Getting your real estate license vs. mortgage agent license
So you want to be a Real Estate Salesperson, eh? (as of 2022)
Real Estate Investment: $7,545 (Broker $9,105) VS. Mortgage Broker/Agent Investment: $1,600
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 (registration in Ontario) 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 $7,500 in the process of becoming licensed in Ontario, including taking the course through Humber College, compared to just over $1,600 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 (registered Real Estate Salesperson in Ontario).
What does it take to become a registered Real Estate Salesperson in Ontario
Total Investment: $7,745 (plus brokerage charges, desk fees, advertising, franchise fees, etc)
Time: The licensing process takes from 3 to 4.5 years to complete
Educational Prerequisites
To qualify for admission into the Real Estate Salesperson Program, an applicant must hold a Canadian secondary school diploma or GED certificate, or an acceptable equivalent credential.
Applicants that do not have a Canadian secondary school diploma or GED Certificate may provide acceptable equivalency credentials.
The Salesperson Registration Education Program
Pre-Registration Phase
Investment: $3,590
Time: Up to 24 months
- Course 1: Real Estate Essentials – eLearning $525.00
- Exam 1: Invigilated Theory Exam $100.00
- Course 2: Residential Real Estate Transactions – eLearning $595.00
- Exam 2: Invigilated Theory Exam $100.00
- Course 3: Additional Residential Real Estate Transactions – eLearning $315.00
- Exam 3: Invigilated Theory Exam $100.00
- Simulation Session 1: Residential Real Estate Transactions $750.00
- Course 4: Commercial Real Estate Transactions – eLearning $315.00
- Exam 4: Invigilated Theory Exam $100.00
- Simulation Session 2: Commercial Real Estate Transactions $600.00
- Course 5: Getting Started eLearning $90.00
- Pre-Registration Phase Cost $3,590.00
Post-Registration Phase
Investment: $570
- Compliance – eLearning $300.00
- Elective Courses (two electives @ $135 each) $270.00
- Post-Registration Phase Cost $570.00
Real Estate Broker Program Fees
Investment: $1,560
- Broker Qualifying Exam $110
- Course 1: Planning and Start-Up $250
- Course 2: Business Management $250
- Course 3: Human Resources $250
- Course 4: Ongoing Oversight $250
- Wrap-Up Session: Bringing it All Together $340
- Broker Final Exam $110
Additional Costs and fees
Investment: $3,385
- $400 – RECO E & O Insurance fee (annually)
- $390 – RECO licensing fee (every 2 years)
- $840 – CREA membership (one-time fee)
- $475 – 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).
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.
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!
Mortgage Broker/Agent
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 16,000 mortgage brokers/agents in Ontario (as of March, 2021), 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.
In addition, you’re paid commission and your brokerage will take a split of that, ranging anywhere from 50/50 for the first several deals until you are trained, up to 95/5 (95% for you)
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: $1,668
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 Regulatory Authority, FSRA (formerly the Financial Services Commission of Ontario (FSCO))
Educational Prerequisites
None – anyone can take the REMIC Mortgage Agent Course (RMAC). This is the course required to get licensed.
The REMIC Mortgage Agent Course (RMAC)
Phase 1
Investment: $338
Time: One week to 6 months
$338 – $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.
Phase 2
Investment: $1,300
Time: 2 weeks to one month
$300 – $400 – Brokerage E & O insurance fee (annually)
$941 – FSRA licensing fee (this is pro-rated- see below)
FSRA licensing fee
- Licenses come up for renewal every year (previously every two years), with the next renewal on April 1st. To renew, the fee is $841. To apply for a new license the fee is $941 for a full year, prorated if applying after April 1st, like this: $100 + (# of months to March 31, 2020 x $70.08).[1]
- For example, if you applied for a license on April 1, 2020 then you would pay an application fee of $100 plus $841 (12 months to April 1, 2021 x $70.08) = $100 + $841 = $941. If you were already a mortgage agent you wouldn’t have to pay the application fee, so renewing the license would cost $841.[1] FSRA, https://www.fsrao.ca/sites/default/files/2019-06/fee-rule-2019-001-en.pdf
Conclusion
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.
P.S.
You can have both licenses. Something else to consider…
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