Becoming an independent real estate agent in Colorado

Aurora, CO · Member since 2017 · 9 posts · 3 votes

My wife is looking to get her real estate license in Colorado. One requirement for licenses in Colorado is that you have to work under a broker or "hang your card" in a brokers office for at least 2 years after receiving your license. This may or may not including paying fees to the broker, 50/50 commission splits, etc.

Does any one know how, or what can be done in order to get around this? She would like to be an independent broker and just work our own deals. Currently she is working full time and has no intention of making being a real estate agent her career.

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Mindy JensenPro Member

BiggerPockets Money Podcast Host · Longmont, CO · Member since 2014 · 7k+ posts · 10k+ votes

@Devin Martinez , I believe if she is an attorney, she does not have to hang her license under another agent. Possibly if she has already been an independent agent in another state she could skip this requirement.

If she is neither, there is no way around it.

There are lots of agencies that charge you a nominal fee per transaction in the Denver area. You WANT a broker to bounce ideas off of in the beginning. The test only teaches you how to pass the test. It conveys almost zero actual real estate knowledge.

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Alex Deacon
Investor · Pittsburgh, PA · Member since 2015 · 1k+ posts · 1k+ votes
9y
@Devin Martinez Devin I am a Broker in PA and have been for 22 years. I would suggest talking with some smaller mom and pop agencies. She doesn't need the big real estate company name so why pay the big real estate company fees. The fees will be a lot less and they will have more latitude with your wife. Call around to three or four companies and ask these questions that you have posed in the forum. In PA you just have to get Broker to represent you until you get your license but then you can go to any company once you are licensed.
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Christopher Giannino
Real Estate Agent · Hamilton, NJ · Member since 2013 · 464 posts · 311 votes
9y
@Devin Martinez I'm not from your area but it seems like CO is similar to NJ. She will have to work under a broker for two years and than go on to pass her brokers exam before she can "practice on her own." As @Alex Deacon suggested, call around to some of the smaller brokerages in the area to find out if they are investor friendly and only charge a flat fee per transaction.
Although I understand she has no intentions of making this a career, typically (from what I hear at least) a flat fee company will not give you any education or direction. Just know that if you go that route, you might be completely on your own to figure everything out when a problematic transaction occurs.
Best of luck and hopefully you find this helpful!
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Dan MackinBusiness Member
Real Estate Agent · Erie, CO · Member since 2014 · 1k+ posts · 512 votes
9y
There are brokerages that can work better for your wife. Trying to skirt the requirement doesn't work and in most cases thinking you should be independent from the beginning isn't a great way to start. The state does this in the hopes that by the time someone is independent they have some experience and aren't a literal newbie. Most places will require a mentor on the first few, but that's just because they are liable for your failings. That's where the cost usually goes. I used to think I wanted to be on my own, but for my minor fee I find it very helpful to have that person(s) to call. No deal is ever the same.
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Christopher Giannino
Real Estate Agent · Hamilton, NJ · Member since 2013 · 464 posts · 311 votes
9y
@Dan Mackin couldn't agree with you more!
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Mindy JensenPro Member
BiggerPockets Money Podcast Host · Longmont, CO · Member since 2014 · 7k+ posts · 10k+ votes
9y
@Devin Martinez , I believe if she is an attorney, she does not have to hang her license under another agent. Possibly if she has already been an independent agent in another state she could skip this requirement.
If she is neither, there is no way around it.
There are lots of agencies that charge you a nominal fee per transaction in the Denver area. You WANT a broker to bounce ideas off of in the beginning. The test only teaches you how to pass the test. It conveys almost zero actual real estate knowledge.
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Devin Martinez
OP
Aurora, CO · Member since 2017 · 9 posts · 3 votes
9y
Thank you all for your responses. @Dan Mackin - so does this seem to be difficult to hold a full time job while pursuing a RE license? Or is it as simple as becoming a part of a brokerage (that is willing to take a newbie) to start the two year clock? Her purpose for obtaining a RE license if for the obvious investor benefits (ie. MLS access, purchase/sale commissions).
If I understand correctly, she will not be able to obtain her RE license until she works two years under a broker. Is this correct?
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Tanya Delahoz
Residential Real Estate Broker · Breckenridge, CO · Member since 2017 · 19 posts · 10 votes
9y
She can get her broker license as soon as she completes the schooling and passes the test. She can go out on her own after 2 years, takes an Employing Broker Class and then pays the necessary licensing fees.
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Kevin Grinstead
Realtor · Denver, CO · Member since 2016 · 499 posts · 129 votes
9y
Hi Devin,
You can take the classes online and it is quick. The requirement is 168 hours of education and it takes about that much time for the process.
One thing is, it is not cheap to be a agent. Even at smaller firm you will need to pay fees. Most are required to pay for the MLS service. You have insurance costs and the licensing fee.
How many deals are you going to be doing? If your wifes goal is to be an investor or a flipper you will want to see if doing it yourself is really worth the hassle.
It is always good to have a broker back you up so you do mot make any major mistakes and if you are only going to be doing a few deals, it might not be worth it to go through the process.
An expert real estate agent can help you in many ways and if they are good at analyzing deals and reviewing the market they can find you opportunities you may not have been able to find.
The agent is there to protect the buyer and seller from challenges in the deal and should be the person to help you get the best deal.
Most real estate agents do less than 5 deals a year accoeding to the National association of Realtors. From my experience, if you are doing less than 3 deals a year the cost and hassles are probably not worth it.
I would suggest finding an agent that is investor friendly and will help you get deals going, find deals and will charge you less if you just need someone to do the paperwork. And in Colorado, usually the seller pays both agents so if you are making a purchase, the other party will pay for you to have a professional working for you.
Most agents will also make a deal with you if you're looking to buy and sell or sell and buy to keep you satisfied with their service.
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Jean BolgerPro Member
Aurora, CO · Member since 2012 · 2k+ posts · 1k+ votes
9y
Part of your confusion is due to the way things are worded here in Colorado. We have two levels of licensing. The initial level is that of "associate broker". In most states those with that level of licensing would be called a real estate agent or real estate salesperson.
The next level of licensing is a brokerage license. That allows you to be a "managing broker" "employing broker" or "independent broker".
As an associate broker you do have to work under an employing broker for 2 years before taking the exam for the next level of licensing. BTW there's a ton of record keeping and liability that go with being an independent broker. IMO any financial savings for the amount of deals you're looking at would not be anywhere near the hassle.
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Chris LopezPro Member
Real Estate Agent · Denver, CO · Member since 2015 · 1k+ posts · 858 votes
9y
@Devin Martinez
The other posters have shared great information with you. My couple of cents:
I have a RE license in California, which was a breeze to get. It was a salesperson (entry level.) I just finished all my requirements for CO. CO is a lot tougher than California. Definitely weigh the pros and cons of how many deals you're doing vs the headache, expense, and added liability of being a broker.
You can still find all the properties on the MLS, wether you have your license or not. Often as you build a relationship or do repeat business, brokers will drop their commission rate. If you have a broker who's doing deals at 1% for you, and you two work well together.. is that worth getting your own license?
Whatever you do, do NOT use this company https://www.realestateexpress.com The material is horrible. So bad, that I stopped using it and found a different company. I went with http://www.vaned.com and it was great.
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Matt M.
Realtor · Denver, CO · Member since 2013 · 2k+ posts · 1k+ votes
9y
Right now, you can't get around the 2 years under an employing broker requirement. IIRC the licensing to become an employing broker is about to get more difficult, and it should.
There is too much at stake in these transactions, and trying to take shortcuts will come back to bite.
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Bill S.Pro Member
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Rental Property Investor · Denver, CO · Member since 2013 · 4k+ posts · 2k+ votes
9y
@Devin Martinez it's not free to be a broker. There are many costs associated with being a broker whether you are independent or not. Just getting MLS access costs about $500 per year.
You can likely find a brokerage that will waive most of their commission splits for your own deals. At the same time most have fees and costs to cover when you hang your license with them. It's not insignificant but just doing one deal a year usually covers those costs. I disagree that you should use an agent if you do fewer than three deals a year. Just one per year or every other year covers it.
Actually the biggest investment is time for me. There is the continuing education and the license requirements. You have to invest time to stay current.
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Devin Martinez
OP
Aurora, CO · Member since 2017 · 9 posts · 3 votes
9y
Thank you all for your input! @Bill S. - I parallel your thinking in that one single deal makes the all the cost associated with being a broker negligible.
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Vanessa Homuth
Investor · Denver, CO · Member since 2017 · 13 posts · 2 votes
9y
Devin Martinez did you end up finding a place for your wife to hang her license or a way to get around the requirement? I agree there are benefits that make it worth the hassle.
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