago, got homesteaded, when you buy it or either get it or buy it from the federal government for next to nothing so that you could work it and work the land, and live off of it, and possibly sell your crops, it started the economy. Very often you’d have to deed part of it to your brother in law, or deed it to your kids, or whatever. The system’s setup for that. This whole notion that you need an attorney to close a deal, and an escrow agent to close a deal, first of all, it’s not true. You don’t. Except there’s a few places in the country where it’s been made a law, and most of them are east, very eastern states, but you don’t have to.
Jill DeWit: Mm-hmm (affirmative).
Jack Butala: You really can do most, we do it all the time here. Our members do it all the time. Do all the stuff yourself without a lot of risk.
Jill DeWit: You know what? Here’s my thing, what I really want anyone to take away from this show is, do your own homework. Ask those questions. I have flat out called attorneys in other states doing transactions to find out, A, do I need you to do this, and B, what has to be done. I have had very great luck with really nice attorneys that have really helped me out, and sometimes totally free said, “You just got to follow this form, and no, you don’t need me to do it,” and I’m like, “Thank you.” Don’t trust us. Do your own homework for yourself too, and ask those questions.
Jack Butala: Right. Very good Jill. Well said. Don’t trust us.
Jill DeWit: Thank you. Don’t trust us. Excuse me. Don’t trust me. Look into my eyes. You know, yeah? You get it.
Jack Butala: I get it. Join us in another episode where Jack and Jill discuss, “Don’t trust us though.” Jack and Jill discuss how to use information, that’s me-
Jill DeWit: And very, very trustworthy inspiration, that’s me-
Jack Butala: To get just about anything you want.
Jill DeWit: We use it every day to buy property the right way for half of what it’s worth, and sell it the right way immediately.
Jack Butala: If you’re a real estate agent, no offense, but stick to buying and selling houses and stuff. You are not alone in your real estate ambition. You’re cracking me up man.
Jill DeWit: That was good. That was really good. You know, there’s so much, I feel like half of what we do is, it’s just kind of not explaining how this works, but just letting people know that you can do this. That’s what I think is so darn funny about what we do, and our show, and our future shows, and things that are coming, and it’s funny. You and I have run into people in pretty high up positions that go, “Huh?” You know what I mean?
Jack Butala: Oh yeah. It happens regularly.
Jill DeWit: They’re like, we’re talking pretty high up people in other industries, and make a good living, and have a staff of 10 attorneys that go, “What? What do you mean?” We’re like, “Yeah.” They’re like, “What?”
Jack Butala: Yeah. Even in real estate. The higher up, the super high end commercial real estate people, they look at me cross eyed.
Jill DeWit: Mm-hmm (affirmative).
Jack Butala: When they find out that I buy rural vacant land, first of all. Their first immediate question is, “Who wants that? No one wants that.” Then the second thing is, “Well what do you have to do to it to sell it? How much does that cost?” Well we don’t do anything. We just buy it right.
Jill DeWit: Mm-hmm (affirmative).
Jack Butala: It’s just amazing to me.
Jill DeWit: I though too, there’s been times in our careers, where we’ve owned a ton, I mean a ton of acreage, and I remember people asking, “How much do you have?” You and I personally, are kind of guessing, but it’s a lot of acreage, and they look at us like, “What? You do this all by yourselves? You’re doing this on your,” and you’re like, “Heck yeah.” I just think that’s really funny when you say, you know, “100,000 acres.”
Jack Butala: You know what? This is a good point. Is this amazing or not? Is what we do amazing. It doesn’t seem like that to me. It just seems like a normal thing to do everyday to me.
Jill DeWit: You know, it is, because we’re so in it, but it’s kind of fun. I have friends that just like to know. “What are you doing today? What did you buy?” It’s not even their thing. I have a really, really good friend, and she’s constantly asking me, and she just thinks it’s so fascinating. I’m like, “Well today I’m buying 50 acres over here for X, Y, Z price,” and she’s like, “Wow. I don’t even own a half of an acre and you’re buying 50 acres on Tuesday, and then on Wednesday you’re doing this, and on Thursday you’re doing that.” I’m like, “Yeah.”
Jack Butala: You know what? That tells me your friends have a little bit of respect for you.
Jill DeWit: They do.
Jack Butala: I don’t have that problem.
Jill DeWit: Yeah. What do you mean, you don’t have that problem? Your friends don’t have any respect for you?
Jack Butala: No, that’s exactly what I mean. They have no respect for me.
Jill DeWit: Oh gee.
Jack Butala: They don’t even care about asking me questions like that.
Jill DeWit: You’re silly. Love it.
Jack Butala: Information and inspiration to buy undervalued property.
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