Those of you who have real estate license...

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Those of you who have real estate license...

Abigail J Steinert
Architect · Wichita, KS · Member since 2021 · 12 posts · 4 votes

For those of you that have your real estate license, do you work for a real estate company (like remax, coldwell, etc) or do you do it independently? I just learned there is a difference between real estate agent and real estate broker; agents can't work independent but brokers can.

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Nathan GesnerBusiness Member
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Real Estate Broker · Cody, WY · Member since 2010 · 28k+ posts · 41k+ votes
5y
Originally posted by @Abigail J Steinert:

For those of you that have your real estate license, do you work for a real estate company (like remax, coldwell, etc) or do you do it independently? I just learned there is a difference between real estate agent and real estate broker; agents can't work independent but brokers can.

There are typically three different licenses you can have:

1. Sales Agent or Salesperson: this is a person just licensed. They must work under the supervision of a Broker. There is no requirement for you to upgrade to a Broker license; you can stay a sales Agent forever.

2. Associate Broker: this is a person with a certain amount of experience and additional education that has upgraded their license but continues to work under another Broker. For example, my state requires at least two years as a licensed agent and an additional 45 hours of education to upgrade your license to a Broker license. We can upgrade to a Broker license and still work underneath another Broker, or break off and start our own Brokerage.

3. Responsible or Managing Broker: this is someone with a Broker license that has their own brokerage. A Responsible Broker can work alone or they can have Agents and Associate Brokers working underneath them. There's no limit to how many agents they supervise. They may be allowed to supervise multiple offices or multiple companies. For example, I own my own company and have two offices in two different towns that I'm responsible for, plus I'm responsible for a Property Management company 8 hours away and for a vacation rental company owned by a friend even though I don't own any share in either business.

I hope that helps.

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  • Abigail J Steinert
    OP
    Architect · Wichita, KS · Member since 2021 · 12 posts · 4 votes
    5y

    Also, how do you go about getting your license if you want to be independent?

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  • Jonathan GreeneBusiness Member
    Real Estate Consultant · Madison, NJ · Member since 2016 · 6k+ posts · 7k+ votes
    5y

    Everyone needs to put their license with a brokerage. Some agents choose not to join NAR so they are not realtors, but all agents have to have their license under a brokerage. There are discount and transactional brokers (not good options if you care about your brand in my opinion) that can be more advantageous to someone. It's a liability issue, only a broker and brokerage can cover you for errors and omissions.

    If you got your broker's license in a state (or some a manager's license) then you could open your own brokerage and be independent, but the fees would be 10x.

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  • Nathan GesnerBusiness Member
    Moderator
    Real Estate Broker · Cody, WY · Member since 2010 · 28k+ posts · 41k+ votes
    5y
    Originally posted by @Abigail J Steinert:

    For those of you that have your real estate license, do you work for a real estate company (like remax, coldwell, etc) or do you do it independently? I just learned there is a difference between real estate agent and real estate broker; agents can't work independent but brokers can.

    There are typically three different licenses you can have:

    1. Sales Agent or Salesperson: this is a person just licensed. They must work under the supervision of a Broker. There is no requirement for you to upgrade to a Broker license; you can stay a sales Agent forever.

    2. Associate Broker: this is a person with a certain amount of experience and additional education that has upgraded their license but continues to work under another Broker. For example, my state requires at least two years as a licensed agent and an additional 45 hours of education to upgrade your license to a Broker license. We can upgrade to a Broker license and still work underneath another Broker, or break off and start our own Brokerage.

    3. Responsible or Managing Broker: this is someone with a Broker license that has their own brokerage. A Responsible Broker can work alone or they can have Agents and Associate Brokers working underneath them. There's no limit to how many agents they supervise. They may be allowed to supervise multiple offices or multiple companies. For example, I own my own company and have two offices in two different towns that I'm responsible for, plus I'm responsible for a Property Management company 8 hours away and for a vacation rental company owned by a friend even though I don't own any share in either business.

    I hope that helps.

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  • Nathan GesnerBusiness Member
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    Real Estate Broker · Cody, WY · Member since 2010 · 28k+ posts · 41k+ votes
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    My description is generally true. There may be particular states that are slightly different. In most states, you can get one license that allows you to buy/sell property and to manage rentals. In other states, the sales license is separate from the property management license.

    Check with your state for specific requirements.

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  • Abigail J Steinert
    OP
    Architect · Wichita, KS · Member since 2021 · 12 posts · 4 votes
    5y

    @Nathan G.

    For my situation, I'm going to start flipping houses and I'd like the real estate license to get in on the ground floor to find great deals. What I'm asking is would I have to stay under a real estate broker for this? I wouldn't want to set up a huge company with agents under me, just wanting it to work with the flipping business better. I really wouldn't work with clients unless they're looking at buying my houses or I'm buying from them.

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  • Hunter Crowder
    Real Estate Agent · Mc Kinney, TX · Member since 2018 · 16 posts · 6 votes
    5y

    @Abigail J Steinert if you get your license technically you will have to be under someone, or until you’re allowed to become your own broker (State’s vary).

    Either way having a broker is a good way to learn what to do and what not to do; especially on the legal side of things

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  • Nathan GesnerBusiness Member
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    Real Estate Broker · Cody, WY · Member since 2010 · 28k+ posts · 41k+ votes
    5y
    Originally posted by @Abigail J Steinert:

    @Nathan G.

    For my situation, I'm going to start flipping houses and I'd like the real estate license to get in on the ground floor to find great deals. What I'm asking is would I have to stay under a real estate broker for this? I wouldn't want to set up a huge company with agents under me, just wanting it to work with the flipping business better. I really wouldn't work with clients unless they're looking at buying my houses or I'm buying from them.

    If you are a real estate agent, you must operate under a responsible broker. There's no way around that.

    If you are only buying and selling houses for yourself, then you may be able to do that without a license by hiring an attorney to draw up the contracts or even by using the title company and writing up the contracts yourself. You would not have access to the multi-listing system or the supervision of a broker so it's additional risk.

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  • James Hamling
    Real Estate Broker · Minneapolis, MN · Member since 2011 · 5k+ posts · 6k+ votes
    5y

    "....I'd like the real estate license to get in on the ground floor to find great deals."

    Oh @Abigail J Steinert, if it were only that easy. 

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  • Ruth Lyons
    Investor · Colorado Springs · Member since 2016 · 232 posts · 150 votes
    5y

    As an investor, before I became an agent, I had a subscription to PRIVY, a real estate platform specifically designed for investors. It's a robust software program that was well worth the fee giving access to the same MLS data that real estate agents have at their fingertips.

    If your main reason for becoming an agent is access to deals, I don't think it's worth the time, effort and financial outlay. Get on the lists of all your local wholesalers, get PRIVY and attend local meet ups. Build your network and deals will come out of the woodwork. 

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  • Jay HinrichsBusiness Member
    Real Estate Consultant · Summerlin, NV · Member since 2014 · 45k+ posts · 66k+ votes
    5y
    Originally posted by @Abigail J Steinert:

    @Nathan G.

    For my situation, I'm going to start flipping houses and I'd like the real estate license to get in on the ground floor to find great deals. What I'm asking is would I have to stay under a real estate broker for this? I wouldn't want to set up a huge company with agents under me, just wanting it to work with the flipping business better. I really wouldn't work with clients unless they're looking at buying my houses or I'm buying from them.

    you just have to gut it out for two years ( is most states rules some are 3) as an agent under a broker. then sit for your brokers test ( ore here in Oregon we are all brokers) so the next level is Principal Broker.. I am one of the folks that I got my Brokers license in CA after two years of being an agent .. and have been independent ever since 1977. I have owned 3 different brokerage companies over the years. But the last 7 or so I am just a broker no affiliation .. But I can join the MLS if I choose to.. I can buy E and O if I want it.. etc. In today's competitive RE space there are alot of alternatives for brokers to hang your license with.. Without going with a Major brand that will cost you 15 to 50k a year in their fees.. For instance my wife here IN Oregon is with a company that has over 500 agents and she has a flat fee of 135.oo a month which includes E and O and broker support.. No other fee.. Although she has a transaction coordinator that makes 400.00 an escrow and is worth every dime of that.. She Ran multiple C 21 offices in her career so she does not need the big brand And as a veteran all her business or virtually all is referral.. But I think your on the right track being licensed is a major bonus if your going to be very active and especially if your going to flip..

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  • Jay HinrichsBusiness Member
    Real Estate Consultant · Summerlin, NV · Member since 2014 · 45k+ posts · 66k+ votes
    5y
    Originally posted by @Ruth Lyons:

    As an investor, before I became an agent, I had a subscription to PRIVY, a real estate platform specifically designed for investors. It's a robust software program that was well worth the fee giving access to the same MLS data that real estate agents have at their fingertips.

    If your main reason for becoming an agent is access to deals, I don't think it's worth the time, effort and financial outlay. Get on the lists of all your local wholesalers, get PRIVY and attend local meet ups. Build your network and deals will come out of the woodwork. 

    to play devils advocate its not all about finding the deals its exiting the deals and it really depends on your market if your in a low value asset market maybe not that critical.. but if your working in our markets were everything these days tends to be 400k and over  even two points on the list side is 8k.. and on the buy side same thing it might be 5 to 6k.. so you add 10 to 20k to your bottom line per transaction it adds up.. If your just doing a deal a year then I agree.. but if your going to do any volume.  To me it just makes economic sense.. Plus you would be surprised you could do some deals during the year and generate listing or selling commissions that could add to your gross revenue.. One year I did one transaction but it was a 5 mil dollar apartment that I got 2 points on..  took all of 45 days start to finsih and no more than maybe 20 hours of my time and it was a referral from someone in SF that i knew and the buyer was from Hawaii coming out of a 1031 in Vegas.. Met this buyer and we have been doing business ever since and some pretty big business.. Never would have met them without my license. 

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  • Kelly Watkins
    Real Estate Agent · Wichita · Member since 2021 · 10 posts · 17 votes
    5y

    Hi Abigail, I am licensed. Our KS real estate laws work as described in Nathan G's 3 license scenario. I am not familiar w/ the property management license he mentioned that some states have so I wont speak to that. There are advantages to having your license such as the knowledge you'll gain during the required training (although most will not deal with investment properties), the real estate commission you should be able to save on (at least) one side of every transaction (minus what you owe to your brokerage & E&O insurance) & access to the MLS.

    However, there are disadvantages as well. The process to obtain your license takes, all in, about 30 days and approx. $1,500.00. There's additional training and dues required every year to stay active. You then do need to hang your license w/ a brokerage for at least 2 years, go through 45 hours of additional training as Nathan mentioned for your Associated Brokers but in Ks you also need to have 45 sales under your belt. Not easy to do w/ just your own sales. You can just stay a licensed salesperson but you would want to discuss that w/ the brokerages you are considering as each have their own philosophy on investors getting their license just to sale their own properties it seems. I think the most important thing to consider is the higher standard you will be held to once you have your license. You can not just stick a FSBO sign in the yard, you must follow all license laws & make clear you are a licensed agent in all negotiations.

    If you are just starting out I would recommend using a Realtor. I know there is a cost involved but their knowledge of the market & the comps, their advice on negotiating an offer & a list price once complete and the advertising they already have in place could actually increase your ROI & would take a load off your shoulders while you cut your teeth on all of the other fun stuff you will encounter along the way!

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  • Stephanie Arce
    Member since 2021 · 1 post · 0 votes
    5y

    @Abigail J

    You can only work independently if you’re a broker and want to open your own company and work for yourself . If you’re an agent a broker has to be held responsible for you .

    0Reply
  • Greg PowersPro Member
    Real Estate Agent · Manchester, NH · Member since 2013 · 120 posts · 159 votes
    5y

    @Abigail J Steinert, just because you are required to work under a broker doesn’t mean you can’t do your own thing. If you pick the right brokerage, you won’t have any quotas to fill for them, you won’t have to work “floor time” (a sort of mandatory phone answering), etc. You will be an independent contractor and can run your business as you see fit, within certain guidelines. You can do as many or as few deals as you want; you can just do your own deals without having to work with outside clients, etc.

    As some have pointed out, you may pay fees to your office, the state, or nationally as an agent; but you will also have the ability to collect referral fees, which can be significant if you’re purposeful about it.

    In my opinion, being an agent gives you options. I feel it opens more doors than it shuts.

    Good luck!

    2Reply
  • Aline Sevigny
    Rental Property Investor · Hampton Roads, VA · Member since 2017 · 15 posts · 10 votes
    5y

    @Abigail J Steinert

    I am a REI and I also have a RE Agent license.

    I have my license with a Brokerage that understand the contract variations that we may need to use to buy RE...

    - now, for my broker, he does not require me to pay him a monthly fee, if I buy or sell through MLS I have a "nominal" fee to him but I don't pay him anything if it's off MLS who makes it a win-win for him and I...

    - find some REI who are also RE Agent and ask them who they hang their license with and contact them to see what they offer and the fees they would charge you...

    - now, this brokerage I have does not do training for RE Agent really, I can ask questions but no formal training, but again, I only use my MLS accès to comps my deals and go and look at them...

    2Reply
  • Erin Bentley
    Member since 2017 · 1 post · 0 votes
    5y

    @Abigail J Steinert

    I'm an agent because I also like selling retail. If I were to solely have my license for my own deals, I would work for one of the many flat fee brokerages or get my broker’s license. I’m sure it’s different in every state, but in Texas, an agent has to be licensed for at least 5 years before taking additional classes to obtain their broker’s license.

    The large companies like KW, Coldwell, etc charge agents a hefty percentage of each commission until they pay in the maximum amount annually. In exchange, these companies offer fantastic training and resources. Flat fee brokerages only charge a small flat dollar amount on each transaction with no yearly cap. Being your own broker can still add up if you’re not doing a lot of transactions or have agents working under you because you still have to pay for insurance and whatever technology services you choose to use.

    0Reply
  • JoAnna Robinson
    Realtor · Atlanta, GA · Member since 2021 · 1 post · 0 votes
    5y

    @Abigail J Steinert I’m an agent here in GA. I could get my broker’s license (can sit after 3 years) , but I’m good with where I’m at and what I’m doing.🙂

    0Reply
  • Hersh ShahBusiness Member
    Realtor · Atlanta, GA · Member since 2016 · 117 posts · 78 votes
    5y

    @Abigail J Steinert I wouldn't recommend getting a license for the sole purpose of buying and selling your own flips.

    It may seem like agents don't do much, however there is a tremendous amount of time spent learning contracts, negotiating and actually being a fiduciary (for yourself or a client) that it likely won't be the best use of your time or energy.

    In addition to that, if you flipped the house you will have to disclose that you own the house and are acting as an agent. If you don't understand contracts, a seasoned buyer's agent will take full advantage of you (it is their job to represent their client, so you cant blame them).

    My advice would be to build great relationships with investor friendly agents that can bring you off market deals or start marketing yourself to find off market deals and have attorneys close on the transaction if saving money is a priority on the buy side. (Side note, you don't pay to buy with an agent so that's free too)

    On the list side, its probably a good idea to have a listing agent list your house that has done it several dozen times. If you plan to do volume, you can negotiate a commission rate you both feel comfortable with. There are tons of free and paid calculators our there that will let you build out a true flip project estimator which will go over selling costs to agents etc.

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  • Owen SchwaegerlePro Member
    Real Estate Broker · San Luis Obispo, CA · Member since 2016 · 180 posts · 69 votes
    5y

    @Abigail J Steinert Investor/Agent here. I actually am a broker associate. By being in real estate full time, I am able to come across off market deals before other people find out about them and have that “insider trading” type of advantage before listings “IPO”. You can have your license and still invest in real estate, though most agents don’t actually invest. It’s good you are looking into the options. There are so many ways to invest in real estate, and you are able to choose how you do it. Being an agent is also a great lifestyle, and I think being an investor/agent is super fun!

    2Reply
  • Lux Amator
    Real Estate Agent · Bloomington, IN · Member since 2020 · 15 posts · 2 votes
    5y

    @Ruth Lyons I’m curious. How are you getting leads as an agent?

    0Reply
  • Bill Goodland
    Rental Property Investor · Allentown PA, United States · Member since 2016 · 567 posts · 442 votes
    5y

    @Abigail J Steinert I got my license and currently work for a local broker. He runs a PM company to manage his and his families portfolio and took on a couple agents as well

    0Reply
  • Ruth Lyons
    Investor · Colorado Springs · Member since 2016 · 232 posts · 150 votes
    5y

    @Lux Amator

    I get leads from a number of sources. Thankfully, most of my leads are referrals now that I'm in my 4th year as an agent. I also do quite a bit of local advertising and farm a neighborhood with monthly mailings. 

    0Reply
  • Lux Amator
    Real Estate Agent · Bloomington, IN · Member since 2020 · 15 posts · 2 votes
    5y

    @Ruth Lyons thank you

    0Reply
  • Tracy Taylor
    Flipper/Rehabber · Longmont, CO · Member since 2021 · 8 posts · 4 votes
    5y

    @Abigail J Steiner

    Hi,

    In Colorado you cannot be independent until you have worked for two years under an employing brokerage.

    0Reply
  • Jaquetta T Ragland
    Real Estate Agent · Winston Salem, NC · Member since 2014 · 486 posts · 303 votes
    5y

    @Abigail J Steinert I work for a real estate company. In North Carolina, you have to work under someone for either 2 years if you’ve been doing it full time or 5 years if you’ve been part time, before you can start your own firm

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