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Selling real estate is a popular and lucrative profession for many people across the U.S. The rules vary from state to state about the requirements for obtaining a professional real estate license, so it is important to decide where you would like to assist people with buying and selling properties to ensure that you are licensed with the proper state or states in which you intend to start your new career in real estate.
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Here are the typical state requirements for becoming a licensed real estate agent in the U.S:
- Must be at least 18 years of age
- Must be a legal resident of the US
- Completion of required pre-license real estate school classes
- Successfully take and pass the state real estate license exam
- Background check and fingerprinting
- Sponsorship by a licensed broker
It is also helpful to be familiar with the term real estate agent versus Realtor and to know that not every real estate agent is in fact, a Realtor. While both must be licensed to assist people in buying and selling properties, the Realtor title is only given to real estate agents that are also a member of the National Association of Realtors. Most new real estate agents find that it is advantageous to become a member of the association, which is explained more in detail later.
Why you need a real estate license
All states require you to be a licensed real estate salesperson or real estate broker to represent buyers and sellers who want to buy or sell a home.
Real estate licenses are issued by the government of each individual state. The state real estate license allows you to represent buyers and sellers in all legal real estate property transactions. To become a licensed real estate agent in your state, you must first be able to meet the state eligibility requirements, which are listed above, and may vary from state-to-state. When you are certain you qualify, you must then take all of the approved pre-licensure classes, successfully pass the real estate agent exam, find a broker to sponsor you, then finally apply to the state’s governing real estate board for approval and licensing. After approval, most new agents join the National Association of Realtors to add the prestigious title of Realtor to their credentials, which also gives real estate agents the following perks:
Perks of being a licensed realtor
- Increases your earnings
- Real estate software
- Gives you access to the multiple listing service (MLS) to view all homes available for sale
- Shows your credibility and helps you gain trust with clients and investors
How to get a real estate license
From pre-licensing courses to continuing education classes, the more you know about real estate in your state, the more successful and lucrative your career as a real estate salesperson or real estate broker will be. Although each state does have different classes and hour requirements, many follow these general rules about how to become a licensed Realtor. Here are the necessary steps needed to teach you how to get a real estate license in 2020.
A successful career in real estate starts here
The cost of real estate school and continuing education classes and requirements differ from state to state, so make sure you check costs for the pre-licensing real estate school classes, registration to sit for the real estate license exam, and the application fee for the license so you will know exactly what to expect. New agents should be aware that they will be required to seek a real estate broker to sponsor them as they are getting started in their new career, which is typically a requirement for new real estate agents. You can find important information about the necessary sponsorships and other important details from the real estate commission website for your state.
The cost of real estate classes varies by state and institution but typically ranges somewhere between $350 to $1,000. The cost varies due to the number of course hours required from each state that is needed to sit for the state real estate licensing exam. Here are some typical costs involved with obtaining your real estate license:
Costs associated with obtaining your real estate license
- Pre-licensing Education at Real Estate School – $200 to $1,000
- Real Estate Exam Registration – $25 to $100
- Real estate License Application – $75 to $175
Additional expenses might include any state-required items like background checks and fingerprinting, as well as test preparation classes and guides, which can also vary in cost in each state. Those who are interested in becoming a Realtor should be prepared to pay organization fees to the National Association of Realtors, which are $150 annually.
Real estate courses – Pre-licensing
To prepare for your real estate license, you must first take the pre-licensing classes needed to prepare real estate agents for the exam. All states require that these courses be taken before you can even think about registering for the exam. It is to be noted that each state’s required pre-licensing hours can vary greatly and range from 60 to 150 hours, so please plan you real estate coursework accordingly.
These professional courses provide a wealth of information to prepare you for a new career in real estate with classes that explain the important aspects of being a real estate agent including:
- Real Estate Investments
- Fair Housing Laws
- Finance and Mortgages
- Real Estate Law
- Real Estate Appraisal
In addition, there are additional courses designed to teach you about your specific state as well as all federal real estate laws and regulations.
Choosing a real estate school
When it comes to selecting a real estate school, it is important to choose one that offers a state-approved pre-licensing course. Most states allow for convenient, online coursework for your real estate pre-licensing courses, including Arizona, Delaware, North and South Carolina, Idaho, Connecticut, New Jersey, Washington, DC, and Rhode Island. It is recommended that you take the online courses if your state offers them due to the fact that not only is it more affordable, but it is also so much more convenient.
Once you have chosen a state-approved real estate pre-licensing course, you can either register online to enroll or visit the school’s website along with the state’s real estate commission website for information, courses, location, cost, and other important enrollment information you will need to be aware of.
Preparing for the real estate license exam
You can sit for the state real estate licensing exam when you have completed the real estate pre-licensing courses and successfully passed the final exam for the course of study. You’re your time and ensure you know the materials and take the test when you feel like you have studied and are completely prepared to sit for the final exam. This can be scheduled online via your state’s real estate commission website.
You will be scheduled for the exam when you have completed the online registration with the state and will receive notification of your exam time, location, and date. Be sure to schedule your real estate license exam as soon as you can after the completion of your real estate school classes, because most states require that the exam be taken within a certain number of days of completing your coursework.
The exam will be timed, so be prepared to answer the test questions quickly, yet efficiently. Make it a point to answer the questions you are certain of and come back later to any that you are not sure of. This allows a higher percentage of correct answers on the exam. You will be notified about your test results online or via mail, depending on your state’s preference.
If you fail the exam, this may be frustrating, however, don’t fret, because you are allowed to retake the real estate exam. You can register to retake the test a mere 24 hours after notification of failure to pass the course. In addition, you can take the exam up to three times each year. Feel free to visit your state’s real estate commission website to register or to get more information.
You’ve passed the real estate exam – Here’s what to expect next
You are now well on your way to becoming a licensed real estate agent. Once you have successfully taken the real estate exam and passed, most states require that new real estate agents find a broker to sponsor you.
Having a broker sponsor you gives you the hands-on training and experience needed to be successful in the industry. It is recommended that in order to successfully find a sponsor that is a good fit for you, make time to review brokers in your area, and schedule sponsorship interviews with each of them. Here are some questions you should be prepared to ask your potential broker during the interview:
Interview questions a new real estate agent should ask their prospective sponsors
- Commission Split – Since most real estate agents get paid on commission, it is important to know that you will be splitting the commissions with your broker. There are several different types of commission structures, so be sure to discuss and possibly negotiate a commission split that satisfies your needs.
- Support and Culture – There are many variations of types of brokerage firms, so look for the style that suits you best. While some brokers offer extensive mentoring and free training and marketing opportunities, others simply offer an office to call home while you grow your real estate business. Ask questions to help determine if the broker offers what you are looking for.
- Fees and Other Costs – Make it a point to ask the real estate brokers you are interested in working with about any fees and other costs that are associated with their company. Do your research to ensure that the fees are common in the industry. Such costs may include desk fees, printer and copier fees, transaction fees, insurance, and more.
Doing your homework and asking these important questions will not only help you learn about each broker and their pertinent company information, but it will also help you make an educated decision and choose a broker that is a good fit for your goals. Having a broker that you will enjoy working and mentoring with makes all the difference.
It is important to note that new agents must have a sponsoring broker before the application for a license can even be submitted to your state’s real estate commission. After you have chosen a sponsoring broker and have a signed sponsorship agreement to submit, you are ready to submit the agreement and application for your license to the real estate board. It can take anywhere from a couple of weeks up to a few months for the application to be approved, depending on your state’s period of consideration. When the board has approved your real estate license, most states send out an email confirmation, followed by the license and official approval letter in the mail.
I’m a licensed real estate agent, now what?
You have passed your real estate exam, secured an agreement with a sponsoring broker, and have received notice of the approval of your license – so it is time to get to work helping people buy and sell homes! Here are a few tips to help you get started in your new career as an agent.
- Join Industry Associations – It is crucial for your career in real estate to join the National Association of Realtors (NAR) as soon as you can. The NAR is the largest professional association for Realtors in the U.S. While becoming a member is not a requirement to buy and sell real estate, it is required to list properties and have access to the Multiple Listing Service. In addition, the NAR offers a variety of agency resources, including valuable networking opportunities, real estate software, continuing education resources, and a special designation among agents. To join the National Association of Realtors, visit their website for the application, and pay the annual membership dues of $150.
- Create a Website – Real estate agents will need a website of their own. It is important to plan for the expense of having a website designed for your new career in real estate in addition to the one your agency has. Maintaining your own business website allows you to create your own brand and get your name out there. This includes choosing a domain name, designing a logo, finding a website host, selecting a theme, and ensuring you are connected to a hosting company with IDX capabilities, which allows you to connect to the MLS so your website visitors can easily search the available property listings for sale.
- Select a Contact Relationship Manager – As a real estate agent, you will need a customer relationship management (CRM). This is a type of software that helps you keep track of your leads and organize clients from first contact all the way through to the closing. Choosing a good CRM allows you to stay organized and engaged with your client leads and track the progress you have made with them as clients. Look for a good free CRM to get started and graduate to a paid service once you have clients. Make sure that your new CRM is easy to use with popular features to keep you as efficient as possible.
Maintaining your real estate license and keeping an active status
Just about every state requires a real estate salesperson to renew their real estate license every two to four years. This requires continuing education courses in real estate to make sure you are up to date with any new laws, rules, or regulations. Your state real estate commission website can provide the necessary requirements for maintaining your real estate license and keeping it in an active status. In addition, members of NAR can find useful information about requirements and continuing education courses in your area.
Your career as a licensed realtor
From required pre-licensing courses needed to pass the state real estate exam to finding a sponsoring broker, and creating a new brand, there are many things a prospective new real estate agent must do to prepare themselves for a successful career in real estate.
Savvy potential real estate salespeople begin by learning all of their state’s licensing requirements about how to get a real estate license. They then make a professional plan from there to complete real estate school for the required pre-licensing classes, pass the licensing exam, find a broker to sponsor them, and secure their real estate license for a successful career in the real estate industry.