Getting your real estate license is easy – you just need to complete these 5 steps.
Important: Details vary by state. Click the button below to see our full guide to real estate licensing in your state.
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Real estate is one of the best investments a person can make. Properties almost always go up in value and people that get in on the ground floor can make considerable profits over time.
You can cash in on real estate by becoming an investor, but another great option is to become a realtor. Realtor careers offer flexibility and the chance to build considerable wealth. It is also a position almost anyone can qualify for. However, there are some steps you must take to become licensed.
Realtor vs. Real Estate Agent
Realtor, real estate agent. Most people use these phrases interchangeably. But there is a difference. Let’s review both positions.
Real Estate Agent: Anyone who holds a real estate license is considered to be a real estate agent. In other words, to become a real estate agent, you just need to get a license. To get a license, you must take a set number of classes to complete a course. You must then pass an exam that tests you on national, state and local real estate practices, standards and laws. You also need to complete about 180 hours of pre-licensing coursework (the number of hours will vary by state).
Once these requirements are met, you will need to pay a licensing fee to get your license. The license must be renewed every 1-2 years and you must show proof of continuing education courses when renewing.
Realtor: A realtor is basically a real estate agent who is an active member of the National Association of Realtors. Joining the organization will benefit agents as it has strong bargaining power with state and federal governments. It offers members better legal protection and other advantages.
Because the NAR has an excellent reputation, agents that join will look more impressive to clients and have a leg up on non-realtor competitors when it comes to growing their business.
How Do I Become a Realtor?
If becoming a realtor sounds good to you, here’s what you will need to do to join.
Eligibility: To be eligible to join you must qualify as follows:
If you meet these requirements, go to the NAR membership page and follow the steps to apply. If your application is approved, you will need to pay an annual membership fee of $120 as well as some prorated dues.
Real estate agents do not need to become realtors to be successful, but becoming a member has several perks. In addition to legal protection and an impressive looking resume, it provides informative newsletters to members as well as networking opportunities. Will you be taking this step to boost your career?
Realtor in Gaithersburg, Maryland
RE/MAX Realty Group
“I think that some of the things that helped me to pass the exam on the first try were to take my real estate courses online. By taking the course online, it allowed me to do the course at my own pace to ensure I was able to absorb the information easier and also revisit certain topics as needed.
Another key was to purchase a couple of practice test books. My local board of REALTORS as well as sites like Amazon have practice test books specific to my state which allows me to practice the tests, get familiar with some of the test content, and get familiar with the test format.
One other key factor was that I had a mentor when getting into the business. Having a mentor was critical because he was present in case I needed help with my coursework and since he had many years of experience, he helped me to dissect the questions on the practice test allowing me to better prepare for the exam.”
*This article was updated on 11/15/2021
This information was reviewed and approved by Chris Heller. Chris serves on the AgentAdvice Editorial Board and is the Chief Real Estate Officer at OJO Labs. Chris brings deep expertise having held influential industry positions including CEO of mellohome and former CEO of Keller Williams Realty International.
How much time it will take you to acquire a real estate license in the USA depends on yourself and your state’s education requirements. The sooner you pass the pre-licensing coursework, do the background check, and pass the licensing examination, the sooner you’ll be selling homes!
Depending on the state, pre-licensing courses can take anywhere from 2 to 8 weeks to complete if you’re dedicated to the courses full time. Scheduling and passing the exam can take anywhere from 1 to 4 weeks. So, all in all, the entire process from starting the course to obtaining your license can take from 3 weeks to 12 weeks to complete. If you’ve identified which state you want to get licensed in, feel free to select it from the menu above to get more specific guidance.
As a real estate agent, don’t expect to get a regular salary. Most agents are paid on commission meaning they earn a percentage off of every sale they make.
This leaves some room for uncertainty. Agents never know how many homes they will sell or how much the homes will go for in advance. Therefore, it’s difficult for them to predict what their real estate agent salary will be.
While we can’t tell you how much you’ll be making, we can provide you with information on how a real estate commission works. This will give you some insight on what you can expect to earn on the homes you sell.
As a real estate agent, you may be able to negotiate the amount of commission you get. You will start out with a certain commission rate, but as you gain experience, you may earn leverage that will help you negotiate for a higher commission.
In any case, let’s say your commission rate is 6%. This is the typical rate for most new agents.
You sell a house for $500,000. That leaves you with a $30,000 commission…but not so fast.
That commission has to split between you and the buying agent leaving you with $15,000 each. (If you are lucky enough to represent both the buyer and the seller, you can keep the full commission).
Think you’re done now? Hang on because 40% of that has to go to the broker. So now you’re left with $9000.
Don’t forget that you will still have to pay independent contractor taxes to on that income when April rolls around.
Dividing up a good amount of your commission can be frustrating, but most real estate agents manage to do pretty well for themselves, especially if they build up some experience. Joining the National Association of Realtors can also boost your reputation and help you bring in more clients.
As a realtor, here’s an estimation of what you can expect to make.
Additionally, real estate agent salaries are on a trajectory to increase. A recent survey showed that brokers and agents saw a rise in salaries from 2018 to 2019. 65% of agents and 78% of brokers brought in more money in 2019 than they did in 2018.
While a decent commission rate will help you bring in more money, it won’t mean anything if you aren’t making sales.
It’s impossible to predict how many sales you will make each year, but the market you are working in will be a pretty good indication.
For instance, if you work in a big city, there will be a lot of demand for housing making for an active market. On the other hand, there will also be stiff competition.
If you work in a quiet town, you may not have as many clients coming through, but without a lot of competition in the area, the people that are looking to buy and sell will be more likely to call you first.
Overall, real estate agents tend to make more money in metropolitan areas. This is in part, due to the increased demand for housing. However, properties in these locations also tend to be more expensive. Therefore, they will yield higher commissions when they sell.
As a real estate agent, you have the potential to make a substantial amount of money. But you need to work hard to do it. Here are some tips that will help you increase your real estate agent salary.
Agents can earn extra money by working in other capacities within the industry. Here are some income sources that will be ideal supplements:
Not only will these options help you bring in extra income, they will also provide you with more real estate insight allowing you to become an expert in your field.
As an agent, it’s a good idea to broaden your horizons. For instance, if you specialize in residential real estate, you might also consider branching out into commercial real estate, relocation and property management. This will provide you with more money-making opportunities.
Once you become an agent, you may choose to continue your education by earning a bachelor’s degree in a related industry like business, sales or marketing. This will provide you with the background you need to help you succeed and it will also look impressive to clients.
Studies show that agents with a bachelor’s degree or higher earned 5% more money than those without degrees.
Continuing education doesn’t have to be limited to earning a degree. You can also take courses which may include online classes, workshops and resources offered through your agency.
These courses can provide you with a strong background that will make you more successful in your field and you can also earn certifications that allow you to work in specific niches. They will increase your expertise while providing more options for bringing in income.
A mentor can offer you advice that can help you become an expert in your industry and provide direction if you are looking to branch out into a related niche. If you study with someone well known, you can add them to your resume to make yourself look more impressive.
Real estate agents may be drifting into unknown territory when it comes to salaries. The tips in this article offers guidance in terms of what you can expect. Here’s hoping that your career is both financially and mentally gratifying.
Consider working for an iBuyer Company
The truth is, many iBuyers collaborate with real estate agents to close deals.
While every company works with agents differently, many pay commissions to agents representing the buyers and sellers they deal with. Agents may receive a commission of about 1% in referral fees allowing them to boost their proceeds.
In fact, many agents partner with iBuyers to increase their income and help more of their clients buy and sell quickly.
The exact cost of getting a Real Estate Agent License in the US will depend on your state, but in general, you will incur with the following costs:
All in all, the fees for obtaining a Real Estate License in the USA are anywhere between $250 – $1,600, but in some cases, it can be higher due to the Errors and Omissions Insurance explained above.
Real estate exam prep is THE best way to ensure a passing score on the state test.
There are some things on the test your courses may not have prepared you for. There may be tricky questions that you are not sure how to answer. You may become lost and stressed out which will set the tone for the entire test taking session.
So, we’ve made a list of the top real estate exam prep providers:
To become eligible to take the real estate licensing exam in the USA, first, you must complete a pre-licensing course. Every state has specific requirements about the format of the course and the minimum number of hours required before you can schedule an exam.
After completing the pre-licensing course, the next step is applying for the exam. Before you take the exam, note that some states require you to complete a fingerprint scan and pass a background check. The exam generally contains 2 parts – the national portion and the state portion – and you must pass both to receive a license. If you fail either portion, most states allow you to retake only that part within a specified period. Once you’ve passed both parts of the exam, you should then submit your application for a real estate agent license.
After you’ve completed all these steps and earned your license, you will need a supporting broker to “sponsor” you while you’re learning. If you don’t, most states allow you to apply for an inactive one and activate it once you’ve found a supporting broker.
Generally, yes! Many states allow you to take your real estate class online. An increasing number of people choose this type of studying as it’s more time-efficient, allows students to organize their time more efficiently, and lets them study at their own pace.
As a reminder, all real estate courses taken must be approved by the relevant state – so be sure to check the state-specific page on this site before buying your course.
In most states, the licensing test itself has multiple-choice questions divided into two portions:
All questions on the exam are specifically designed to test your understanding and knowledge in two areas: general knowledge about real estate and the ability to apply fundamental principles of real estate laws to solve new or existing problems. To maximize your odds of passing, be sure to take a real estate exam prep course before going in and sitting for your test!
Again, this depends on the state. In general, to be eligible to apply to take the state real estate exam, first, you have to complete a state-approved pre-licensing course, which can also be taken online in many states. After finishing this course, you can apply to take the test in an officially approved location.
In most states, even if you don’t have a sponsoring broker, you can still take the licensing exam. However, in order for your license to be officially active, you have to work under a sponsoring broker. If you don’t have one after passing the exam, some states allow you to apply for an inactive license, but even so, you can’t practice as an agent until you get sponsored.
This one varies widely by state – so find your relevant state through the menu above to be sure.
Most states require you to apply for and pick up your real estate license within a year of passing the exam. If this period expires, you will have to retake the exam all over again.
If you don’t get a passing score, your score report will indicate your results along with reapplication instructions. Most states will give you more than one try – so don’t stress out.
If you want to retake the exam, you will need to schedule another appointment. Do note that failing one portion (national or state-specific) of the exam doesn’t necessarily mean you’ve failed the whole exam. Most states allow you to retake only the piece you’ve been unable to pass within a specified period after failing.
In most states, if you fail the real estate license exam three times in 1 year, you need to take additional education hours. Most states require an additional 20 to 40 hours of education for every failed portion. After you’ve completed the additional courses, you can then apply to retake the exam.
Licensed individuals working under a sponsored broker have an active license, which means they can engage in real estate brokerage activities, while an inactive real estate license means the opposite. The person doesn’t have a sponsoring broker, and because of that, is not eligible to engage in any type of real estate brokerage activities.
The simplest and fastest way is to research brokerages in your city and contact them via email or phone. Schedule a meeting with a broker, offer them your services and discuss their requirements as a sponsoring broker and if they would be willing to take you under their wing. Read more about how to pick a sponsoring broker that is right for you.
NOTE: A sponsor at your brokerage is be different than a sponsoring broker.
No. Every state has different regulations about obtaining and maintaining a Real Estate license. In other words, there is no such thing as a general US Real Estate license.
However, some states have what is called reciprocity between them. Reciprocity means that obtaining a Real Estate License in one state will make the same license valid in another state. In most cases, the reciprocity allows the Real Estate Agent to skip through all the pre-licensing work and take only the state-specific portion of the exam. The process varies by state, but in many states, you simply need to complete a reciprocal license application with the state in which you are seeking your license.
You should check for your state’s real estate license reciprocity policy if you’re moving from one state to another – it may save you having to start entirely from scratch in your education and testing requirements. These details are included on the state specific page on this website.
Generally, real estate agents in the US are required to complete a certain number of continuing education hours, which vary from one state to another. Most states have requirements about the number of hours you need to complete and which topics and areas the continuing education courses have to cover.
Every state has specific rules about how long a Real Estate License lasts and how to maintain it, but usually, the period is between 2 to 4 years. During this period, the licensed agent is required to complete a certain number of continuing education hours and provide proof for it to the real estate regulatory board to maintain their Real Estate License active.
To be able to participate in real estate transactions, a license is mandatory. But to obtain one, you must prove your knowledge, professionalism, and expertise in different fields.
We hope these questions will help you on your journey of becoming a licensed real estate agent. If you want to find out more about becoming a real estate agent in some of the states, check out our state-specific real estate licensing articles.
In short – sometimes.
In most states, pre-licensing education to get a real estate license costs between $100-$1000. Real estate courses take a lot of time and energy to develop, which is why free real estate courses are few and far between. These companies need to pay their staff to keep the courses updated with the latest and greatest information, stay up to date with legal requirements at the state level, etc.
There are some free online real estate course options available though.
Free continuing education courses: (for once you’ve already received your license) is sometimes free through title companies, brokerages etc. It’s rare for real estate licensing education courses to be free though, because the content is longer, and takes much more time to create a strong course.
Free online real estate courses: AgentAdvice.com has a limited availability program that provides free online real estate courses to students in some cities. Real estate brokerages are often looking to hire agents, and are willing to pay recruiters to help get new talent in the door. Because staffing up their team is important to brokerages, these brokerages are sometimes willing to foot the bill for real estate school for the right candidate. If you’re interested in learning more about this program, please reach out to our team via our About page.