Any person who engages in real estate transactions as an agent for another must first obtain a real estate license in the state in which they will work. For the general purpose of protecting consumers, each state has its own rules, regulations, and examination for obtaining a real estate license.
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.
To become licensed, you will have to meet your state's unique requirements. You can find this information by visiting the Web site 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) Web site.
Each state has specific requirements for:
- Application process and fees
- Background checks and fingerprinting
- Continuing education
- Education requirements (such as a high school diploma)
- Examination eligibility
- 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 having to take that state's license examination. North Carolina, for example, has reciprocity with Arkansas, Connecticut, Georgia, Iowa, Louisiana, Mississippi, Nebraska, South Carolina, Tennessee, and West Virginia. As with regular licensing requirements, each state has its own process for obtaining licensure by reciprocity. Qualification requirements can be found on each state's real estate regulatory agency's Web site.
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, and/or online material to assist in your studies. It is important to take a course that fulfills your state's education requirements, keeping in mind that there is no "national" real estate course or license.
In most states, there are a number of ways that you can fulfill the education requirements, including:
- 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.
You may be able to save money using one type of class program over another; however, it is important to choose the method that will work best for your learning style and schedule. For example, if you are an independent learner, an online class may work well. If you learn better from a live instructor and if you like to be able to ask questions, a brick-and-mortar or community college setting may be more appropriate. Choose your course carefully, since the quality of the instructors and materials may have a direct effect on how well prepared you are to take the exam.
In addition to the required pre-licensing classes, there are a variety of 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 exams are typically conducted on a computer and consist of two parts: a national portion that covers 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 multiple-choice format; each state determines the number of questions and the time allotted for the exam.
Most, but not all, states use outside testing providers to administer their real estate license exams, with testing offered on weekdays and Saturdays to accommodate different schedules. Once you have completed your pre-licensing course, you should receive instructions on how to schedule, register, and pay for your exam. You can find out more information by visiting the testing provider's Web site. A few of the main providers are:
Your state's testing center, whether it is administered by the state or through an outside party, will have its regulations regarding the testing process, including specific rules for the types of calculators that can be used and how you identify will be confirmed at the test. It is important to review the requirements thoroughly, so there are no surprises on test day.
If you fail one or both sections of the exam, you will have the opportunity to retake the exam. Each state has its own rules regarding the number of times you may retake an exam, how long you must wait in between exams and the deadline for completing any retakes. If you do pass, you must submit a complete application on the appropriate forms, along with any required documents and fees, to your state's real estate agency.
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 the business of real estate before the state's real estate agency issues your license (i.e., don't start working until you have the license in your hand).
The Bottom Line
Getting a real estate license is a commitment of time and money, but it can help secure a rewarding job – with the opportunity for growth – within the real estate industry. As a real estate salesperson or provisional broker, you will have to work for and under the umbrella of a licensed broker. For increased flexibility and career opportunities, you may eventually decide to pursue a broker or broker-in-charge license. In addition to a real estate license, you may also wish to consider the various real estate designations and certifications, including those specific to mortgages, appraisals, residential property, commercial property, and property management, to further enhance your career and marketability as a real estate professional.