Annual fees for being a REA and representing yourself?

Question

Hello! Thanks so much for helping with this. Looking into getting my REA licence but cant seem to figure out what the fees will be annually if I only wanted to represent myself and have access to the MLS? Do I need to be under a brokerage? Join the NAR? Help would be really appreciated. Thanks again.

Russell Brazil · Answer

Costs me about $5k per year to maintain my license. $1k board fees, $1k mls fees, $1k e&o insurance, $300 electronic key, $200 license, $500 continuing education, $1k brokerage fees and misc.

Ryan Blake · Answer

@Noah Weitzman As far as I understand it, if you have an active license and are not a broker, it must be hung under a sponsoring broker. You won't even be able to take the exam without a sponsoring broker already lined up. It has to be submitted to TREC  along with your completed course work before you can sit for it.

You can always represent yourself with or without a license. When representing yourself as an unlicensed person, you can pretty much do anything. And anyone can use the TREC 20-14 (basic purchase agreement). You can submit it via email to any listing agent or just call/email the listing agent and tell them you want to put in an offer for $XXX, let them know if you are cash or financing and the terms you are looking for in financing, the option period you want, and then the option fee amount, earnest money amount and closing date. Those are the main points to a contract. There are a lot of other smaller options you will see in the TREC form but those are the key points.

Noah Weitzman · Answer

Thanks so much @Ryan Blake, so I understand correctly even to represent yourself you still need to hang your licence under a broker for the first three years?

Ryan Blake · Answer

@Noah Weitzman I am not an agent but may be able to give you some guidance. As an agent in Texas, you will have to hang your license under a broker for your first three years. Then after that you can continue to do so or you can work to get your broker's license and be 100% independent. You can do a simple web search to find brokerage firms that will hang  your license for a flat fee verse a % of every sale/purchase but you  won't get much assistance from them and I am not sure exactly how  "legal" all that is.

Other things to consider, 1) there is a fee to have access to and be able to list on the MLS, 2) I think the state requires you to carry or it would be a very good idea to carry Errors and Omissions insurance commonly called E&O insurance 3) if you plan to tour properties, you will need to get those electronic keys that agents have and I am guessing there is an annual fee associated with that.

Those are the big ones I can think of off the top of my head.

Danny Webber · Answer

good info here

David M. · Answer

@Noah Weitzman

Use $2k annually as a nominal figure.  It varies from brokerage to brokerage.  Asa ReMax agent, there is a fixed fee I pay ReMax annually in addition to the cut they take from my commission (which is in addition to the split with my broker). Also, I think brokerages get different e&o premiums (just market pricing and perhaps have many claims, etc).

You if hang your license with an independent brokerage, it might be less.  Could be more if they need more fees to cover their operating cmexpwnse.  As another example, eXp has their fees on their website.  In nj I’d be doing about $2600 annually (I’m actually below $2k annually with my ReMax franchise).

Other variables include your local NAR chapter dues, MLS dues.  Check in Texas how many MLS are there and what is there coverage.  NJ has 12 overlapping mls.  Luckily, I just need one.  Agents further East or south of me need to have more than one.

Sounds like in tx there is a lower barrier to entry to be a solo broker.  It still 3 years as a full time gent in Nj but there are other requirements that make it somewhat more cost prohibitive.

Regarding the errors and omission insurance, I’m pretty sure you will have to have that as an agent.  I don’t think any broker would accept you without (it comes with signing up with your broker in my area so you don’t search for your own policy).  But, if you plan on being a solo broker and only represent yourself, you don’t need it.  Regardless if agent or solo broker, the E&O policy won’t cover yourself as it’s a conflict of interest.  Some take that as a reason to never represent yourself, but I don’t agree.

I hope this helps.

Ray I. · Answer

@@Michael Plante

Who did you hang your license with in Rochester, NY? I am interested in doing something similar and I am hoping to avoid broker fees.

Jake Alger · Answer

Hi Noah,

The way it works here in Washington, and I'm sure it's the same or very similar everywhere else, you have to hang your license with a designated broker.  That is unless you're a managing broker yourself and appointed to your own firm as a designated broker.  The requirements to become a managing broker are different than a regular broker (normal salesperson).  You have to pay more money, take another test, and I'm sure are held to stricter continuing education requirements, given you can / are now responsible for anyone under you.

I can see where if you're doing multiple transactions a year it can be helpful.  Mainly from the standpoint that you gain a commission from the properties you're buying.  You can roll that commission money in as part of your down payment during the escrow process.  This means less money out-of-pocket to fund a deal, technically.

Ultimately you'll have to weigh the costs of maintaining that license like was mentioned above me.  We all typically have  the main fees such as MLS dues, NAR dues (not required), a fee to hang your license (desk fee), continuing education fees, license fees, and a commission split with the broker.  If paying those fees are greater than the commissions you receive throughout the year, it's probably not worth it.  All depends on what the numbers show YOU.

Michael Plante · Answer

I did find it useful

BUT I first did it because I was going to buy a business which the broker had listed for 150k. He said he would give me half of the 7% commission if I got my license.  So the $5250 was with it

I also bought some rentals there also. It was in New Port Richie FL and. St Pete.

In Rochester NY I got a few low pieces places.

And in Wilmington NC I got approx 350k on properties.

Annual fees for being a REA and representing yourself?

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