So, you have decided to become a real estate agent and get your license? Well, first of all, congratulations are in order. A real estate career offers a lot of perks – from working with different clients and visiting many homes, you won’t be doing the same thing every day. You also get to be your own boss and enjoy the satisfaction of helping buyers and sellers navigate through one of life’s major milestones.
However, as sweet as this sounds, it also comes with its own challenges. Thanks to the housing market frenzy in 2021, there were more than 1.5 million realtors in the U.S. as of 2023, and this number continues to increase. So, the question now is, with all this competition, how do you get a real estate license and stand out of the crowd?
The process, qualifications, cost, and timeline for becoming a real estate agent differ from state to state. Hence, it is important to understand exactly what it takes to begin this exciting career.
Key takeaways
A real estate agent is a licensed professional who arranges property transactions, connects buyers and sellers, and represents them in negotiations.
In almost every state, a real estate agent must work for or be affiliated with a real estate broker, someone who is more experienced, has taken additional coursework and is licensed.
A real estate license allows realtors to legally sell, broker, or rent real estate to prospective tenants and buyers on behalf of a real estate brokerage.
There is no national real estate license, so agents must meet their state’s licensing requirements.
Qualification requirements can be found on each state’s real estate regulatory agency’s website.
Who is a real estate agent?
A real estate agent is a licensed professional who arranges property transactions, connects buyers and sellers, and represents them in negotiations. Real estate agents are usually paid through a commission—a percentage of the property’s sale price—so their income depends on the size and number of deals they close.
In almost every state, a real estate agent must work for or be affiliated with a real estate broker, someone who is more experienced, has taken additional coursework, and is licensed.
Some agents eventually become brokers, which involves additional educational and experience requirements. Brokers typically have more responsibilities, can work independently, and hire agents to work for them.
Real estate agents are tasked with a multitude of daily duties and responsibilities, from lead generation and marketing to open houses and property closings. Still, many agents start their days catching up on administrative tasks, so they might:
- Respond to texts, emails, and phone calls
- Process real estate documents, agreements, and lease records
- Coordinate appointments, showings, open houses, and meetings
- Create and distribute flyers, newsletters, listings, and other promotional materials
- Create budgets for monthly, quarterly, and annual operations
- Develop marketing plans for listings
- Update client databases
- Research listings to develop comparative market analysis (CMA) reports
- Update websites and social media profiles
Because administrative duties can be very time-consuming, many agents hire an assistant to handle these day-to-day tasks. This allows the agent to leverage their time more effectively and to ultimately be more productive.
What is a real estate license?
A real estate license allows realtors to legally sell, broker, or rent real estate to prospective tenants and buyers on behalf of a real estate brokerage. A real estate license is required to do this work, and the requirements to obtain one vary from state to state.
There is no national real estate license, so agents must meet their state’s licensing requirements. While the requirements vary by state, all aspiring agents must take a pre-licensing course from an accredited real estate school, take (and pass) their state exam, activate their license, and join a real estate brokerage.
That last part is important. Agents must work for and under the umbrella of a licensed broker, who ensures that all of the agents in the office comply with real estate laws and regulations.
Types of real estate licenses
Most states offer two types of real estate licenses: sales (or salesperson) and a broker. In general, real estate salespeople and provisional brokers (or associate brokers in some states) work for and under the umbrella of a designated broker. Some states, such as North Carolina, have a “broker only” licensing system, meaning that there is only one basic type of license (broker) but with various “status levels.”
Many real estate salesperson licensees decide to complete the necessary coursework and exams to become brokers ultimately, as this often provides more flexibility and career opportunities.
If you are considering getting your real estate license, you must review the requirements for your state since there is no such thing as a “national” real estate license. Here, we explain how to find information on your state’s requirements, the different types of real estate classes that are available, and how to prepare for the real estate exam.
State requirements
No matter your location, you must meet your state’s unique requirements to get a license. You can find this information by visiting the website of your state’s real estate regulatory office. To find the site, you can perform an Internet search for “(your state) real estate regulatory office.”
You can also find links to each state’s regulatory agency on the Association of Real Estate License Law Officials (Arello) website.
Each state has specific requirements for:
- Age requirements
- Application process and fees
- Background checks and fingerprinting
- Continuing education
- Completion of an ethics course
- Education requirements (such as a high school diploma)
- Examination eligibility
- Examinations
- Pre-licensing courses
- Process for achieving the next level of licensing
- Reporting of any criminal history (such as misdemeanor and felony convictions. In most states, if you have a felony conviction or have pled no contest to a felony, you won’t be able to get a real estate license.)
Some states have reciprocal licensing agreements with other states, meaning you can get your license in one state and use it in another without taking that state’s license examination. Nevada, for example, has reciprocity with Arizona, Colorado, Delaware, Idaho, Illinois, Indiana, Iowa, Kentucky, Louisiana, Minnesota, Oklahoma, South Carolina, Texas, Utah, Washington, and West Virginia.
As with regular licensing requirements, each state has its process for obtaining licensure by reciprocity. Qualification requirements can be found on each state’s real estate regulatory agency’s website.
Below is a list of all states and the duration it takes to acquire a real estate license.
Real estate licensing by state
Real estate classes
Every state requires you to take some real estate pre-licensing course and demonstrate that you have completed a course with a minimum number of hours before you can schedule to take the real estate license exam. Each class is accompanied by textbooks, workbooks, or online material to assist your studies.
It is important to take a course that fulfills your state’s education requirements. You can do this in most states in several ways, which include:
- Online pre-licensing courses. All coursework is conducted over the Internet. Search “online real estate classes” to find options; not all online schools offer classes in every state.
- Brick-and-mortar real estate “schools”. In-person classes taught by real estate professionals. Search “(your state) real estate school” to find local schools.
- Community colleges. Many community colleges offer real estate classes that fulfill their state’s pre-licensing requirements. Contact your local community college for information.
In addition to the required pre-licensing classes, there are various real estate exam prep products available to help prepare you to pass the exam. These may be made available to you wherever you decide to take your pre-licensing class, or you can check online (search for “[your state] real estate exam prep”). Many exam preps offer both practice exams and tips for taking the test, both of which can be helpful.
Again, since there is no national license, be sure to invest in an exam prep product developed specifically for your state.
Real estate license examinations
Real estate exams are typically conducted on a computer and consist of two parts: a national portion covering real estate principles and practices and a state-specific section that tests your knowledge of your state’s real estate law. Each section is scored separately, and you must receive a passing grade (determined by each state) on both sections to pass the exam. If you fail one part of the exam, you typically need only retake that section.
The exams are in multiple-choice format; each state determines the number of questions and the time allotted for the exam.
Once you have completed your pre-licensing course, you should receive instructions on scheduling, registering, and paying for your exam. You can find out more information by visiting the testing provider’s website. However, whether it is administered by the state or through an outside party, your state’s testing center will have its regulations regarding the testing process. This includes specific rules for the types of calculators that can be used and how you identify will be confirmed at the test.
Once your application is approved, the state will mail your real estate license certificate (and probably a pocket card) to the address shown on the application form, and your name will be searchable under the “Licensees” section of its Web site.
Keep in mind that it is unlawful to engage in real estate business before the state’s real estate agency issues your license (i.e., don’t start working until you have the license in your hand).
Real estate pre-licensing course
Completing your real estate pre-licensing requirements can be done in several ways. Real estate schools, universities, technical schools, and real estate companies typically offer licensing programs, online classes, and home study material for pre-licensing. It is prudent to research before choosing the institution is important, as schools with good reputations can enhance your odds of getting the license as quickly as possible.
Different institutions may also have varying schedules for the pre-licensing classes. Some have a set number of classes that take place at specific times, while others allow students to complete the courses on their own schedule and within a flexible timeframe. The cost of pre-licensing courses may also vary depending on the state and the school you choose.
Finding a real estate broker
The next step after getting your license is to find a real estate broker to work with for the first few years as an agent. You should have at least a preliminary agreement with a broker before getting the license, as you won’t be able to generate any income once you’ve graduated unless you’re under the tutelage of an agency.
How you choose the right brokerage typically depends on two factors: the brokerage type and its commission structure.
Type of brokerage
The brokerage type can influence the type of work you do, company culture, the quality of the training you receive, and other factors related to your development. The main brokerage types are:
- National franchises
- Local brokerages
- Virtual brokerages
Commission structure
The company’s commission structure can have a major influence on your earnings. The most common structures are:
- Traditional split plans. You will earn half of the total commission for every transaction, with the brokerage getting the other half
- High-split plans. You will earn between 70 and 100 percent of the commission but will have to pay the brokerage a monthly desk fee
- Hybrid plans. A mix of the previous two plans
Real estate agent compensation
Traditionally, agents were paid a percentage of the property’s sale price through commission. The more the house sells for, the more money the agent makes. However, payment arrangements for real estate agents are changing. Online listings now allow consumers to do much of the shopping on their own without help from an agent.
Some brokerages charge a lower commission for more expensive properties, and some handle the entire transaction for a flat fee that ends up lower than a regular commission. Other companies offer an à la carte price structure that lets sellers pay only for certain parts of the sale process. This includes adding the property to a multiple listing service or helping with an open house.
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