HATE READING? JUMP TO ATTORNEY STEVE'S PODCAST FOR TOP TIPS FOR ARIZONA REAL ESTATE STARTUP
Ready to launch your Arizona Real Estate business?
So you are interested in starting a real estate company in Arizona? The process can seem easy, but when you drill down to it you may not find it as easy as you think. As a person who has completed both the California and Arizona real estate process (I have earned broker licenses in addition to law licenses in each state) I can attest that it is not always a cake walk to try to get a new real estate company licensed in the State of Arizona.
ATTORNEY STEVE'S TOP TIPS TO HELP YOU GET YOUR AZ REAL ESTATE COMPANY STARTED.
Here is a general overview of the top things you need to do to get your Arizona real estate brokerage off the ground in Arizona. This may not be all the stpes, but includes the main points you need to be aware of.
1. 90 hours of CLASSROOM education. In Arizona, you have to actually sit in a class for 90 hours to get clearance to take the state and federal examination. The school I like, and have used twice myself is the Arizona School of Real Estate and Business. I like their format and their instructors are very knowledgeable.
2. Pass the State and Federal real estate examinations. You can set this up with Pearson Vue. Call them in advance because they have some special requirements that you will need to comply with to take the Arizona real estate exam.
3. Make sure you get started on your fingerprints early in the process. This can take about 3-5 weeks to get your "fingerprint clearance card" so do not waste time getting started on this. Here is a FAQ sheet on AZ real estate fingerprinting.
4. Brokers may need to take the broker management clinic (usually 9 hours) and possibly a course on contract writing.
5. Once the school is completed, and the state and federal test is finished, you need to submit all your materials (the entire package) online to AZRE.gov. You will be provided with a list of all the documents you must submit. Make sure everything is 100% complete (take you time and check things off as you go). If you mess up, you do not pass go, and have to basically start all over.
6. The above steps will get you set up as a licensee in the Arizona Real Estate database. If you want to submit a corporation there are more steps involved. First of those is to submit the LI-213 name reservation form (basically having the DRE approve your name chaoice or DBA choice). Make sure you review the LI-213 form instructions because there are some company names (our podcast link above gives you most of the names) that the AZDRE will not approve (for example companies with the name ASSETS, TEAM, GROUP, FIDUCIARY, etc. Choosing these names will only cause further delay and a demial of your business name.
7. Once the LI-213 name is approved, then, and ONLY THEN, do you go setup your Arizona corporation (most people choose an LLC which is not an available option in California interestingly enough) with the Arizona Corproations Commission. I suggest using the expedited service and paying the expedited fee. With that, you can expect about a one work turnround time if you submitted everything properly, named your agent for service of process, etc. The articles also need to be published in a newspaper of general circulation and an "affidavit of publishing" submitted to the A.C.C.
8. Get your employer identification numnber (of course you are going to make lots of money in your real estate business and you need to pay your federal taxes). You can get your federal EIN number online instantly.
9. Once the LLC or other business entity is approved with the A.C.C. you need to submit form LI-212 (applying for emplying broker) and the LI-214/244 disclosure form (disclosing all ciriminal convictions and other disciplinary history. Keep in mind, the best tip is to DISCLOSE EVERYTHING. THEY WILL FIND IT. IF YOU DON'T DISCLOSE CRIMINAL HISTORY OR THE OTHER ITEMS THEY REQUEST YOU WILL MOST LIKELY NOT BE ABLE TO GET YOUR REAL ESTATE LICENSE. At this stage there is also specific corporate information they will want (for example, the names of all members or managers of the LLC, a corporate resolution approving the designated broker, etc.). Again, make a checklist as you go, and check it off once you have collected the items they want. Again, errors mean you get "back in line" in do it again. This is also submitted online.
Here is a link to the LI-212 instructions.
ATTORNEY STEVE TIP: Note, the Arizona Department of Real Estate prefers to work online, but there is a phone number you will find on one of the forms. By amking sure you submit everything online through the message center you can start an email dialogue with the Department.
10. Once everything is submitted and approved, you need to consider other issues that often arise such as (a) branch offices (b) independent contractor agreemerns, (c) agent policy and procedure manuals (including social media policies which is becoming a hot issue) and (d) documenting policies and procedures to carry out the broker duty of supervision.
We offer Arizona real estate startup packages to help the broker that does not want to deal with all the "paperwork" and wants to have a business and real estate law firm assist them.
For more information, contact the author of this blog, Attorney Steve at (877) 276-5084.
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