The Texas Real Estate Commission (TREC) will issue a broker license to a business entity as long as the entity has a designated broker.  A designated broker is a person with an active Texas real estate broker license.  Although the type of business entity can be a corporation, limited liability company (LLC), or partnership, we are only sponsoring LLCs because we feel like that structure is easiest to set up and maintain.  Also, as you can see on the application, if the business is a corporation, the broker would have to be the president, vice-president, secretary, or treasurer and if the business is a partnership, the broker would have to be a general partner.  For our LLC sponsorship plan, our broker, Kari King, will be the designated broker for your LLC.

Since the broker will not be an owner in your LLC, TREC requires that the LLC have E&O insurance with $1 million per occurrence coverage.  If you’ve been working with one of the “big brand” and/or traditional brokerages that charge you E&O per transaction, then this probably scares you because you’re thinking it’s going to be expensive.  However, when you’re starting out, it’s relatively inexpensive.  It will increase after the first year as your revenue and number of agents increases and if you don’t lock in your rate for multiple years.

At least one agent working with your LLC (or you if you’re the only agent) must complete the six-hour Broker Responsibility course and be registered with TREC as the delegated supervisor (also referred to “designated supervisor”).  The reason for this is because the designated broker will not be involved in the day to day running of your business and so an experienced agent will help ensure compliance with the Real Estate License Act and Commission Rules.  This person will also issue Commission Disbursement Authorizations (CDAs) for your company.  If you just received your real estate sales license and have no real-world experience, we won’t sponsor your LLC unless you have another experienced agent working with you that will be your delegated supervisor.  We feel this would be setting you up for failure if you don’t have experience as well as possibly having legal ramifications if things aren’t handled properly.

I’ve never heard of this, are you sure it’s legal?
Of course, see this TREC article as well as their application.

Why would I want to do LLC sponsorship?
LLC sponsorship gives you the ability to own and operate your own real estate company without having a broker license.  If you’re an agent, this means you don’t have to give up any of your commission whatsoever.  You can establish your own brand and promote your LLC instead of having the broker’s name on everything.  Yes, your listings are in your LLC’s name!  You can also recruit other agents to work for you and set up whatever commission splits/fees you want with them.  See our sponsorship comparison for more reasons.

What is this going to cost me?
The startup costs will vary but expect to spend around $1300 to form a new LLC, E&O insurance, and TREC application fee.  Our monthly sponsorship fee starts at $250 for up to 5 agents and includes complimentary transaction management software.  We’ll send you a breakdown of all the costs when you send us an inquiry.

This sounds great, but I don’t know how to get started.
No problem, we’ve got you covered!  Whether you need to form a new LLC or have an existing one that you want to use, we’ll guide you through the entire process.

To learn more, see our LLC Sponsorship page or complete the form below and we’ll be in touch!

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