Part 3: How to Become a Texas Realtor, and How Much it Will Cost

Note: This 7 part blog series is directed towards all those stay-at-home moms out there who always thought a career in real estate would have to wait until the kids were grown, and to the women Realtors out there struggling with finding the balance between their "ideal of success" versus what truly makes you happy. It's not a business model for everyone, but is something that has been on my heart to share for some time now. Take from it what you will, and know that everyone's journey in life and in real estate isn't and shouldn't be the same for it to be a SUCCESS...

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Part 3: How to Become a Texas Realtor, and How Much Will it Cost Me?

Before making the plunge into real estate, it's important to know exactly what kind of eduction and training you need, and HOW MUCH IT WILL COST YOU! Just like beginning ANY business, you need to know the fees involved. I'll break it down to the basics for the State of Texas requirements.

****It's important to reference the Texas Real Estate Commission website as rules can change.

1. You must be 18, a citizen of the US (or lawfully admitted alien) and a LEGAL RESIDENT OF TEXAS. If one of those statements does NOT apply to you, do not pass GO and do not collect $200.

2. Get Educated!

There are NUMEROUS places to recieve your real estate education. It's important to find one with a good reputation, a high percentage of applicants passing the state exam on the first try and one that offers class times that work with your schedule. Still don't know where to start? Call up a local brokerage and ask what schools they recommend.

My Choice for the DFW Area (and NO, I am not a paid spokesperson to write this) is Champions School of Real Estate. They have a great reputation and offer all sorts of options to fit into your schedule: web classes, correspondance classes, classroom settings, nights, weekends, fast tracks, you name it!

This is important for you moms, because we all know that attending a class 5 days a week from 8 to 5 can be down right impossible without paying a babysitter, or really taxing your new business partner!!

Education Requirements:

Before you go sending off a real estate license application, you must FIRST send evidence that you took the following classes:

• Principles of Real Estate core courses (60 hrs), Law of Agency (30 hrs), Law of Contracts (30 hrs), Additional real estate Core course (30 hours) and another 4 semester hours (60 classroom hrs) in core or related courses. This last tidbit includes college courses - see the website for a list of acceptable ones.

$$$$ Education Costs will vary depending on your provider. Estimate between $500-$1000 for all training, depending on how many courses you need (based on if you already have college credit to apply).

3. Send in the PROOF! Mail copies of certificates or transcripts of the above to TREC. When they give you the green light to move ahead, you'll recieve a letter will be sent to you letting you know you can now apply for a license. No letter, do not move forward

$$$$ Send in $30.00 with your transcripts.

4. Apply! Go online (to greatly speed up the application process) to apply and pay for the Inactive Salesperson License.

$$$$Pay $97.00 Original App Fee + $10.00 Recovery Trust Account fund (only pay once in app process)

5. Study and Pass the Test! Once you've been given a 2nd green light from TREC, saying they've recieved your application, you can then obtain a copy of the Candidate Information Brochure (CIB) which has the details of when and how and where to take your state exam. PSI is the company that administers this test and they have several locations where you can go and take the test.

Note: I would recommend taking the Exam Prep courses offered through the different real estate schools. It greatly increases your chances of passing the exam on your first go-round!

$$$$ PSI Exam Fee $61.00

6. You May Get Investigated - by filing a real estate application, you give authorization to be investigated by the commission. This may not happen until AFTER you've already passed the test, so if you've got a shady past it may come back to haunt you...

7....Including Checking Your Texas Guaranteed Student Loan Repayment History! Don't stop paying your student loans if you want to continue a career in real estate is the bottom line here.

8. Find a "Home" for your License! You cannot practice real estate without having a BROKER sponsor you - or "hold your license". You should interview several brokerages that you are considering working for. They are all DIFFERENT, so do your homework!! When you have decided upon your new brokerage, you can include a Salesperson Sponsorship Form with your application.

***ONCE A BROKER HOLDING AN ACTIVE LICENSE HAS MAILED A REQUEST TO TREC TO ACT AS YOUR SPONSOR, YOU MAY BEGIN TO ACT FOR THE BROKER AS AN AGENT! BUT NOT UNTIL THIS HAS BEEN DONE!! DON'T PRACTICE PRIOR TO LICENSURE!!

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How Much Does All of this Cost?

I've already included a few fees in the above section that pertain to just ACQUIRING your license. They are noted with a "$$$$".

Education Fees: varies, between $500-$1,000

Application Fees: $198

So before you even hold a license, you have spent between $700-$1200.00.

• ?? What if I don't have that much money? One idea is to throw a garage sale and use the proceeds towards your education. Have an expensive handbag that you don't use all that often? Hock it on Craigslist! After all, your goal is to make money in this career and you'll be buying a newer bag later on! The point is, if you want to do this you need to commit to finding the money to do so. Real estate has one of the lowest start up costs when looking at all the businesses you can get into.
  

YOU'RE LICENSED:

Once licensed, you will have the following quarterly and annual fees. There are also a number of other fees that will vary greatly from broker to broker. Finally, there are examples of common expenses that most agents use.

NAR, TAR & CCAR(local board) Annual Dues $406.00

MLS Quarterly Dues $106.75 per quarter

Annual Supra Key $168.00

Errors & Ommissions (E&O) Insurance - varies by broker. Some are annual fees, others are per transaction or monthly fees.

Brokerage Annual Fee - varies by broker. Some large franchises have an annual fee assessed to agents.

Brokerage Monthly Office Bill - varies greatly by broker - can include or not include charges for copies, chamber of commerce membership, office advertising/websites, showing service subscription fees, Realtor.com upgrade fees, voicemail services, desk fees, fax fees etc....

Continuing Education - varies by provider, but approx. $150 - $200

License Renewal Fee - $51.00

Common marketing expenses: business cards, signs ($50-$100 each), lockboxes ($25 for Combination boxes up to $100 for electronic boxes), website, or anything that you can dream up!

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On a personal note: Lastly, since we just covered expenses, I'd like to make an important note to those of you wanting to begin a career in real estate. This series is geared towards stay-at-home moms, but I'm sure many of you reading can apply the information to your own situation. Understand This: Real Estate is a COMMISSION ONLY profession. That means, you can spend all of this money and not make one penny. Seriously. Think about it.

If you are not in a situation where your household depends on your income, then you have an advantage. A rather large one I would add. But if you are a single parent and you are getting into real estate, OR if your family REQUIRES you to regularly bring home X dollars of income, then I would recommend doing 2 things FIRST:

1. Pay off ALL debt. Don't know how? Easy: Go to Dave Ramsey's book My Total Money Makeover. Follow it and enjoy financial peace.
2. Save up for 6 months of living expenses. It may be that long or longer (especially given your local real estate climate) before you earn an income.

In the next post in the series, I'll cover how to choose a brokerage - about commission splits, training programs and corporate culture! Stay tuned!

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In this Series I’ll cover:

• Introduction - Why you should begin a career in real estate before the age of 50. Why you should BREAK the stereotype!
  

• Forming your Dream Team – Partnering with another like-minded Mom creates the BASIS of this Business model

• The Basics – How to Become a Licensed Texas Realtor. What fees are involved.

• Choosing Your Brokerage – Training, Commission Splits & Corporate Culture, oh MY!
  

• Breaking Down the Workload – Time Blocking! This is how you get the part of "eating your cake too".

• Free and Inexpensive ways of Marketing Your Business – with an emphasis on Blogging & Social Networking

• Setting Yourself Up for Success in the Future – When the kids are older, and when your friends just start to think about a career in real estate...you're already on your way!