Getting started as a Texas RE agent. License/fees/start up cost?

Question

So I had been thinking about getting my RE license and finally decided that it would be beneficial for me to go ahead and get licensed. So I signed up with realestateexpress.com about two days ago and started the course. Of course I posted on my FB that I was going to be doing this and I had a friend of a friend message me, telling me that she just passed her exams and signed with a broker, and found it it's about 2k to get started working for them... I knew there were memberships and this and that, that you have to sign up for when you become an agent, but she went on to tell me that is basically a yearly cost to maintain the necessary things to continue working as an agent. But she didnt break down what that 2k pays for. All of this is in addition to your pre-license courses, gov fees, and exam fees, ex... My question is, does this sound about right to other investor/agents here in Texas? Does this cost vary by brokerage? Can someone break down the cost and what memberships, ex you have to maintain yearly as an agent? Im still def going to go forward with doing this, but I would like to try to get a better understanding of what to expect throughout this process, starting with right after passing your state exam to being employed with a broker, how that works, and the costs I need to expect to pay to get started. Also, if you work as independent, do you hire a CPA or something for taxes? Im sure taxes get complicated? I've set a goal to try to have my courses completed and take my exams by Feb 12th... So not a ton of time to figure things out and get financially prepared for start up costs...

Also, my husband can travel for work, so it may be a possibility to pick a city to move to, to start our RE business. Any suggestions on cities in Texas with demand for RE agents? Thanks!

Joel Owens · Answer

Hi Jessica,You will be if you pass the test an agent with an inactive license. You then go hang that license with a brokerage to be active.You are not employed by the brokerage. That would be a J-O-B.You are SELF-EMPLOYED. This means you have to run a business and generate your own income. Do you have 6 months of reserves set aside to cover start up expenses and cost before you land a closing?? When you land a closing generally brokers take 50% from a new agent.So if you sell a 200k house at 3% commission that is 6,000. Take away half is then 3,000 to you and 3,000 to the brokerage. Back out all your start up costs and ongoing costs and you are with paying tax on that 3,000 at almost breakeven.This is a tough business. Just want to make sure you know what is in store. 90% of new agents do not survive the first year. The remaining 10% in five years time 80% of those will have exited the business.It takes a long time to get to the top and very few have what it takes. Hopefully you are one of the ten percent and not the ninety.

Guy Gimenez · Answer

1. licensing fees as determined by TREC2. ongoing education: SAE/MCE classes but figure $50 annually 3. REALTOR Board / MLS fees: varies by brokerage but est. @ $1,000 annually4. Brokerage fees: varies by brokerage but figure $50 per month5. Business expenses: marketing, office supplies, vehicle maintenance, etc. $1,000 to $10,000 annuallyLots of variables so really dependent on you and what brokerage you choose to join

Jessica Martin · Answer

Greg H. Thank you for the Groupon info! I did get them to refund the $363 I paid for their middle package and will now get their best package for $199. Thanks so much!

Jessica Martin · Answer

Oh darn. I just bought mine 3 days ago for $363 for the silver package. I'm trying to get a hold of someone to see if they will adjust my payment or package or even both since they have that offer out there and I just signed up... Wish I had seen that earlier myself but maybe they will make an adjustment for me. Thanks for the info!

Greg H. · Answer

@Jessica Martin I ran across this Dallas Groupon for all the courses to get your license in Texas for $179http://www.groupon.com/deals/american-school-of-real-estate-express-tx-dallas-1?p=1&utm_source=newsletter&utm_medium=email&sid=e921eeff-bea0-4b99-9537-bd5a17a2bcd1&division=dallas&user=d015ab99662cde15854a27449b051215382487ae84c24c057d78b2182976978a&date=20141229&s=body&c=link&d=deal-page&utm_campaign=e921eeff-bea0-4b99-9537-bd5a17a2bcd1

Jessica Martin · Answer

Thank you Charlotte. I don't think I will mind a higher split as long as a brokerage is offering good training and following through with thier guidance promises. Thankfully Im a homemaker right now so when I do pass the exams and start I can direct my full time and attention to this.

Charlotte H. · Answer

I am in Texas and I just started my real estate course with realestateexpress. I am not sure about all the cost but the ones listed above sounds about right. There are many brokerage firms out there and they have different splits. Some even have only a monthly fixed rate. I would say to search online or try to get recommendations and interview 3 or more before deciding. I don't know which one I am going to choose but I keep hearing to go with one that gives a lot of education. I have a full time job that I am going to keep in the beginning so that is going to make it a little bit harder for me.

Jessica Martin · Answer

Thank you Paul. My husband is working down in Houston right now so that def a possibility of going down there to work. Or I'm close enough to Dallas/fort worth now to work up here. Looking at both

Paul Ewing · Answer

There is a Brokerage in Houston called StepStone Realty that is geared to investors with fairly low fees. They have branches in most major cities I think. I haven't gotten into their setup too much since I was sick when they had their presentation in Arlington earlier this month, but it may be an option for you. I am also looking at taking my exam in February and will be looking for a brokerage. I am leaning towards going with the small local one we have been doing our buying from for the last few years. They are a 50/50 brokerage, but it doesn't look like any other fees besides Realtor dues and lockbox gadgets and such. Plus I am comfortable working with the broker there.

Jessica Martin · Answer

Thank you both. I guess if they are willing to teach me then 50/50 is OK. I wasn't sure if they would be willing to teach me. I figured it was more of an "on your own" kind of thing. So that's good. I would say that's worth it for training for my first couple of deals or so.