Do you want to know how to get a real estate license to start a career as a real estate agent?
Well, it’s time to get to work then!
As of 2020, there were more than 1.46 million realtors in the US, and this number will only rise in 2021. Flexibility, autonomy, and pay lure many to real estate sales. Realtors earn a little over $80,000 on average. Real estate agents can earn virtually unlimited amounts. After meeting state licensing standards, a real estate agent’s options are endless.
The State by state process, requirements, cost, and timeline for becoming a real estate agent varies, so it’s important to know what’s required.
How to Get a Real Estate License
Realtors with appropriate real estate licenses can sell, broker, or rent real estate for real estate agencies. This work requires a real estate license; state requirements vary.
Step One: Check your state’s licensing and education requirements.
First, focus. Each state has different pre-licensing and license application requirements. Learn license requirements from your local real estate commission.
Most states:
- College-level real estate education includes titles, deeds, contracts, and property ownership.
- Permanent residency in the state
- 18-year-old minimum
Your state’s real estate licensing authorities must approve your courses and school.
Licensed real estate agents moving out of state should check if their new state has a reciprocity agreement with their home state. If a reciprocity agreement exists, you may be pre-licensed. This doesn’t mean you don’t need a license in your new state; you may be able to skip one or two processes.
Wyoming, Oregon, and Montana reciprocate with Idaho. If you hold an Idaho real estate license, you don’t require pre-licensing classes in the other three states. Wyoming, Oregon, and Montana require state-specific tests.
Other regions have reciprocity agreements; if you want to take your real estate license beyond state lines, see this instructions.
A real estate degree or law license may reduce pre-licensing requirements.
Step Two: Finish school
Becoming an agent takes time and money. Before starting, you must determine what resources to budget.
Some pre-licensing schools meet for a set number of weeks, while others let you finish courses at your own pace. Choose the one that works best for you. Pre-licensing classes cost between $200 and $1,000 per school and state.
Step Three: Take the state license exam.
Once you’re confident in your real estate knowledge, apply to take the exam. It is important to note that this process includes application fee payment and test registration through PSI Exams.
Many states don’t need you to have completed all education hours before testing. You can earn credit hours while waiting for your exam application to be authorized, speeding up your licensing application.
This is different from applying for a license, which comes after passing the exam.
Step Four: Pass the state’s licensing exam.
Simple, right? Each state requires real estate schooling before the exam. Preparing for the exam increases your chances of passing over guessing.
The test will have 100 multiple-choice questions on national and state laws. Many jurisdictions require at least 70% to get a license. The exam takes 1.5 to 3.5 hours. Exams cost $15 to $100.
Get an official real estate transcript or completion certificate from your school and a copy of your exam result for your license application.
Step Five: Get an agent’s license.
After passing, submit your test results, license application, and payments. A license application costs $50 to $250, and a background check costs $40 to $100.
Before applying, verify with your state’s real estate commission for E&O insurance. E&O insurance protects realtors from financial losses and lawsuits. Brokers sometimes sell E&O insurance.
Note, that every state requires 18-year-olds with a GED or high school diploma to apply for a real estate license. Also, you must be authorized to work in the U.S. and a resident of numerous states.
Keep in mind, that it takes one to two months to process a license application.
License? Great! It doesn’t imply you can sell immediately. Most states require first-year real estate agents to work with a broker.
A real estate brokerage is an office where agents work.
When choosing a brokerage, you should consider these factors:
Brokerage Types
The brokerage you work with determines the work you do, the training and mentoring you receive, and the business culture you experience daily. Three brokerage types:
Franchises nationwide
Keller Williams Realty, RE/MAX LLC, and Coldwell Banker give new agents training, brand recognition, and resources.
Boutique brokers
Smaller brokerages may offer more individualized training and promotion.
Virtual brokers
SaaS has introduced online-only real estate brokerages. Virtual brokerages offer higher commission splits, cheaper desk fees, and better technology.
Corporations
You must enjoy where and with whom you work.
- Does the broker require more training?
- Do they mentor new agents?
- Do they need “floor time” or teamwork?
- Who gets what?
- Will you handle marketing?
Three commission structures are typical.
Before accepting a brokerage’s offer, you must understand their commission structure. Three common structures:
Split-level architecture
Your brokerage receives the other 50% of the commission. Programs have low or no desk costs.
Split-Strategies
With Split Strategies, you receive a commission of 70 to 100%, however these plans have high monthly desk fees.
Hybrids
These plans combine the previous two.
Therefore, hybrid plans provide agents a 70% stake at the start of the year and 100% when they accomplish financial targets.
Some larger companies charge 5-8% “franchise fees.” Ask prospective employers if additional costs will be removed from your commission.
Step Six: Join the NAR (NAR).
Realtor, right? You’re licensed and have a sponsored brokerage. Incorrect. To utilize the REALTOR® designation, you must join the NAR.
This qualification is required to participate in most Multiple Listing Services (MLS), which display other agents’ listings.
Real Estate License FAQ
How much do real estate agents make?
According to the BLS, Real Estate Agents earned an average of $83,886 a year.
How long does real estate licensing take?
Depending on your state’s real estate licensing requirements (40-150+ hours of formal education, studying, and passing an exam), it can take three to six months to get a license.
How much does a real estate license cost?
Depending on the region of the needed education course, a real estate license costs $300 to $1,000. Your real estate license application, fingerprints, background check, and state test fees will add $100 to $200, bringing the total to $500 to $1,200.
Can you get a real estate license online?
Some states provide online prereq courses. Most states require taking the exam in person through a third-party source.
Where do I take my real estate exam?
You can take the real estate license exam at state-approved sites. Local real estate commissions will provide this information after you apply to take the exam.
