My Diary - Getting a New Jersey (and Pennsylvania) Real Estate License

[Jim Stoffey]

Hi all!

This is a very long and detailed post.  Way longer than I anticipated, but I tried to answer all the questions I had prior to starting this process, which was a lot.  If any of the info below is incorrect, let me know and I'll fix it.

So far, I've taken the pre-licensing course, passed the state exam, and signed up for fingerprints.  I've started interviewing brokers, but I could use some recommendations if anyone has some.  See step 6 below for more...

I was on the fence for a long time about whether or not I wanted to get my license.  I owe a quick shoutout and thank you to @Mark Gallagher, @Jay Hinrichs, and @James Wise for nudging me in the right direction.  

Ultimately, I decided the license will provide resources and connections that I otherwise will not have. Plus, I want access to the MLS so I can stop bugging other agents to show me properties and I can make offers in hours, not days.

Hopefully some wannabe agents will find this useful.  Feel free to reach out to me with any questions.  I'm happy to help with what I can!

Timeline: 

1. Decide you WANT to be an Agent

The first (and hardest, IMO) step to becoming an agent is to decide that you want to be one.  There are plenty of good posts on BP from people smarter and farther along than me that can help you answer that question.

• I found J Scott's post very helpful

2. Pick a School

Once you decide you want to be an agent, you need to sign up to take the pre-licensing course.  You can't do it online.  In New Jersey, you have to take a 75 hour pre-licensing course and pass an in-class test on the last day.  You can take a 10-day class (two weeks M-F), 8 hours per day, or a 12 week class.  If you can do it, I recommend the 10 day class.  You go over a LOT of information, and having it fresh will definitely help you pass the tests.

• This should help you choose a school:
  
  • A-Z list of classes from the state of NJ*
  • Easy to navigate Weichert classes*
    
    • *Note - the hosting brokers are not allowed to advertise their brokerage to you during class time, so the material will be the same regardless of what class you take.
  • Or just Google it, that's how I found the Princeton School of Real Estate, which is where I took the course.  It was the soonest available and that was my only criteria.
  • The school cost me about $350 and the required book was $40.
• Quick Tip #1 - the material in each class is the same. The class instructor is not. I recommend doing some research on the instructor prior to signing up.

• Quick Tip #2 - if you're looking to get both your PA and NJ license, take NJ first.  The hours transfer to PA (they only require 65 hours).  Once you pass the class and state exam for NJ, you'll only have to take the 20-question state portion for PA.  It does NOT work the other way around. (Thanks for the tip, @Mark Gallagher)

3. Take the Pre-Licensing Course

1. Okay, so you've decided you want to be an agent and you've signed up and paid for the pre-licensing course.  Now you're committed!  

• Course Outline:
  • Arrive to class with a notepad, highlighter and some pencils/pens.
  • The 630 page textbook you'll receive is called "Principles and Practices of New Jersey Real Estate" by Frank W. Kovats.  Don't be intimidated, it's a handy book that you'll be able to use as a resource long after you pass the class and have your license.  You won't be reading every page.
  • You'll go over everything from NJ laws to mortgages to property management to valuing an investment property.  The tests seemed to focus on NJ laws, contracts, types of estates & deeds, types of agencies, and scenarios of do's and don'ts.  Lots of stuff on discrimination.
  • Take efficient notes.  Use your highlighter.  Each day I would read through the glossary and highlight terms we went over.  This helped immensely.  If your instructor talks about a point a lot, you can bet it will be on the test.
  • Remember, you're there to pass the test, but just as importantly you're there to be a better investor.  It's a great opportunity to further your knowledge.
• Quick Tip #3 - Bring a bunch of business cards.  Make friends with the people in the class.  People from all walks of life will be there, it's a great place to make connections.

4. Passing the Tests

The last day of the pre-licensing course you'll have to pass a test, and then you must take the state exam.  You must get a 70% or higher on BOTH the class exam and the state exam.  The class exam is similar to the state exam.  

Most schools will let you retake the school exam either the same day or at another time for free if you fail.  You don't have to take the whole class over.  The state exam costs $45 to take.  You can take it as many times as you like if you keep failing.

You cannot sign up for the state exam until you pass the pre-licensing course and they register you with PSI, the testing company.

You have one year from the day you pass the course to pass the state exam, get your fingerprint and have your license hung up in a brokerage.

Once you pass the pre-licensing course, they'll register you with PSI, the testing service.  You'll get an email from PSI with a link to go and sign up for the test.  They'll have all your info already.  You can choose to take the test anywhere in the state, so I recommend driving to take it as soon as possible while the info is fresh.  I got the email a few hours after passing the course, and signed up to take it the next day on a Saturday, which means I completed the entire process in 11 days.  If you ask me, that's the way to do it.  Get it over with so you can get out there and get started.

• Tips to pass the tests:
  • Take the practice quizzes in the book.  These were the ones I focussed on: 3-12, 14 & 15, 20. 
  • Take all the practice quizzes, the glossary quiz, and the practice final.  If you're consistently getting 75% or higher, you're ready for both the class exam and the state exam.
  • The glossary is key. Make sure you go over terms you're unsure of.  Ask questions in class.
  • The exams are based on comprehension, so you need to watch for how they word the questions as you will trip yourself up.  For example, when a question is asked in a definitive manner, look for a definitive word in the answers.  This should help you narrow down answers.
    • "You MUST do which of the following" vs. "You SHOULD do which of the following" can yield two completely different answers.
  • You have 4 hours for both the test in the course and the state exam.  You won't need 4 hours.
  • I paid attention (the best I could for an 8-hour class in a metal folding chair) took notes, and did the practice tests.  I had no issue with either test.  K.I.S.S. - keep it simple, stupid!  If you're on BiggerPockets reading this, you're already smarter than most of the agents out there and if they passed, so can you!
• Quick Tip #4 - Don't compare answers to answers on the tests.  Read the question, then read answer A, read the question, then read answer B and so on.  Also, don't change your original answer unless you're 100% sure you know you were wrong.

5. Getting your Fingerprint

You've done the hard stuff.  Congratulations!  Once you pass the test, you need to get your fingerprint taken.

I was told you cannot schedule your fingerprint until after you take the state exam, but I'm not sure if that was accurate.  I advise you sign up for the fingerprint as soon as you pass the state exam.  I passed the state exam on 8/8/15 and the earliest I could get for the fingerprint within 100 miles of me was 8/17/15.  Ridiculous, right?  

Oh, and it cost $70.

6. Finding a Broker

At any point during this process, you can start interviewing brokers.  You can't do any transactions until you have a sponsoring broker.  Once you pass the state test, take the printout they give you (or you may receive it in the mail) to the broker, fill it out with the broker and mail in the $169 state fee.  The state will send your license to your broker (they hold it in Trenton in the meantime).  You cannot do business on your own.  If you leave the brokerage, you/the broker must notify the state and have your license transferred and accepted by a new broker.

Once you find a broker and join the broker, you can apply to the board of Realtors to become a Realtor (basically just pay your fees). Then, you can join the MLS of your choice, or as many as you choose. You must be a Realtor to join the MLS.  There are 7 MLS in New Jersey and each has a separate fee.  $100-200 each I believe.

The most common question asked in the class was "why would a broker want me?" or "how am I supposed to find a broker?"

Believe it or not, brokers will want YOU! You're splitting your commission with them, paying for your own advertising and MLS fees, etc. They're happy to bring you on board because you'll be bringing them business.

Now, I haven't exactly made it this far.  I'm still trying to choose the perfect broker.  Technically, this means I don't have my license yet.  But I can provide advice on what I've learned so far and the approach I'm taking as a real estate investor.  

• My personal approach:
  • I'm attending local REIA meetings and picking other agent's brains
  • I'm looking for a brokerage that will allow me to pursue buying my own properties to rehab and rent
  • I'm looking for a brokerage with a lot of investor connections, that is investor friendly
    • Should have a lot of foreclosure, bank owned listings.  Investors will go look at those properties, which is a good way to make connections.
  • I'm looking for a brokerage with in-house property management
  • I'm being transparent/clear with my intentions
  • Broker has a good education & training program
  • Broker has good reputation in the community
    • Decent article on this topic...

Summary

Summary of Steps to Take:

1. Decide you want to be an agent

2. Choose a school

3. Take the pre-licensing course

4. Pass school test

5. Schedule & pass state exam.  Schedule @ psiexams.com after email is received

6. Get fingerprint. Form provided from school. Schedule @ bioapplicant.com/nj

7. (or anytime) Interview different brokers and get a feel for what's out there

8. Choose a broker, have sponsoring broker submit your license application with you

9. Get out there and get started

Summary of Costs:

$400 course & book, $45 state exam, $70 fingerprint, $170 state application, $100-200 per MLS, $??? Brokerage fees

Total: $700-$1000

If you've followed me this far, you deserve a medal.  Now go get your license! :)

Edit: The formatting looks good before I post, but not so good after.  Sorry about that.