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A California real estate license is your entry point for becoming a real estate agent in California. The Golden State, as California is affectionately called, is known for its active wine industry, gorgeous beaches, and vibrant film industry based in Hollywood. In fact, the demand for real estate in California is at an all-time high and becoming increasingly more valuable.
Now is as good a time as any to get your California real estate license and leverage it to its fullest potential. This guide will provide you with all the details you need to get your California real estate license, set up your California real estate business, and succeed as a real estate agent in the competitive California real estate industry.
What’s the real estate industry like in California?
California is the third-largest US state based on land size. With an estimated population of 39.75 million people, there is more demand than ever for reputable and knowledgeable real estate agents.
California is divided into four regions:
- The Coast
- The Deserts
- The Central Valley
- The Mountains
Your California real estate license will give you the ability to legally buy and sell real estate in all 4 of these areas. Whatever area you choose, it’s important that you know the area well, since your competition definitely will.
There are three factors that generally contribute to an understanding of any real estate industry:
- Economic conditions
- Consumer outlook
- The competitive landscape
Economic conditions are favorable for opportunities to both buy and sell real estate since California has the 5th largest economy in the world.
Nevertheless, there are some concerns about the future of California’s real estate industry. There is currently a housing shortage, which has increased the demand for houses, especially in areas like Sacramento and the Bay Area, where there are numerous job opportunities. Interestingly, however, there has also been a 16% decrease in the number of housing permits issued, and home prices in many areas have decreased instead of increased.
Here is a breakdown of the state of California’s real estate industry in each of the four regions.
The California Coast
California’s most infamous coastal cities include Los Angeles, San Diego, San Francisco, and Long Beach. San Diego is particularly worth mentioning because it has become rapidly grown into a tech hub. Blueprint Equity and Torrent Ventures are two tech startups that have based their operations in San Diego. San Diego’s growing tech industry has contributed to skyrocketing real estate prices.
The California Deserts
There are three regions of the California deserts: Death Valley, the Mojave Desert, and the Colorado Desert. The area is characterized by minimal rainfall and high humidity. The most popular California Desert cities include Lancaster, Palmdale, Apple Valley, Palm Desert, and Palm Springs. Despite the heat and humidity, real estate prices are on the rise in Palm Springs. This is partially due to the fact that there are so few houses on the market, which makes it difficult to meet the demand for housing in the region.
The California Central Valley
The most popular cities in California’s Central Valley include Sacramento, Chico, Redding, Fresno, and Bakersfield. The area, in general, is becoming extremely popular for renters, so your primary target demographic here most likely will be real estate investors who are looking for investment properties rather than homes that they can move into. Home prices in Sacramento, in particular, have been increasing, and this trajectory is expected to continue well into 2020 and beyond.
The California Mountains
California’s most popular mountain cities are Sierra Nevada, Santa Barbara, and South Lake Tahoe. The Sierra Nevada is particularly popular with Millennials, while Santa Barbara has seen an 11% increase in property sales and the price of Lake Tahoe homes has been on the rise.
Do I need to get a California real estate license?
In a nutshell, yes. But it’s important to note that a real estate license isn’t something that’s just unique to California. It’s a requirement if you want to legally buy and sell properties on behalf of clients in any state.
The acronym I-C-E can help you understand the importance of a California real estate license.
I – Indicates that you have the right training and education.
Real estate sales is an art. There are superficial skills that you should acquire in order to be deemed competent to perform optimally in the field. Formal education from a reputable California real estate school is necessary.
You will:
- Learn strong negotiation skills
- Develop a keen eye for detail
- Gain a strong understanding of California’s real estate industry
- Master some of the best sales techniques
Getting a California real estate license shows that you have gone to school and done the work to gain the requisite knowledge in these core areas.
C – Credibility increases.
It follows that since a California real estate license provides proof that you have the required knowledge and skills to buy and sell real estate in California, your credibility increases. Clients are more likely to trust you when you have a real estate license.
E – Ethical standards are a part of your brand.
Ethics and standards govern all real estate industries. Real estate agents are required to conduct themselves with a level of professional decorum that doesn’t bring the profession into disrepute. Your California real estate license is proof that you understand the ethics and standards that govern California’s real estate industry and you abide by these ethics and standards.
What are the requirements to get a California real estate license?
There are two categories of a California real estate license: a salesperson license and a broker license.
A real estate broker in California tends to have a higher level of education than a real estate salesperson/agent in California. Most also have much more experience. As a real estate broker, you can work alone to help clients buy and sell houses, or open a real estate brokerage firm, where you can then hire real estate agents to work for you. Real real estate salespeople/agents are not able to do the same. While they are still able to help clients buy and sell houses, they are unable to hire others to work for them to do the same.
It is more beneficial for you to get a formal education in real estate from an accredited college or university so that you can get your broker license. After all, you will inevitably need to upgrade your skills if you plan to make real estate your long-term career.
One final thing to keep in mind, regardless of the type of license you pursue in your real estate career, is that in order to use the official designation of Realtor, you will need to join the National Association of Realtors, and follow its code of ethics.
Requirements for a Salesperson California real estate license
License requirements to become a real estate salesperson are listed below, in the order in which each step should be completed.
- Proof that you are 18 years of age or older
- Proof that you have completed 45 credit hours in Real Estate Principles education
- Proof that you have completed 45 credit hours in Real Estate practice education
- Proof that you have completed 45 credit hours in another state-approved real estate course
- Successfully passed the salesperson examination
- Filled out the Salesperson License Application, and paid all the required feed. This can only be done after you have passed the salesperson’s exam.
- Submitted the Live Scan Request form
Once you have your California Real Estate Salesperson license, it’s important to note that you are only allowed to work for only one California real estate broker at a time. And you will need proof that this employer is your sponsor.
Requirements for a Broker California real estate license
License requirements to become a real estate broker are listed below, in the order in which each step should be completed.
- Proof that you are 18 years of age or older
- Either a 4 year accredited degree with real estate as a minor/major OR at least 2 years of experience as a full-time licensed California real estate salesperson within the past 5 years
- Completed the required courses. There are 5 mandatory courses and another group of 10 courses, from which you must choose 3. This requirement is only applicable if you do not have an accredited real estate degree.
- Passed the written state exam
- Filled out the original Broker Examination application, and submitted an official transcript if you have a 4 year accredited degree
One important thing to note is that if you have a criminal record, either application may be declined, regardless of whether you meet all the aforementioned criteria. Each case is investigated individually to determine if the conviction is grounds for denial of a California real estate license, however.
How long does it take to get a California real estate license?
The length of time it takes to get your California real estate license depends on your level of qualification, as well as whether you are applying for a salesperson or a broker license. In general, the process usually lasts between 5 and 6 months, regardless of the type of license you are acquiring, provided you have the necessary prerequisites.
Factors that contribute to how long it takes to get a California real estate license are:
- How long it takes you to take licensing courses. You have three options: colleges/universities, professional schools, and state-approved third parties. Each option differs in length, so the time it takes you to complete the course(s) will play a contributing factor in how long it takes for you to get your California real estate license.
- Whether you pass the state licensing exam on the first attempt or have to take it more than once. The pass rate is estimated to be between 42 to 45 percent for the broker real estate licensing exam and between 49 to 60 percent for the salesperson real estate licensing exam.
Which real estate education option is best?
There are three types of real estate education options. The option you choose will depend on the amount of time you have to commit to real estate education, as well as your financial resources.
State-approved third-party real estate programs
There are some California private vocational schools, such as Kaplan Real Estate Education, that offer California Department of Real Estate-approved pre-license education courses. The beauty of a school such as Kaplan Real Estate Education is that you have four possible delivery methods:
- On-demand online video packages
- Home study packages
- Live online package
- Live classroom packages
You can pay for each course as needed and work at your own pace. The cost per package ranges from $149.00 to $1099.00.
One of the major downsides to a third-party real-estate program is that you have to do your due diligence to ensure that the program is approved by the California Department of Real Estate. If you don’t, you may find yourself in a position where you’ve done a lot of coursework through a non-accredited program, and the state of CA won’t accept it. Many colleges/universities and professional schools will let you know from the get-go that the courses or programs are approved.
Professional schools
Professional schools are similar to third-party real estate programs, with two exceptions:
- They provide full-length real-estate programs
- They can be state-owned, although they usually aren’t
Colibri Real Estate (formerly Real Estate Express) is an example of a professional real estate school in California. You can choose from two packages depending on your needs. The Basic package costs $119 and is ideal for someone who already has real estate experience. The Exam Prep package costs $225 and is perfect for someone who needs in-depth help in preparing for the licensing exam. Once again, always verify with the California Department of Real Estate to make sure the professional school and its courses are approved.
Colleges/Universities
Colleges and universities offer full-length real-estate degree programs that can range from 2 to 4 years. The best part of a college/university program is that you can combine a real estate degree with another area of interest. For example, you could major in real estate and minor in business law or major in marketing and minor in real estate. By taking this approach, you would have a broader knowledge base by the time you graduate.
The University of California and California State University are two of the California Department of Real Estate-approved colleges/universities. College-level courses in real estate range from $600 to $5,000 each.
How should I prepare for the California real estate licensing exam?
The California real estate license exam lasts for 3 hours and 15 minutes and consists of 150 multiple-choice questions. It’s in electronic format and can be taken at sites in Fresno, La Palma, Oakland, Sacramento, and San Diego.
The California real estate broker licensing exam lasts for 5 hours and is divided into 2 sessions: a 2 ½ hour morning session and a 2 ½ hour afternoon session. 100 multiple-choice questions are administered in the morning session, and another 100 multiple-choice questions are administered in the afternoon session.
Seven areas are covered in both exams:
- The Practice of Real Estate and Disclosures
- Laws of Agency and Fiduciary Duties
- Property Ownership and Land Use Controls and Regulations
- Property Valuation and Financial Analysis
- Contracts
- Financing
- Transfer of Property
Tips to prepare for the California Salesperson real estate licensing exam
- Enroll in an online or face-to-face program with qualified instructors who will help you learn the content
- Download mobile apps designed to help you prepare for the exam. Pocket Prep is one such app.
- Use study guide booklets
- Dedicate a few hours each day to study and practice
- Be calm on exam day and read each question carefully. Multiple-choice questions are designed to trick you, so don’t rush to answer them.
How do I maintain my California real estate license?
Your California real estate license must be renewed every 4 years, and the type of license, nor whether it’s a first time or subsequent renewal, doesn’t matter. Continuing education is a part of the renewal requirement, and the amount of continuing education you’ll need to take depends on the type of California real estate license you have.
First time renewal of a real estate Salesperson license
To renew your salesperson license for the first time, you will need to have logged 45 hours of continuing education credits as approved by the California Department of Real Estate. These continuing education requirements are broken down as follows:
- 3-hour courses in each of the following areas: Ethics, Agency, Trust Fund Handling, Fair Housing and Risk Management
- At least 18 hours of consumer protection courses
- 12 hours or less of consumer service or consumer protection courses
First time renewal of a real estate broker license
To renew your broker’s license for the first time, you will still need to take 45 hours of continuing education classes, most of which will be very similar to the requirements of a salesperson license. The main differences are that you’ll only need to take 9 hours of classes on consumer service and consumer protection, and you’ll need to need to take a 3-hour course on Management and Supervision.
Subsequent renewals of a real estate salesperson or broker license
After your first renewal period, you’ll still need to keep up with continuing education if you want to maintain your license. This includes 45 hours of continuing education, as approved by the California Department of Real Estate, which must be taken during. These hours are broken down as follows:
- An 8-hour survey course that includes Ethics, Agency, Trust Fund Handling, Fair Housing, Management and Supervision, and Risk Management. You can also choose to do a course in each of these areas separately.
- At least 18 hours of consumer protection courses
- The remaining hours are at your discretion in consumer service or consumer protection courses
Putting it all together
A California real estate license is mandatory if you want to become a real estate agent in the state. Real estate training is required and it may work out better for you to get an accredited real estate degree from a local university or college. This degree can help you become a real estate broker in California and have the independence to build your own real estate brand.
It’s also important to consider what you’ll do once you have your California real estate license. Remember that experience is important and you should renew your real estate license every 4 years. Let your passion for real estate motivate you to become a leading real estate agent in California.