Getting your real estate license vs. mortgage agent license
Real Estate Salesperson
So you want to be a Real Estate Salesperson, eh?
Real estate sales can be a fantastically rewarding career…but you need to go in with your eyes wide open! Like most things in life, successful people make it look easy. But what you see are the results of their efforts, and their money. They’ve had to overcome fierce competition: there are over 100,000 Real Estate Salespeople with their real estate license in Canada or nearly 1 for every 266 adult Canadians.
And they’ve had to invest in their career. Unlike other real estate careers, such as mortgage brokering, real estate can be expensive. It will cost a new Real Estate Salesperson over $6,000 in the process of becoming licensed, compared to just over $1,000 for a mortgage broker.
That just gets you in the door. Now you have to pay for marketing, your car, and all of the other costs that will run up your line of credit until you start making some money.
And once you start earning you’ll likely be sharing that commission with your brokerage (and CRA, of course). But, having said all that, it’s a fabulous career if you’ve got the time and money it takes to make it. So here’s a breakdown of the time and the money you’ll have to invest to become a licensed Real Estate Salesperson.
What does it take to become Real Estate Salesperson in Ontario
Total Investment: $6,090 (plus brokerage charges, desk fees, advertising, franchise fees, etc)
Time: The licensing process takes from 3 to 4.5 years to complete
To apply to The Salesperson Registration Education Program, you must:
- have an Ontario Secondary School Diploma or Equivalent, or
- be at least 18 years old and pass the OREA Real Estate College Admissions Test (passing mark is 50 per cent)
Ontario Secondary School Diploma
You must submit one copy of the following items to the Admissions Department of the OREA Real Estate College:
- Ontario Secondary School Graduation Diploma, or
- Ontario Secondary School Transcript that clearly states that an Ontario Secondary School Diploma was awarded
The Salesperson Registration Education Program
Time: Up to 18 months (can be done in as little as 4 months if you’re willing to travel)
The Program begins with the Pre-registration Segment which must be completed within 18 months of the start date of the first course.
$500 – Real Estate as a Professional Career – 40 hours
$520 – Land, Structures and Real Estate Trading – 60 hours
$400 – The Real Estate Transaction – General – 40 hours
Time: Up to 12 months
$400 – RECO E & O Insurance fee (annually)
$350 – RECO licensing fee (every 2 years)
$840 – OREA/CREA membership (one-time fee)
$475 – OREA/CREA Fees (annually)
$460 – TREB Registration (one-time fee)
$860 – TREB Membership (annually)
Following completion of the Pre-registration Segment, students have up to 12 months to obtain employment with a brokerage and obtain Registration as a Salesperson with the Real Estate Council of Ontario (RECO). Registration Requirements:
To become registered as a Salesperson with the Real Estate Council of Ontario (RECO), you must:
- be a resident of Canada
- be at least 18 years of age
- complete the Pre-registration Segment courses within 18 months of the start date of the first course (Real Estate as a Professional Career)
- obtain employment with a registered brokerage and make application for registration with RECO within 12 months of completing the Pre-registration Segment
- apply for registration within one year of successfully completing your last Pre-registration course (The Real Estate Transaction-General and either The Residential Real Estate Transaction or The Commercial Real Estate Transaction)
- complete and submit the forms approved by the Registrar under REBBA 2002, accompanied by the relevant fee
You may begin trading in real estate upon obtaining Salesperson registration with RECO.
Total investment: $1,360
Time: 24 months
The final part of the Program is the Articling Segment, a mandatory 24-month period following the student’s registration as a Salesperson.
$480 – Real Property Law – 40 hours
$480 – Principles of Appraisal – 40 hours
$480 – Principles of Mortgage Financing – 40 hours
$480 – Principles of Property Management – 40 hours
$480 – Real Estate Investment Analysis – 40 hours
Keep in mind that there are many different brokerage models in the market. Commissions range from 60% to 100% for agents, depending on many circumstances. Understand that a brokerage won’t pay a high commission for a new agent. Some charge desk fees up to $1,500 per month, while others charge much less. Some provide a considerable amount of free training, while others make you pay for it.
At the end of the day you, like consumers, have choice. You can decide which brokerage to join (as long as they hire you!) and what you want to get out of your affiliation with that brokerage. You also get to decide how hard you want to work at your new career. Remember that old saying, “garbage in, garbage out” applies to the self-employed the most!
So you want to be a mortgage broker, eh?
Mortgage brokering can be a wonderful career choice, as long as you know what you’re getting in to. With under 11,000 mortgage brokers/agents in Ontario, there is much less competition than for real estate sales. However, while nearly 90% of consumers use Real Estate Salespersons to buy and sell a home, about 30% use mortgage brokers/agents to obtain a mortgage. Lots of room for growth, or consumers don’t need mortgage brokers/agents as often as they need Real Estate Salespersons; depends on your outlook.
You are considered to be an independent contractor as a mortgage broker/agent (in the vast majority of situations; some brokerages will hire a broker/agent on salary or as an employee but this is rare). That means you have all of the other expenses involved in running your own business, such as marketing, your car and all of the other costs that, just like in real estate, can run up your line of credit before you start making some money.
And once you start earning you’ll likely be sharing that commission with your brokerage (and CRA, of course). But, having said all that, it’s a fabulous career if you’ve got the time and money it takes to make it. So here’s a breakdown of the time and the money you’ll have to invest to become a licensed mortgage broker/agent.
What does it take to become a mortgage broker/agent in Ontario?
Total Investment: $1,498
Time: One week up to 6 months (can be done in as little as one week or up to 6 months, in class or online)
In Ontario, to become a licensed mortgage broker/agent you must:
- Pass the mortgage agent course – click here for information on the course
- Get hired by a licensed mortgage brokerage – click here for information on getting hired
- Get licensed by the regulator, the Financial Services Commission of Ontario (FSCO)
None – anyone can take the REMIC Mortgage Agent Course (RMAC). This is the course required to get licensed.
The REMIC Mortgage Agent Course (RMAC)
Time: One week to 6 months
$298 – $345 – REMIC Mortgage Agent Course (RMAC) – 47 hours
The Real Estate and Mortgage Institute of Canada Inc. (REMIC) is a certified educational institution by Human Resources and Skills Development Canada (HRSDC). As such REMIC’s courses are tax free.
In addition REMIC offers a free job placement assistance program designed to assist graduates in obtaining employment with a licensed mortgage brokerage in Ontario.
Time: 2 weeks to one month
$300 – $400 – Brokerage E & O insurance fee (annually)
$800 – FSCO licensing fee (this is pro-rated- see below)
FSCO licensing fee
Licenses come up for renewal every two years, with the next renewal on March 31, 2016 (the last one was March 31, 2014). The fee is calculated like this: $100 + (# of months to March 31, 2016 x $30).
For example, if you applied for a license on December 1, 2014 then you would pay an application fee of $100 plus (16 months to March 1, 2016 x $30) = $100 + $480 = $580
In total your new career should cost you approximately $1,500 to get started. Your income potential is unlimited, making this a great investment.
In conclusion, both careers can be as rewarding as you make them. Selling real estate and brokering mortgages are well accepted careers in Ontario, with the potential to earn a significant income. If you’re looking for a career that you can begin quickly and with only a small investment, the nod has to go to mortgage brokering. Of course, I’m biased because I’m a mortgage broker.
Ultimately, the choice is yours! I hope this information helps you make an informed decision.
You can have both licenses. Something else to consider…