I am trying to get in touch with the Texas Real Estate Commission to get some answers. The phone has been absolutely busy. So, I thought I try here:

1. I just passed my Broker's exam. My next step is to set up my own brokerage. Must it be a corporation or LLC? Can it be a sole-proprietorship (just like how I was licensed when I was in salesperson)?

2. When you renew your fees, do you renew your broker's license and your corporation license?

3. What other insurance do you carry besides General Liability and E&O Insurance?

Congratulations on passing your broker exam. Did you try going on line to your state real estate comnission to get your questions answered? Be happy you are in Texas. If you were in California, you would also have to purchase workers compensation insurance for your agents and the clerical help.

Thanks for your post. I finally got through....

Apparently, I dont need anything (set-up) if I plan to just become a sole proprietorship.

I already have my assumed name set up, so, it sounds like I am ready to go....... Yippee!!!!

I will answer the question as far as entity. I would definitely set up as either an LLC or Corp..probably S corp. You need to have additional protection from lawsuits.

Hmmm.... What would the benefits be if my license and I would be personally liable for my wrong-doings? I do not intend to recruit and I plan to be the only realtor in my own company.

fatmaxxv:

It sounds like you are headed the way I have gone. Sole proprietorship with no sponsoring of other agents. You have apparently gone the extra step of doing a d/b/a (assumed name) where as I do business in my personal name; it has recognition from my established experience and record while I was with another company. The LLC, or Corporate for that matter, protection from law suits is certainly a valid consideration if you have a high degree of exposure but may be more than you need in your situation.

If you have a good track record, and sufficient experience, then you may be adequately protected with your E&O insurance. My attorney indicated that was enough in my situation. On the other hand if you were to sponsor other agents and grow the company larger then there would be more risk. The risk increases from sponsoring other agents as you become responsible for their sometimes unpredictable actions. Risk also goes up as the company gets bigger since it is perceived to have "deeper pockets" from which to extract a settlement.

I am at the stage where I plan to continue the real estate business indefinitely on a small scale basically to assure a degree of activity during retirement (something I am phasing into slowly). While there are other activities (for example charity work) that would also keep me busy and interfacing with people I would prefer to continue to supplement my other retirement income resources and take advantage of the tax deductions of having my office in my home.

Mr. Foreclosure

fatmaxxv:Sole propreitorship leaves you open to them suing you both personally and your business,not something I recommend.There are also great tax benefits and writeoffs having an llc over a sole properietorship.In my state setting up an llc is easy 100.00 bucks 2 forms online and your registered.Where it get complicated is if you want to hire employees and have workmans comp etc.,etc.

In my state e & o is a good business practice but not a requirement,other states are different.I also don't have an escrow account.I let the attorneys or title company hold em int here trust account.I don't want the pita procedures and auditing by the r.e. commission on trust accounts nor do I want the liability in case of a dispute between buyers and sellers.I will gladly let the title companies or attorneys assume that role.


If you set it up right say you own 3 offices,you can set up each as an llc for 100 bucks.Then if someone fell and became hurt they could only sue the assetts of that location.I use to have my pizza restaurant set up this way.It's also harder for them to see what assetts you own as a corp and easier to lookup as a sole propertier.You want the appearance that you are poor but in reality you onw many things


An llc or corp is not foolproof from personal lawsuits.If you do not follow protocol the corporate veil can be pierced if you show for instance gross neglingence or fraud.

how texas real estate ill be relocating to san antonio soon!!