Question for Licensed Brokers.....

[Robert B.]

Generally speaking, are Licensed Brokers open to having a new/aspiring REA work under their umbrella if the REA's intent was to solely focus on his or her own RE portfolio?

[Robert Carmody]

Most brokerages allow agents to have certain number of "free" or "reduced" deals per year, if the transaction is a personal sale or purchase (you are named on the title or mortgage to the property), meaning you wouldn't owe them anything, or would owe a smaller amount than your typical commission split you'd pay if representing a client. Once the agent reaches their limit on free or reduced split transactions, they are responsible for paying their normal commission split, just as they would when representing another customer. If you plan to make a lot of purchases and sales each year, and don't mind paying the commission split, then the brokerage might not mind that you hang your license there and generate a little bit of revenue for them, even if you don't aspire to be their top salesperson.

On the other hand, if your real estate activity consists of 1 or 2 sales per year, and you also don't want to pay the brokerage any commission or commission split for them, they are probably not going to be very motivated or excited to bring you into their company. Keep in mind that in addition to not producing any notable revenue for the company, you come with a certain amount of risk or liability that they assume responsibility for. Newer agents, or those that aren't very active with sales, present a greater risk on the deals that they do have, or beyond risk, may require more of the broker's time and resources to navigate their own transactions towards closing. 

If you are planning on only a couple transactions each year, or less, having your license may not actually be saving you any money in the long run. There are a lot of expenses involved when getting your license, keeping your license, and having an active license. You've got association dues, MLS dues, E&O insurance, brokerage fees/franchise fees/admin fees, continuing ed classes, commission splits, testing fees, lockbox access, business cards, signs, materials, and the list goes on. On top of that, your Errors & Omissions Insurance does not usually cover a broker/agent's personal transactions outside of their own home that they occupy, so if you are representing yourself and the other party or the other agent has a claim against you, you don't have coverage for the legal fees and any damages awarded or fines imposed. Most claims are made against a seller by a buyer, or are made by a customer against an agent, so chances are that you aren't going to sue yourself when representing yourself, but there is the possibility that the other party or the other agent does. It's something to be aware of and to clarify with the broker you choose to work for, and have a clear understanding of their policies when it comes to personal investments.