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#466335 - 12/19/19 05:55 PM Broker exams passed--now what? Open a Limited Function Referral Office?
meloHYPE Offline
Junior Member

Registered: 12/19/19
Posts: 3
Loc: South Carolina
tl;dr - Does anybody have input regarding a Limited Function Referral Office to a newb?

Hey all, I am new here, and new to agency/brokerage in general. I have 14+ years of experience in architecture and commercial real estate development. I received a real estate development master's which allowed me to bypass RE schooling & pre-req's, and I am jumping straight into a broker license. I have zero experience as an agent.

I passed the national and South Carolina broker exams, and I am in the process of deciding what to do now. I do not intend to work as an agent or be in any "for service" position to clients/customers, as I plan on working on the commercial development side.

I am considering forming a Limited Function Referral Office and acting as the BIC (as the sole employee). This would allow me to collect referrals (essentially, discounts on my own deals). I foresee most of my development work to be commercial, where lawyers and custom contracts will be required, that are outside the scope of a license. There may be some residential projects as well. Does anyone have more info on LFRO? Pros? Cons? Does an LFRO have the same requirements--trust, bank, escrow, etc?

Alternatively, I am considering "parking" my license at a brokerage, however, I do not believe I will have enough volume to justify their cut. The pro to this is I would have access to MLS, other resources, and most importantly a collective of people and a BIC to ask questions to.

For commercial, is access to MLS important? For residential, does MLS allow for any info that isn't provided on websites (zillow, etc) or county records? AFAIK, a limited function referral office does not qualify to access MLS.

Thanks! Any input would be helpful.

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#466347 - 12/28/19 03:53 PM Re: Broker exams passed--now what? Open a Limited Function Referral Office? [Re: meloHYPE]
Long Walk Online   content
Member

Registered: 06/27/08
Posts: 424
Loc: New Hampshire
Originally Posted By: meloHYPE
tl;dr -

For commercial, is access to MLS important?

The acronymn "tl/dr" means that an article or post was too long and so wasn't read. Why did you use it for your post?

For commercial, you need to have the same access for brokerage that you did for development if that is the space you want to work in. Quite often, smaller commercial properties, including development land, will go through the residential MLS; larger properties may be offered through LoopNet/CoStar, but may only be listed on the broker's website.

You may want to talk with the SC Real Estate Commission, but they are likely to tell you to get a lawyer for your questions.

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#466418 - 01/09/20 06:37 PM Re: Broker exams passed--now what? Open a Limited Function Referral Office? [Re: Long Walk]
meloHYPE Offline
Junior Member

Registered: 12/19/19
Posts: 3
Loc: South Carolina
Originally Posted By: Long Walk
For commercial, you need to have the same access for brokerage that you did for development if that is the space you want to work in.


Could you clarify what you meant above? I am not sure I interpreted it correctly.

Since my post, the SC RE Commission replied to me, and clarified the following:

" There is no reference document to establish a referral office. Limiting the office to referral only is simply the BIC's office policy... A trust account is only required if an office is holding money belonging to others in a real estate transactions such as deposits. If a brokerage office/BIC will not be doing so, a trust account is not required.

Essentially all you need is an office policy setting the limitations/requirements of associate licensees and scope of services offered to customers/clients through your office. (If limiting activities to referrals only, that should be in the policy)
"

So, according to the commission, all I need is a business bank account and office policy. What kind of attorney typically specializes in real estate brokerage formation? I am trying to keep costs down, as I do not believe this will actively be a moneymaker for me. Ideally, the license will allow me to network and visit properties without another agent present.

Regarding the tl;dr, It isn't typically used in the way you stated. It is used by the writer to summarize the paragraphs preceding/following with a short synopsis to grab the readers' attention.

Thanks for the help. Any other input is appreciated.

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#466423 - 01/10/20 01:39 PM Re: Broker exams passed--now what? Open a Limited Function Referral Office? [Re: meloHYPE]
Long Walk Online   content
Member

Registered: 06/27/08
Posts: 424
Loc: New Hampshire
Originally Posted By: meloHYPE
Originally Posted By: Long Walk
For commercial, you need to have the same access for brokerage that you did for development if that is the space you want to work in.


Could you clarify what you meant above? I am not sure I interpreted it correctly.

I have no idea how you interpreted this, so how could you expect me to clarify?

Originally Posted By: meloHYPE
What kind of attorney typically specializes in real estate brokerage formation?

Unfortunately, this site attracts people accustomed to being employees who think that they should become business owners. If you want to own a business, you either need to pay for information or find it on your own. I consult at $300/hr and will send you an engagement letter if you pm your contact info.

Originally Posted By: meloHYPE
Regarding the tl;dr, It isn't typically used in the way you stated. It is used by the writer to summarize the paragraphs preceding/following with a short synopsis to grab the readers' attention.
Guess you omitted your summary. And, yes, my understanding is commonly used.

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