The Association of Realtors has a nice firm grip on the MLS and since that is basically the only way to do business as a residential agent, they get to write the rules. And, the one rule that causes a lot of headaches for apartment locator brokerages and commercial brokerages is that if one agent is a member of the association, then the broker has to be a member, AND if the broker is a member then all of the agents under his/her license have to be members of the association as well.
There is nothing setup for apartment locators. As far as the association is concerned the only way they will allow a license to be sponsored by a broker who is a member and not pay dues is if they are on a completely different LLC license and they are not permitted to do any transactions whatsoever.
This separate entity would have to be designated as a LFRO (Limited Referral Organization) and here is the main requirement for a LFRO. “brokers, salespersons, or appraisers are sponsored by or affiliated with the Limited Referral Organization and are engaged solely in referring clients and customers to me or my firm and are not engaged in listing, renting, selling, leasing, managing, counseling, or appraising real property:” Even one transaction can cause the LLC to be required to join and therefore all licenses under it have to join as well.
So how do you avoid paying association dues if you’re not going to be using it? You have to be sponsored by a broker who is not a member of the association or a “Non MLS Broker”. That broker can sponsor your license without the requirement of association membership because they are not confined to the rules of the association since they are not a member.
There are brokerage firms who have a broker whom they have an agreement with to hold licenses for agents who are not active members with the association. They are out there, you just have to find them. When speaking to a broker about sponsorship and you are an apartment locator, or an agent that doesn’t want to join the association, you should ask questions like:
Will my license be under a Non MLS broker license?
If so, how are they affiliated with the brokerage? If not, will I be under a LFRO?
Knowing and understanding these will make sure you are putting your license with the right broker. The wrong broker can put you in the position of being forced to pay for association membership or find a new broker.
Here at Spirit Real Estate Group, we have both a MLS and a Non MLS Broker so it is not a requirement to join the association if you don’t want to.
In states where it is not required to have a real estate license to do apartment locating, you have nothing to worry about.