How to Get a USA Real Estate License in 8 Simple Steps

For ages now, real estate has been on the increase in terms of worth and value. it’s no secret that real estate is a goldmine on its own, and that is a fact. So, you’ve decided to become a real estate agent?

That’s good news for you because, in this article, we will show you a detailed guide on how to get a real estate license in 8 simple steps.

Have you gotten the required knowledge you need to succeed in the real estate industry? if yes, then Congratulations! It’s time to get to work. 

There were more than 1.46 million realtors in the U.S. as of 2020, and that number is only increasing with the housing market frenzy in 2021.

Selling real estate is undeniably an attractive career for many people because of the flexibility, autonomy, and of course, the huge pay. Realtors, on average, earn a salary close to the US average of a little more than $80k.

However, there is virtually no limit to the amount of money a realtor can make. Once a real estate agent completes the licensing requirements in their state, the sky is truly the limit.

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What is Real Estate?

Real estate is simply a property or properties that consist of land and the buildings on it, along with its natural resources such as crops, minerals, or water; immovable property of this nature; an interest vested in this item of real property, buildings, or housing in general.

Types of Real Estate

To begin, there are several types of real estate, each with a unique purpose and utility; But the main categories are:

1. Land
2. Residential
3. Commercial
4. Industrial

If you are really looking to understand how the industry works and what each of the major categories represents, the explanations below will be a very helpful guide to your understanding.

#1 Land

The land is known as a baseline for all types of real property. When we say Land, we are typically referring to undeveloped property and vacant land.

When developers acquire these lands and combine them with other properties it is called assembly; They can rezone it so that it can increase the density and value of the property.

#2 Residential

Residential real estate mainly consists of housing for individuals, families, or groups of people. This type of real estate is the most common type of estate seen today and it is the asset class that most people are familiar with.

In this residential type of real estate, there are single-family homes, apartments, condominiums, townhouses, and other types of living arrangements.

#3 Commercial

A commercial property refers to a land or buildings that are used by businesses to carry out their operations. Examples of these commercial properties include shopping malls, individual stores, office buildings, parking lots, medical centers, and hotels.

#4 Industrial

Industrial real estate refers to a land or buildings that are been used by an industry or industrial businesses for activities such as factories, mechanical productions, research and development, construction, transportation, logistics, and warehousing.

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Real Estate Agent Qualifications in the USA

I believe similar rules and guidelines do apply in other several parts of the world; But here in the United States of America, the process of getting a license in the USA.

The qualification requirements, the cost, and the timeline for becoming a licensed agent in the US differ from state to state.

What is a real estate license?

A real estate license allows real estate agents in any part of the world to legally sell, broker, or rent real estate to prospective tenants and buyers on behalf of a real estate brokerage.

As a serious agent, you will definitely need a real estate license to do this work properly and legally, and the requirements to obtain one vary from state to state.

Real Estate License FAQ

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How To Get a Real Estate License

Step 1. Do A Quick Research About Your State’s Licensing Requirements.

The requirements for your education, examination, and licensing will definitely be different from every other state in the country.

You need to do a careful research and study of your real estate commission to better understand what is required of you to obtain your license.

Most states do require the following things:

• A college-level training on real estate basics including titles, deeds, contracts, and property ownership
• You need to be a Permanent resident in the state of the license application
• Minimum age of 18 years or older
• You must pass a criminal background check

Classes are both available in person and online, but the courses and school you choose must be approved by your state’s real estate licensing authority.

It is very important for you to confirm that your school is accredited by your state before you pay for real estate school fees.

Carry out a Real Estate License Reciprocity

Let’s assume that you are a licensed real estate agent who is moving across state lines, it’s important for you to see if the new state you are moving to has a reciprocity agreement with the state where your license was issued.

If you can successfully find a reciprocity agreement in the said state, then there’s a good chance that you already meet the pre-licensing requirements.

What this means is that you will be able to skip a step or two in the licensing process.

If you have a degree in real estate or maybe you are a licensed attorney, then your pre-licensing requirements will definitely be less.

2. Get Proper Training and Education

To become a qualified real estate agent, you will need to dedicate your time, energy, and financial resources to achieve it. That means you must have everything you need in place before you begin this great journey.

For instance, some of the pre-licensing schools do meet for a number of classes, while others will allow you to move through courses at your own pace. It is always wise to know what your options are, and also to be able to choose the one that is right for your lifestyle and schedule.

Real Estate License Education Time requirement difference for states in the US:

STATE	HOURS
Alabama State	60
Alaska State	40
Arizona State	90
Arkansas State	60
California State	135

3. Register For A Real Estate Licensing Exam in Your State

When you are satisfied with the real estate training and education you have received, then the next thing for you to do is to signup for the examination in your state.

The examination will require you to pay an application fee and also for you to register the test through a third party, like PSI Exams.

For so many states, you are not necessarily required to complete all your required education hours before even applying for the examination, as a result of this.

There’s a chance that you can speed up your application time by applying while still observing the required education hours.

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4. Pass Your Licensing Examination

This part sounds easy, right? Well, there are reasons why each state requires training and education before sitting for the licensing examination.

This training is in place to ensure that you’re well prepared for the examination, and also, you do have a much higher chance of passing the exam than someone who tries to guess through the test.

The licensing exam or test includes about 100 multiple-choice questions and it normally covers both national and state principles and laws.

Many states will require a minimum of a 70% score on the exam to earn your license, but you have to know that different states have different requirements, so try and do your research about your state.

For the licensing exam, it usually takes between 1hr to 3hrs to finish; so you should be well prepared at every level.

After you complete your examination, make sure to obtain an official real estate transcript or certification of completion from the school you wrote the exam in, and also get a copy of your exam score.

You will need to include this score and other important details during your real estate license application.

5. Apply for Your Real Estate License.

Now that you have successfully passed your real estate licensing exam, it’s time to start your licensing application properly.

To begin the process, you need to submit your real estate license test results to your state for evaluation. After that, pay your application fees and submit all the required documents and details.

By default, the license application will cost between $50 – $250, and you will probably be required to undergo a background check; this can cost you between $40 and $100.

At this point, you need to check in with your state’s real estate commission and make sure that you do not have any Errors and Omissions.

You can easily do that with the Errors and Omissions (E&O) insurance. This E&O insurance will protect you as a real estate agent from any financial loss and lawsuits filed as a result of your real estate work.

Your brokerage might sell you E&O insurance, but in the case where you need to get it yourself, then read my previous article on Errors and Omissiona Insurance to learn how to get one for yourself easily.

All the states will definitely require you to be at least 18 years old and have either a GED or high school diploma before you can apply for a real estate license. Also, you have to be authorized to work in the United States and then be an in-state resident for most states.

Once you’ve submitted your licensing application, all you need to do is wait for it to be processed, which will take 1 – 2 months to process.

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6. Find a Good Real Estate Brokerage.

A big Congratulations to you now that you have successfully gotten your real estate license; But, that does not really mean you can start off on your own as a real estate agent, at least in most states in the US.

It all depends on your state though, but generally, you will be required to work with a real estate broker who will sponsor you for a few years as an agent.

What is a Real Estate Brokerage?

It can be defined as an agency or office where real estate agents come together to work before they can stand on their own.

This is mostly because you will need to generate income as a beginner before you learn to stand on your own. It’s actually wise to find a good broker before you even graduate from your training course.

Here are a few things you need to consider when choosing a brokerage:

There are 3 Types of Brokerages

It’s important to note that the type of brokerage you work with will definitely determine the type and volume of real estate work you do as an agent. It influences the training and mentorship you receive, and also the company culture you’re a part of every day.

So here are the 3 common types of brokerages you should look out for:

1. National Franchises

A National franchise is like Keller Williams Realty, and Coldwell Banker for example, which provided structured training, instant name recognition, and also many other resources for new agents to utilize and grow.

2. The Boutique-Style Brokerages

A small or local brokerage may be able to provide some form of personalized training and more room for growth and advancement.

3. Virtual Brokerages

Using Software as a Service (SaaS) has ushered in a whole new level of real estate brokerage the unique thing about it, is the fact that it is entirely online.

There are lots of benefits to working with a virtual brokerage, and some of the benefits include higher commission splits, lower desk fees, faster and better technology, etc.

Types of Brokerage Commission Structures

There are a few things you need to know before you accept an offer from any brokerage, you need to review their commission structure and make sure it’s something reasonable.

Here are some common structures you should look out for before accepting any brokerage offer:

1. The Traditional Commission Split Plan

In this type of commission structure, you will get a 50% commission while your brokerage gets the other 50%. With this type of structure, there are usually little or no desk fees.

2. High-Split Plans

This type of brokerage commission structure will get you a higher percentage of earnings, around 70% to 100%. But this high commission rate usually comes with a high monthly desk fee depending on the brokerage agency you work with.

3. The Hybrid Commission Plans

The hybrid commission plan is actually a combination of the aforementioned two attributes above. This commission plan is usually offered to agents based on momentum.

They will get a 70% split at the beginning of the year and then the commission will increase to 100% when the agent meets certain monetary goals.

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7. Join the National Association of Realtors (NAR)

This is a big step for most agents, but not so many people understand the fact that you are not a realtor just because you have gotten your license and have gotten yourself a sponsor. That doesn’t make you a realtor.

To become a realtor, you will have to officially join the National Association of Realtors (NAR) before you can call yourself a realtor.

Again, something you should note is the fact that your earning potential may be as well limited if you are not a member of the NAR and you won’t really have access to MLS which stands for Multiple Listing Services.

8. Always Keep Your license Renewed

Remember that it took you a lot of work to get your real estate license approved, so it’s a wise thing for you not to let it expire on you; keep it renewed at all times. Most states will require you to renew it every 2 – 4 years; so it’s important for you to check your own state renewal timeline.

In some states, an agent may be required to complete some course hours to be eligible for renewal.

This course can take you 8 to 90 hours to complete, and I believe that the reason for this is to ensure that all agents are up to date with the national and state markets and regulations.

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Real Estate License USA At Your Fingertips

If you have decided to become a real estate agent, then you need to know that it is a very big decision that requires your time, attention, and dedication all the way.

The earning potentials and possibilities are unprecedented considering how you play the game. There are things that make you tick and heavy as an agent.

You have to understand the fact that success does not just happen overnight, it takes time and consistency coupled with the hunger for success; huge success!

Note: This article on real estate, does not constitute legal advice. The steps required to obtain a real estate license may differ from state to state, so you should seek your own legal advice to ensure you follow the correct process.

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