It’s a lot more expensive to be a real estate broker in Colorado than it was, just last week.
Following an unexpected 60 percent drop in the number of new license applications, The Colorado Division of Real Estate is increasing licensing fees. Erin Toll, director of the division, in a memo said that the division is increasing fees to fund $4.1 million in costs.
“The division is cash-funded, meaning licensing fees pay for the program,” Toll wrote in the memo. The division is increasing licensing and renewal fees for real estate brokers, subdivision applicants beginning Monday.
Toll also noted that the division does not receive any subsidy or other appropriation form the state’s General Funds.”In Colorado, all real estate programs are 100 percent cash-funded,” she said.
She called the increases “significant,” and said they needed to be boosted because fee levels have been too low for the past several years to cover program costs. it is unknown how these substantial price increases will attenuate a 60 per cent drop in license applications, but beginning Monday the Broker Original Application Fees were doubled, from $250 to $500. The Original Subdivision registration Fee was raised, from $1000 to $4000. A three hundred per cent increase. And to change the name of a real estate company, typically as a limited liability corporation (LLC), the cost has risen from $200 to $1000. New corporation, and partnership names also fall under this heading.
Director Toll went on to say, “This year, fees are only covering 65 percent of the program costs, and fees had been raised gradually to match necessary revenues, but changing trends require immediate further adjustment at this time.” Indeed.
In addition to fee increases, the division is managing program costs by such things as reducing printing and copying, permitting telecommuting by staff members, restricting office supplies, foregoing performance pay salary increases in fiscal year 2009 to 2010, and adhering to the state hiring freezes. At this time, the division is not filing several vacant positions.
Despite the agency’s belief that the number of bad guys out there has no relation to the number of brokers, Toll noted that the division is receiving an “ever-increasing number of complaints, due in large part to the housing boom and subsequent credit crisis.” She said the division has dramatically reduced the turn around time for investigations.
“Two years ago, the case back log for real estate brokers was 54 percent,” she said in the memo. “Today, the backlog is only 9 percent. To continue the division’s consumer protection mission in a timely and efficient manner, the program must be adequately funded.”
THe Colorado Association of Realtors, on its website, said it was concerned about the timing of the price increases, since “housing is at the center of our economic crisis.”
But several local brokers think the price increases are a good thing, and that the number of agents who “sell real estate on the weekends” will decline, creating opportunity for those who have truely adopted the profession.
Toll agrees.
“I think the silver lining might be that it will convince some part-timers, who might only have licenses to help family or friends to leave the industry,” Toll said. “That might mean that we only have people who are serious about selling real estate, and improve the overall professionalism. That’s good for the industry and good for consumers.”
