So you’ve decided to get your Louisiana real estate license. Maybe you’re embarking on a new career. Maybe you’re employed full time and want to get started investing in real estate and handling your own deals. Maybe you’re a stay-at-home parent and want the flexibility to make your own hours and go at your own pace. Whatever is driving your decision, this article will walk you through the process of getting your real estate license in Louisiana so you can hit the ground running.
Who’s in charge?
Most Louisiana agents have three “big brothers” always looking over their shoulders:
- The LREC. The governing authority for real estate agents in Louisiana is called the Louisiana Real Estate Commission (the “LREC”). The LREC handles applications for new real estate agents, monitors compliance with continuing education requirements, and penalizes and disciplines agents for violations of real estate laws and rules in Louisiana. Fear the LREC. Seriously.
- Brokers. There are two types of real estate agents in Louisiana: salespersons and brokers. Everyone starts out as a salesperson, and every salesperson has to be affiliated with a broker. Think of it like an apprenticeship: new agents in Louisiana “attach” to a broker, who is supposed to guide them through the regulatory, operational, and marketing steps involved in being an agent. After four years as a salesperson—and a bunch of extra courses—a salesperson can apply to become a broker.
- Realtor associations. The general public thinks of “agents” and “realtors” as the same thing. Technically, though, an agent can call herself a “realtor” only if she is a member of the National Realtor Association (through one or more of its local chapters). And one of the great prizes of being an agent—access to the multiple listing service—requires that you belong to a realtor association. So, though it’s technically not mandatory, almost all Louisiana agents are members of a realtor association, and most Louisiana brokers require it.
The local realtor association for the Greater New Orleans area is called the New Orleans Metropolitan Association of Realtors (“NOMAR”). It costs good money to belong to NOMAR, the MLS, and the “lockbox” services that NOMAR offers. You can learn more about the process for becoming a realtor with NOMAR by clicking here.
What do I have to do to get my real estate license in Louisiana, and how much does it cost?
Prerequisites for becoming a real estate agent in Louisiana are pretty straightforward. New agents must:
- be over 18 years old;
- have a high school diploma (or GED equivalent);
- complete 90 hours of pre-licensing education from a certified instructor in Louisiana;
- pass a criminal background check;
- pass standardized testing; and
- sign up with a Louisiana real estate broker and provide proof of errors and omissions insurance.
One huge “hack” you need to know about: the LREC will often accept college coursework or other education in lieu of some or most of the pre-licensing education requirement. For many, this could mean shaving off 40-60 hours of pre-licensing education requirements. To get credit for prior coursework, simply submit your school transcripts to the LREC with a letter requesting credit. Here is the LREC’s contact information:
- Phone: (225) 925-1923
- Email: email@example.com
After you get credit lined up for your prior coursework, submit the following paperwork (available online) to the LREC to get your Louisiana real estate license:
- Salesperson License Application “Part A”: With this form, you tell the LREC all about yourself and authorize a background check. Technically, you can submit this “Part A” form before or after you complete your pre-licensing education, but you have to submit it before you take the Louisiana real estate exam.
- Salesperson License Application “Part B”: This is the “Sponsorship Affidavit” form that your new real estate broker needs to fill out. You can submit this form before or after you complete your pre-licensing education and before or after you take the Louisiana real estate exam.
Next, you will need to take the Louisiana real estate exam. A company called PSI administers the real estate exam in Louisiana. To schedule the exam, go online to PSI’s site, create an account, and schedule it (for a fee).
Speaking of fees, you should know that it can be somewhat of an investment to get your real estate license in Louisiana and pay for everything you need to get started. Here are the typical fees you will be facing as a new real estate agent in the New Orleans area:
|1||LREC Application:||$90 (one-time fee)|
|2||Initial licensing fee:||$45 (one-time fee)|
|3||Mandatory E&O Insurance:||$190 (annual fee)|
|4||Realtor Association:||$484 (combined annual fees)|
|5||MLS Fee:||$84 (quarterly fee)|
|6||Total First-Year Fees:||$893|
Choosing a Louisiana real estate broker and brokerage
As a new real estate agent in Louisiana, you have to affiliate with a licensed broker. Although you will report to your broker—and your broker will be responsible for monitoring what you do—the broker is not your “boss.” Except in very rare circumstances, Louisiana real estate agents are independent contractors—not employees—of brokers. This means that you have more flexibility in how you run your business and what hours you work. But it also means that you don’t get a regular paycheck: real estate agents “eat what they kill” and earn money only when they do deals.
In return for the support and guidance your broker is (supposed) to provide, you split a portion of the commission you earn on any deal with your broker. The commission split with Louisiana real estate brokerages can vary substantially—from 25% or less to as much as 60%. In other words, if you do a deal for a $10,000 commission, your broker might keep somewhere between $2,500 to $6,000 of that commission.
Beware, too, that many Louisiana real estate brokerages charge their agents fees in addition to commission splits:
- many Louisiana real estate brokerages charge monthly fees (supposedly for things like email accounts, your own “personal” web page, and other “cutting edge” technology);
- many Louisiana real estate brokerages charge transaction fees for things like “national dues,” general marketing services, and local “royalty” fees that effectively increase the commission split you pay as an agent; and
- many Louisiana real estate brokerages pass the entire cost of basic support services like graphic design work and electronic fax service onto their agents.
Like an airline that offers “cheap” flights but then charges passengers for soft drinks, carry-ons, and “upgrades” for things included on other flights, real estate brokerages can be pretty slick about hiding fees in addition to the commission splits they advertise. To make sure you’re comparing “apples to apples” when choosing a real estate brokerage in Louisiana, you need to consider the hidden costs of doing business with that brokerage.
Of course, commission splits aren’t everything. If the option were either to get zero support for a lower commission split or full-service support for a higher split, then it would be a no-brainer to cough up more cash to your brokerage. But, unfortunately, agents often end up worse off on both accounts: attracted by “big brokerage” marketing, they sign up with a national brokerage, agree to a higher commission split (and ridiculous hidden fees), and end up getting little additional support than a smaller shop would offer.
At Athena, we believe that our agents shouldn’t have to choose between coughing up half (or more) of their commission splits to their brokerage or getting little or no support in return for a lower split. We view our agents as our partners and firmly believe that your success will mean our success. By pumping our resources into our agents—and allowing them to keep more of their own commissions—our model has allowed new agents to quickly rise as stars. And when our agents win, we win. As the old saying goes, “a rising tide lifts all boats.”
We are also transparent about our commission split and don’t knick our agents for hidden fees: you keep 75% of your commissions—every time, on every deal. No annual “dues,” marketing “assessments,” or monthly “subscriptions.” No hidden fees. We truly have one of the best commission splits of real estate brokerages in the New Orleans area and Louisiana at large.
To learn more about Athena—and see if our brokerage would be a good fit as you embark on your new career in real estate—check out our web site, give us a call, or send us an email. We’d love to talk with you.