Yearly cost of a license?

Question

I don't know why I can't find this answer.  I would like to rehab houses.  I live in Minnesota and I would like to get a license to have MLS access and for selling my own properties that I rehabbed.

I am wondering what the yearly costs of this would be?

I thought I read on J scotts blog that his wife paid 300 per month which seems like a lot. I don't know if that was including broker commissions on the sale of a house.

Ned Carey · Answer

There are a lot of fees to be an agent

• National Realtor association fees
• State Realtor association fees
• Local Realtor association fees
• State licensing fees
• Fees to associate with a broker
• E&O insurance fees
• Multiple list service fees
• Showing service fees
• Lockbox service fees
• Etc

These will vary from area to area and broker to broker. Some may not be required if your only goal is MLS access. My point is there are a lot of fees and cumulatively they add up. I gave up my license to save money. I am now an assistant to my partner and only pay MLS fees of about $90 a quarter vs several thousand to be an agent.  - Ned

Ryan Pearson · Answer

I am new to the Twin Cities area and have been doing some research on BiggerPockets and saw your post from a year or two back about costs to maintain realtor status.   I was hoping you could answer a question I had.  You mentioned ~$520/year to maintain it (which i assume are the MAAR, MNAR, and NAR dues).  Do you also have to pay ~$110/quarter for MLS access, or is that provided to you through Bridge Realty?

Thanks for the insight!

Alan Mackenthun · Answer

I'm a local investor in the twin cities and have my license pretty much just to support my own purchases and occational sales.  It's not cheap and it requires some effort to keep your license, but I like it.  $520/year for realtor membership/dues paid quarterly. Something like $400/yr for the license. About $10/month for an eKey.  I held out on this for a while, but some people (@$%!) put eKeys even on low end bank owned properties these days.  You will also have to purchase and complete continuing education each year to keep active.  I work with Bridge Realty headquartered in Bloomington, MN.  They charge nothing to carry my license.  They do get $495/closing.  That's the best deal I could find in town.

One other thing to note, is that if you're going to be rehabbing houses in MN, you may also be required to get your builder's or remodler's license.

J Scott · Answer

Every state and every broker are going to be different.  For example, I mentioned my wife paying $300/month to her broker.  That's so she only has to pay $40 to the broker for each transaction.  She could also pay $60/month to the broker, but would then have to pay $300 per transaction.  Because we've historically done a lot of transactions, it's been cheaper to pay more per month and less per transaction.  With other brokers, she could be paying $1000 per transaction, or even 20/30/40% of her commission to the broker.  There is no standard -- generally the bigger the brand of the broker, the more you'll pay.

Then there are the realtor fees.  In Georgia, you're not required to be a member of any realtor association in order to get access to the MLS or to hang your license with a broker.  But, in many other states, you have to be a member of NAR and a local association in order to get access to the MLS; also, many brokers require it.  These association dues can range from $200-1000 per year.

Then there are MLS fees, E&O insurance costs, desk fees, lockboxes, electronic keys, continuing education, etc.  Some states/brokers/agents will require these fees, others won't.

So, there really isn't any standard.  In Georgia, I could keep my license (and MLS access) for under $300/year if I don't do any transactions.  In Maryland, it would be tough to keep my license for less than $1000/year if I didn't do any transactions.  There are probably other states where you would need to pay $1500+ to keep your license.

But, the one consistent thing I've found is that, if you're doing at least 1 deal per year, you should be able to pay all your licensing costs.  Even one $50K deal with a 3% commission will pay $1500 -- if you have a low-cost broker, I would imagine that $1500 should cover pretty much everything you'll spend in a year in most states.

Karen Margrave · Answer

First, you will need to get your real estate license. Do a search of your state Dept of Real Estate and find out what is required. There's usually classes you can do online to prepare for the state test. After getting your license, you will need to have your license under a Broker. Then, you will need to join the local Board of Realtors/MLS. It's not required that you join NAR. You may not even have to joint the state Association of Realtors, so double check.

Often Brokers take 50% of your commission, until you reach a certain dollar amount of escrows closed. Now.. some Brokers actually provide training for new agents, provide signs, advertising, etc. Make sure you know exactly what the Broker offers to you, a new agent, and what you are expected to pay for. Compare Brokers. Though you may get a smaller split, sometimes it pays to join an office that has a nationally known named, etc. Do your homework. Talk to other agents. Watch ads, signs, etc. and make note of the most active offices!

Shane Johnson · Answer

After reading J Scotts blog, and doing my own calculations, this is how I see it. 
	
	Say it only costs you $300 a month in fees. That's $3600 a year. Most listing/buying agent commissions are 2.4-2.5%. Most brokers to my knowledge take half of that. (realtors please chime in, especially in the MN/WI area)
	
	So based on that, at .0125 (1.25% comm) You would have to sell $288,000 worth of homes, to offset that $3600 cost. 
	
	If and when I get to a point where I am flipping 2-3 properties a year, and my friends and family ask me to help them buy/sell, then I will probably get my license. Until then, its not worth it for me. 
	
	Right now besides my own off-market research and driving for dollars, I have a great agent who sends kickouts to my email. 
	
	Find a good agent locally that will work with you, that will do this. For example, I have filters set for specific school districts only, under 150k, single family only, and then also have one set up for multis, and solds (so i can watch my comps). 
	
	They may even let you see the full agent views of the listing, but I am not sure if that's illegal or frowned upon among realtors. It never shows that much more anyway, because listing agents are lazy with lender owned listings. On the "solds" you can see the financing info after purchase though, which is fun to know which type of offer/buyer got the deal done.

JOAN DICKIE · Answer

Here is a link to costs:

http://mplsrealtor.com/become_dues.aspx

JOAN DICKIE · Answer

if you want access to the MLS, you will need to pay a yearly fee to the National Association of Realtors and the Minnesota Association of Realtors. Then you will have to join a local Realtors association like the Minneapolis Association of Realtors or St. Paul Area Association of Realtors.  I haven't paid dues to them for a couple of years, but it was about 650-700 for all three together.  Then you pay for the MLS itself which used to be about 35 a month.

Then there are the fees that your broker will charge you monthly.  $300/month isn't bad at all if the broker isn't taking a cut of your commission.

Yearly cost of a license?

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