Advice on getting contractor real estate license

ctrl+alt+del

ctrl+alt+del

500+ Posts
I truly enjoy remodeling and I am wondering about what it would take to get a contractor's license to maybe do some contracting on the side. Also, I plan on buying handyman homes, fixing them up and then either reselling them or renting them out. I figure getting a real estate license would save me a fortune in commission paid to realtors. Anyone here get their realtor license to avoid paying the standard 3% commission to the selling agent? I just wonder how many people have done this. Thanks in advance!

c+a+d
 
The State of Texas does not require a contractors license.
If you do a job in a city and you have to pull a permit, you will have to register with that city. Also who ever does your Elect, and utility plumbing they will need to have a license to pull a permit to do their job.
 
So, if I wanted to contracting for say, home remodeling throughout the various towns of Clear Lake and Galveston County, I would or would NOT need a license?
 
the biggest, maybe not too big or expensive depending, issue might be getting a broker to hold your license when you will not be an active agent.

After taking the necessary real estate courses which will be supplemented with your UT degree program when you apply to TREC, you then have to pass the state test. Not too hard if you paid attention in you Texas real estate law and your real estate finance classes. They also give you a study booklet to cover your bases of the topics on it.

After you pass your classes,(more time consuming than difficult for a UT grad), take your test, get your TREC acceptance(with fee), then you just get your broker to hold your license with hopefully a very small fee or none at all if they are a friend. Continuing education classes are required too but I don't know the current deal with that since I let mine lapse years ago.

Might depend on how often you plan on turning your houses whether it is worth the hassle of getting the Real Estate license side of it.
 
If you are doing work that does not need to be inspected by the city, you do not need a license.
If the job needs to be inspected to get a green tag ( the OK ) from the city, you will need to register with the city as a contractor.
 
maybe i'm misunderstanding...but you'll never get out of paying the 3% commission on the other side. also, i'd recommend you call around and find an agent who is well versed in these kinds of properties and make a deal with him/her for something like $1k per deal. there are a lot of agents out there that are looking for business and would take you up on it.
 
CAD...
check your PMs and send me your phone #...

and NO, you do not need a contractors license... I pulled both of the permits on my remodel job... 1 is for the addition and 1 was for remodeling.... at least in Harris County that is allowed, so I would assume the same applies for Galveston County...
the kicker is that under the 2 permits I got they put a note on there that plumbing, electrical and HVAC will be needed as well... those must be pulled by licensed contractors and are seperate sub-permits to the overall project permit... your project cannot be finalled until all the sub-permits have passed final inspection... at this moment I'm still awaiting my final HVAC inspection as it is a pain in the *** coordinating between myself and the oh so customer service oriented city inspectors...
 
The residential construction commission provides in part:

(a) In this title, "builder" means any business entity or individual who, for a fixed
price, commission, fee, wage, or other compensation, constructs or supervises or manages the construction of:

(1) a new home;

(2) a material improvement to a home, other than an improvement solely to replace or repair a roof of an existing home; or

(3) an improvement to the interior of an existing home when the cost of the work exceeds $20,000.

It also has an exception as follows:

Sec. 401.005. EXEMPTIONS.

(a) This title does not apply to a home that is:

(1) built by the individual who owns the home, alone or with the assistance of the individual's employees or independent contractors; and

(2) used by the individual as the individual's primary residence for at least one year after the completion or substantial completion of construction of the home.

(b) This title does not apply to a homeowner or to a homeowner's real estate broker, agent, or property manager who supervises or arranges for the construction of an improvement to a home owned by the homeowner.

If you do "handy man" jobs on the side then you clearly have to register, assuming it's more than a $20k job or a material improvement. I suppose that you might be attempt to argue that if you're buying, improving and flipping that you could fall under exception b, but that interpretation would really nullify the statute as it would mean that the statute wouldn't apply to new home builders who own the house until it's complete, ie most subdivision type situations, and the remainder of the statute makes it clear that it applies in those situations. The only difference between the flipping situation and a new-home construction is that a structure exists on the property. You're still buying the property, making improvements, and then selling it and hoping to receive compensation for those improvements.

I think you're required to register as a builder and comply with the statute, which sets out warranties (which are beneficial to the builder) and requires that each project be registered with the TRCC.

Having said that, it doesn't appear it's difficult to get registered. You just need to know your obligations. Really, the statute is very beneficial to builders and will only help you should any problems arise.
 
cbs....

the fallacy in your assesment is that you would have to be registered if you were buying the property through a company... if you as an individual buy a house to flip then you do not have to be registered... the loan, deed everything is in your name and as the homeowner you can pull permits and be your own GC....

if you establish a company as a business then you will have to be registered... however at the onset this would not make sense seeing as the company would have no credit and would have a hard time getting a loan to buy the property...

basically it is like this.... if you buy a house and then fix it up with your own $$ you don't have to be registered.... if you buy a house through a company and are taking out a loan for construction costs you will need to be registered....
 
I just recently got a license for Real Estate.

As an addendum to ldogg: If you are an individual owner, you do not have to have a license to sell the property yourself.

However, I would recommend it. All commissions are negotiable, there is no standard rate. Find an agent and make a deal you will be happy with.
 
ldogg53 --- go back to the definition of builder I cited above. It clearly states than the statute applies to individuals. And the commission is applying the statute to individuals and businesses. The form of the business --- corporation, individual, partnership, etc--- is irrelevant. If he's doing it for a profit, whether doing work on the side or flipping properties, I think he'd be best served to register and make sure he complies with the code.

You didn't need to be registered because you were acting as a gc for repairs to your homestead --- clearly an exception.

If the guy didn't register, I'm sure the cities and counties are coordinated enough to ask about registration when issuing permits, but if he's doing it for profit without registering, then he likely would be violating the statute.
 
also I'll say this... the $$ amount you put on a permit is totally arbitrary.... I put $5k for each of my permits... the city does not know how expensive the tile or tub is that you are putting in... they don't know how cheaply you can get lumber or sheetrock... and they also won't check these things once you have the permit!!

if CAD wants to do handyman work on other people's homes or those in a company name, then yes he should be registered.... if they are his own no worries...
 
cbs - fixing up your own home would not qualify you as a "builder". that specifically states that you're doing it for a fee, price, etc. upping your resale value is not the same as a fee or price.
 
If you are doing small jobs that do not need to be inspected, you do not need to register with the city or have to be licensed.
I build swimming pools in the Dallas area. If the pool is with in a city limit I have to register with that city. I do not have a state license as a contractor. The only ones that have to be licensed is the Electrician and Utility plumber.
If you are working on your on property you do not need to be licensed, you can pull your own permit and call for inspection.
 
You must log in or register to reply here.

Weekly Prediction Contest

* Predict HORNS-AGGIES *
Sat, Nov 30 • 6:30 PM on ABC

Recent Threads

Prediction Results Threads

2024 Schedules

Back
Top