Real estate transactions require more time, creativity and expertise on the part of sales professionals these days than ever before. Changing regulations, fluctuating markets and the reliance on digital media require agents bent on success to be ‘on the clock’ regularly. The time invested in making a sale is often staggering.
The process and time commitment of a Realtor® is frequently the same for a property with an asking price of $65,000 as it is for one going for $300,000. The real difference, and it’s the big one, is how much of a commission you as the agent-of-record walks away with when keys change hands.
That being said, working in a market with significantly more mid- to high-value properties makes a lot of sense. If you are an agent in the Youngstown metro market for example, where there are fewer properties in this price range, it may be time to think beyond a single-state license and look east for opportunities.
Welcome to Pennsylvania!
A drive of approximately 45 minutes from the state line is a Pennsylvania housing market that can provide significant prospects for an Ohio-based agent. Located three exits down the turnpike lie the fast-growing communities of Cranberry, Wexford, Warrendale and Pine where median home values hover around the $350,000 range—notably higher than Ohio’s Mahoning County with a median value of $85,000.
Plying your sales skills in this area of PA seems like a no-brainer, right? Well, there are a number of things to consider, not the least of which are reciprocity and portability—two factors requiring real estate agents to complete their Pennsylvania pre-license courses and appropriate state exams.
First, let’s take a look at reciprocity. This is an agreement between two states that allows a professional licensee in one state to obtain a license in another state through a streamlined process. Reciprocal agreements can vary based on state and industry laws. In real estate, a Realtor® holding an active real estate license in one state can apply for a license in another state without having to take state-required pre-licensing real estate courses. This ensures an agent saves time and saves on the cost of additional fees when acquiring a real estate license in another state.
So, what’s the big deal you ask? Surely, Ohio has a reciprocity agreement with its next-door neighbor. Surprisingly, it doesn’t. Agreements exist between the Buckeye State and: Arkansas, Colorado, Connecticut, Mississippi, Nebraska, Oklahoma, West Virginia and Wyoming. But Pennsylvania? Nope. Meanwhile, Pennsylvania has reciprocal agreements with: Arkansas, Georgia, Louisiana, Maryland, Massachusetts and New York. Ohio, however, doesn’t make the cut.
There are also real estate license portability laws. This set of rules and regulations allow Realtors® from out of state to engage in real estate transactions in a desired state. Ohio is recognized as a “cooperative state,” meaning out-of-state agents or brokers can physically enter the state to conduct real estate business. This includes property showings, closings, negotiations and other common actions during a real estate transaction. In order for an agent to work in a cooperative state, though, they must have a co-brokerage agreement with a licensee of that state. Pennsylvania is also one of six states that are known as ‘turf’ states. These states offer tight restrictions, in which out-of-state agents or brokers cannot conduct real estate business in the select state, either in-person or remotely.
Becoming a Dual-Licensed Agent
So, how can this work? If you are Ohio-licensed and want to start working in Pennsylvania (or vice versa), you are going to need to obtain a license to do so. Is it worth the time and expense? If you look at the home value comparisons mentioned above, it just may be a smart—and profitable—decision.
First, let’s take a look at the four-step process to obtain a PA license:
- Complete 75 hours of approved real estate education
- Take the Pennsylvania and National Licensing Exam
- Find a sponsoring broker
- Apply for Pennsylvania State License
The amount and cost of coursework varies from school to school, but the fees range from $200 to upwards of $1,000. As a courtesy though, some brokers will reimburse the agent for the cost of classes once closing on their first transaction.
If you’re a PA realtor looking to work in Ohio the process is:
- Complete 120 hours of approved real estate education
- Obtain a sponsoring broker
- Submit application
- Take test to obtain license
As in PA, the cost and coursework varies from school to school.
For Canfield, Ohio native Lisa Giordano, the opportunity to obtain her dual real estate license was just too good to pass up. A member of the Pennsylvania Board of Realtors®, Lisa moved from Wexford, PA back to the Mahoning Valley to be closer to family. She could still manage her Western PA business from here, but she wanted to be able to sell in Ohio as well. That meant becoming licensed in her home state.
Lisa said that the first factor to consider was money. “You’re required to complete a certain number of hours of real estate education classes, which are normally paid for up front,” she pointed out. “However, a majority of brokers will reimburse you the cost once you pass your State and National Real Estate Licensing test and sign with a broker.”An agent also needs to budget for MLS fees, Errors and Omissions insurance, membership to the OAR (Ohio Association of Realtors), PAR (Pennsylvania Association of Realtors) as well as the NAR (National Association of Realtors), if your broker requires membership. If an agent wishes to obtain certain designations or certifications, which require additional classes, that expense is the agent’s responsibility.
Upon earning her Ohio license, Lisa continues to work from home in Poland for Berkshire Hathaway Northwood Realty Services while also commuting across Western Pennsylvania and working a few days out of the week from the Berkshire Hathaway Home Services The Preferred Realty North Hills office in Wexford.
One advantage of dual licensing, she insisted, was the fact that if things slowed down in one state you could concentrate on another. “I do not have to rely on all of my business in a single state,” Lisa said.
The AmeriFirst Advantage
So, where do you locate a trusted lender that can help you cultivate new relationships in both states? The Poland, Ohio branch of AmeriFirst is is licensed to handle traditional, renovation, and new construction loans in both Ohio and Pennsylvania. Matt Heikkinen of AmeriFirst, (who has held real estate licenses in several different states throughout the country), understands dual licensing as much as just about anyone in the region; and, he can help you negotiate the maze associated with the process. Feel free to reach out to Matt at firstname.lastname@example.org.
*Not intended as accounting or investment advice. Contact your tax preparer for more information.