“The road to success is always under construction.”
We thought a lot about how to begin this blog. Should we congratulate you for deciding to become a realtor? Should we tell you what a good decision you have made? Or telling you real estate is a lucrative field and you are going to be closing luxury estates in no time? How about telling you the number of registered realtors by the National Association of Realtors (NAR)? Nah, we’re not going to start this blog like that. You’ve done your research, you know your mind, and your inquiry shows you’re assessing the next steps. We are here to guide you in this journey on how to get a real estate license, so let’s cut to the chase.
Like most licenses, real estate requires preparation, training, qualification, exam, registration, update, costs, and other relevant aspects. We are going to cover them all starting from the beginning. Let’s begin!
Table of Contents
What Is a Real Estate License?
A government entity, here being the state, authorizes you to represent buyers and sellers in real estate transactions knowledge. Typically, this is the entry-level for the real estate career. In most states, you’ll need additional licensing to become a broker.
Each estate sets the required education and qualifications, hence the exclusivity of the licensing system.
Using your license beyond state borders
Once you get your license from one state, you can operate solely there. There is a reason for that: each state has its real estate regulations, and working as an agent requires the proper However, there are two policies available for moving agents:
Reciprocity:
This rule allows you to get a state’s license while being a licensee in another state. There is no standard policy regarding reciprocity. Some states allow full reciprocity, while others do not allow it at all. A third group of states partially abide by this rule; they can offer it mutually or one way.
| Reciprocity Policy | States |
| Full Reciprocity | Alabama, Colorado, Maine, Mississippi, Virginia |
| No Reciprocity | Alaska, Arizona, California, Delaware, Hawaii, Kansas, Kentucky, Michigan, Missouri, Montana, New Jersey, New Mexico, South Dakota, Texas, Vermont, Washington, Wyoming |
| Partial Reciprocity | Arkansas, Connecticut, Florida, Georgia, Idaho, Illinois, Indiana, Iowa, Louisiana, Maryland, Massachusetts, Minnesota, Nebraska, Nevada, New Hampshire, New York, North Carolina, North Dakota, Ohio, Oklahoma, Pennsylvania, Rhode Island, South Carolina, Tennessee, Utah, West Virginia, Wisconsin |
Portability:
This option lets licensed agents operate in another state without having to take the license exam in the operating state. There are levels for enforcing the portability rule. Cooperative states allow agents to practice based on states agreement, but they must conduct their business under a co-brokerage agreement with a local brokerage. A stricter approach is allowing realtors to represent clients remotely while restricting them from physically being there. And the most restricted one would be no dice! These states do not allow you to practice with your license from another state on their turf, period.| Portability Policy | States |
| Cooperative | Alabama, Arizona, Colorado, Connecticut, Georgia, Indiana, Kansas, Louisiana, Maryland, Mississippi, Nevada, New Hampshire, North Carolina, North Dakota, Ohio, Oregon, Rhode Island, South Carolina, South Dakota, Tennessee, Washington, Wyoming |
| Physical Location | Alaska, Arkansas, California, Delaware, Florida, Hawaii, Idaho, Illinois, Iowa, Maine, Massachusetts, Michigan, Minnesota, Montana, New York, Oklahoma, Texas, Vermont, Virginia, West Virginia, Wisconsin |
| Turf | Kentucky, Missouri, Nebraska, New Jersey, New Mexico, Pennsylvania, Utah |
The reciprocity and portability of real estate licenses depend entirely upon the state’s will. Each state has set rules governing these two options.
Now that we have established what is the domain of a real estate license let’s start the journey.
(It would be preferable to have a similar process graphic design but with numbers for each step.)
The overview of your 7 steps journey to getting your real estate license
Step 1: Look Up Your State’s Licensing Requirements
That is your first step because you need to know how the process works and what is expected of you. Commonly, the following are the requirement to apply for a real estate license:
- Minimum age: it is usually 18 or 19.
- Sufficient education: some states require at least a high school diploma or college-level education regarding the main topics in real estate.
- Residency: you must have legal residency in the state you are applying for a license.
- Background check: getting your fingerprints to match with state and national arrest record databases is standard.
- Prelicensing education: the minimum hours and mandatory topics required differ in each state; on the median, you need to take a 70 hours course.
- Sponsor: most states will ask you to enlist a broker as your sponsor.
- Enlisting E&O: having an errors and omissions policy is required from you upon application.
- Passing the license exam: the minimum score is often 75.
- Application fee: the fee is also set by the state, ranging between $100 to $300
As we mentioned earlier, these are only common requirements and can change depending on your state. So, checking out your state’s regulation on real estate licensing is vital.
Step 2: Finish Prelicense Courses
In most states, you can take the prelicensing education in person or online from an accredited real estate licensing school. However, the prescribed hours vary, as do the topics covered in these courses. Some subjects are common among states’ necessary credit hours:
- Real estate principles: Basics of real estate, terminology, understanding property, principles of property law, escrow procedure, closing the sale, discrimination, etc.
- Real estate practice: Guidelines on how to handle your business as a realtor, including business plans, working with clients, writing offers, pricing, etc.
- Legal aspects: This can be addressed in one or separate courses like the law of agency, the law of contract, promulgated contracts, the statutes of fraud, etc.
- Financial aspects: Covering monetary systems, mortgage loans, closing costs, etc.
Remember to get a written certificate on the hours of your taken courses. You’ll need them when submitting your license application.
Step 3: Submit Your Fingerprints
The background check mostly takes a couple of weeks to be conducted. Therefore, you need to submit your fingerprints in advance. Also, many states ask for your documentation of having been fingerprinted to register for the exam.
Each state has governing rules on the process. There is a fee for this stage, often under $100. Apart from the cost, the common feature is that the fingerprints must abide by the format acceptable to the assessing body (which can be a state organization like DOJ or a national one like the FBI). Usually, you are directed to an authorized service provider. There are details on when you should do this (before or after taking the exam) and how the results are delivered.
Step 4: Take the Exam
That is the part your knowledge of real estate is assessed. The exam is held by a contactor examination center designated in each state. Keep in mind that some states have time limits between finishing your prelicensing education and the date you are taking the exam. So, check your state’s limitations if there is going to be a gap in between.
Also, states differ on the time you can register for your exam: some require you to finish your education first, but others allow registration while your training is in process. The second option can be handy to save time and avoid gaps, so see if your state offers this option.
The exam comprises multiple-choice questions in two sections entailing the national and state portions. Apart from this fundamental similarity, other aspects of the exam are dissimilar, including:
- The number of questions
- Duration time of the exam
- The minimum score for passing
- Retaking one section
- Retaking the exam
- The waiting time for retaking the exam
- The number of times one can retake the exam
Step 5: Find a Sponsor Brokerage
Passing your exam doesn’t automatically enable you to practice as an agent. In most states, you need a sponsoring broker to monitor you during your first years (usually 2-3 years). When filling out your license request form, you must enlist the name of this brokerage. That is why you have to secure this part before submitting your request.
There are various independent and franchised brokerages that you can choose as your sponsor. The collaboration between a real estate agent and a brokerage comes in different forms; you need to iron that out in your agreement:
| Collaboration Type | Agent Type | Agent Compensation |
| Traditional | Independent contractor | Commission is split |
| Flat Fee | Employee | The agent works on salary |
| A la Carte | Affiliated with a local brokerage | The agent is paid per service |
| 100% Commission | Independent contractor | The agent pays a monthly fee but collects the entire commission |
Data from the National Association of Realtors (NAR)
Step 6: Get E&O Insurance
The Errors and Omissions policy is a liability insurance protecting the agent and the affiliated brokerage against the client’s claims. Depending on the set amount, E&O covers the legal costs, including the court and any settlement.
Having an E&O policy is not required by all states, but some ask you to enlist your acquired insurance upon your licensure application. The amount of this insurance is set by the rules of state organization for real estate. On the median, E&O liability insurance can be around $50 a month.
Step 7: Submit your application
Once you have all the required documents according to your applied state’s regulations, you can submit your application for the licensure process. As we discussed before, these requirements and their deadlines differ from state to state. Generally, they entail the following: the application form, prelicensing course completion, background check, exam results, sponsoring brokerage, and insurance.
Keep in mind that some states have time limits between the exam date and application submission. You must check that in advance to avoid retaking the exam.
This phase also requires payment of a fee, varying between states. It is somewhere between $50-300. It will take a couple of weeks to a couple of months (depending on the state’s process-it would be stated when you apply) to receive your license.
Bonus Steps for Furthering Your Career
Once you’ve received your license certificate in the mail, you can start your work with your sponsor brokerage. Here is where we congratulate you for all your hard work and perseverance!
However, we have included some additional steps here so that you can take better care of your brand-new license.
Step 8: Become a NAR Member
First, let’s see what this organization is and how its membership works.
The National Association of Realtors is the largest trade association in the US. To answer the question we posed in the intro of this blog, it represents 1,580,971 members by the end of 2022, according to NAR. Its domain covers both residential and commercial real estate industries. NAR’s mission is to “empower REALTORS as they preserve, protect and advance the right to real property for all.”
NAR has its Code of Ethics, and to become a member, agents must complete ethics training. This training must abide by the specific learning objectives and criteria set by the NAR. You should also pay the membership due, $150 per member, in 2023.
However, becoming a REALTOR® has its perks, including:
- Using an established brand
- Education and training opportunities
- Expanding your network
- Using products and services
To see if joining Nar is a suitable option, you can check out its 2023 membership guide and assess its advantages yourself.
Step 9: Renew Your License or Take It to the Next Level
Your issued real estate agent license has an expiration date and requires updates every couple of years (depending on your state, every 2-4 years.) In most cases, you’ll need some training or, as some call it, post-licensing requirements. The Continuing Education (CE) hours include participating in the state-approved course to renew your license.
It is best to check renewal criteria in advance to meet the requisites before your license expires.
Once you have worked as an entry-level real estate salesperson, you can get a broker license. Being a broker allows you to establish your own team and brokerage. This transition will require additional prelicensing education and mandatory years of operational experience (depending on the type of license being non-supervisory or supervisory). Nevertheless, that could be your next step if you are up for it.
Final Word
Now that we covered the steps on how to get a real estate license, a couple of points are established: firstly, details differ among states, but the general structure includes the 7 steps we reviewed together; secondly, it takes time and a budget around $1000; and finally, it takes effort. Besides, once you get your license, another journey begins: Becoming a successful realtor.
Why are we telling you this and piling on? Because there is a silver lining in all these challenging journeys: Although your road to success is currently under construction, you’re the one in charge of this project. So, lead the way!
FAQ
To calculate the amount of time required to get your license, you need to check your state’s licensure regulations. Typically, these are the steps that take time:
- Taking prelicensing courses: each state has a set hour credit reaching 180 hours in some states.
- Preparing for the exam: depends on your free time for studying.
- Background check: this entails submitting your fingerprints and getting the result of your background check, which differs from one state to another.
- Issuance of license: it can take a couple of weeks to a couple of months.
Considering all the above, optimistically, it can take around 6 months from the start to get your license.
Real estate agents and real estate brokers both go through the licensure process and assist buyers and sellers in real estate transactions. However, an agent is an entry-level salesperson in the real estate market. And, starting their career, agents must have a broker as their sponsor. On the other hand, real estate brokers go through more training and have to pass additional exams with enough years of experience to get the title. They can establish their team and brokerage and operate as supervisors.
You have various expenses on the way to getting your license:
Prelicensing education: $100-1000
Fingerprinting: under $100
Exam fee: under $100
Application fee $100-300
Putting these together, your median cost would be around $1000.
