In this guide, we’ll cover how to get a real estate license in 4 simple steps. The precise licensing requirements vary from state to state, but the basic steps outlined here are common to all states. We also include some state specific material. Here’s what you’ll know after reading our article:
- The 4 Steps to Getting Your Real Estate License
- What’s Next? – After Getting Your Real Estate License
- Maintaining and Renewing Your Real Estate License
- Real Estate License Cost
- Real Estate License Processing Time
How to Get a Real Estate License: 4 Steps
Step 1. Complete the Required Pre-licensing Courses
Here are pre-licensing requirements for the 6 largest states (if you don’t see your state on here, contact your state’s division of licensing services):
Real Estate Pre-Licensing Courses By State
|New York||75 hours of the following courses|
|California||9 semester credits or 12 quarter credits
(135 hours) of the following courses
|Florida||63 hours of the following courses|
|Texas||180 hours of the following courses|
|Illinois||90 hours of the following courses|
|Pennsylvania||60 hours of the following courses|
The pre-licensing curriculum varies among states, but most require about 60 to 75 hours of college level education in real estate fundamentals. Topics covered include fair housing laws, types of property ownership, fiduciary responsibilities, and more. There are also some basic math courses on how to calculate commission, price per square foot, real property taxes, etc. Courses mirror the state licensing exam by covering both national real estate principles and laws and state level information.
Once you obtain your license, most states require to you take 22 or more hours of continuing education courses every two years to keep your license active. More on this later.
Pre-licensing courses can usually be completed with live courses or online courses. Both types of courses can be taken at accredited educational institutions, such as community colleges and public universities.
Alternatively, you can take live or online courses offered by private companies such as Kaplan. Private companies must be approved by the state’s real estate licensing authority. Texas and California’s real estate licensing divisions have a listing of approved real estate courses on their websites. If you want to know if a particular company is an approved provider, contact your state’s licensing division.
The length of time you’re in class and the cost of the courses varies based on where you take the class. Take New York as an example. You could take a live real estate course at City University of New York’s Baruch College. The course costs $475 and meets for 10 sessions, spread out over a schedule of every weekday, 3 weekdays, or every weekend. Alternatively, a New York real estate online course from Kaplan costs $379 and can be completed at your own pace. We’ll cover costs in more detail in a later section.
To satisfactorily pass your pre-licensing courses, you must attend all classes and pass a course final exam. The course final exam will usually mimic the state final exam in content, format, time, and length.
Step 2. Pass the Real Estate Licensing Exam
Once you’ve taken pre-licensing courses, you’re finally ready to take your state licensing exam!
After you finish the courses, most states specify a time frame within which you must take the exam and obtain your license. For example, California mandates that you must wait at least 18 days after receiving course materials before you can take the exam. Florida says that pre-licensing courses are valid for two years for licensure purposes, so you must apply take your exams and file for your license within two years of finishing your pre-licensing education. For more up to date information in your state, contact your state’s division of licensing services.
The length of the exam varies from about 1.5 hours to 3.5 hours based on the state you’re in. In most states, you must answer 70% to 75% of the questions correct to pass.
The state exam will cover the same topics that are covered in your pre-licensing courses. The majority of states have multiple choice exams that test both national real estate principles and laws and state real estate principles and laws.
How Hard is the Real Estate Exam?
While I can personally only speak to the New York State real estate exam, many agents and brokers I’ve spoken with mentioned that they were a bit surprised at how hard the exam was. There is a lot of information to memorize, and if you don’t have a background in law, it’s not very intuitive. Take the class and your studying and exam prep seriously.
If you’d like to get an idea of the types of federal questions that are on the test, check out our in-depth guide to real estate practice exams here.
Here is a glance at exam requirements and formats for 6 of the largest states. If you don’t see your state listed here, check with your state’s department of licensing services or real estate licensing board.
Real Estate Exam Time, Format, and Pass Rates by State
|Exam Time||Number of Questions on Exam||Passing Score||Statewide Pass Rate|
|New York||1.5 hours||75 multiple choice questions on national|
and state real estate principles and laws
|70 % on course exam|
and state exam
|No data available|
|California||3 hours and 15 minutes||150 multiple choice questions on national|
and state real estate principles and laws
|60 % on course exam,|
70 % on state exam
|Florida||3.5 hours||100 multiple choice questions|
(45 on national real estate principles,
45 on national and Florida real estate law,
10 math calculations)
|70 % on course exam and|
75 % on state exam
|Texas||105 minutes for national portion|
and 45 minutes for state portion
|110 multiple choice questions|
(80 on national real estate
principles/laws and 30 on state
real estate principles/laws)
|70 % on course exam|
and state exam
|Illinois||3.5 hours||140 multiple choice questions||70% on the course exam and 70% on state exam||No data available|
|Pennsylvania||3 hours||110 multiple choice questions||60% on course exam and state exam||72%|
Don’t let these pass rates scare you. We’ve shown you the statewide pass rates, but they vary widely based on the quality of pre-licensing courses you take. For example, the Texas had a 76 % pass rate for students who took the Kaplan real estate course.
If you’re taking an online course, make sure that you keep up with your work and do practice tests. The schools that offer the pre-licensing courses will very often offer practice exams or a question bank as part of the curriculum. Also, taking the exam as soon as possible (while adhering to state-mandated waiting periods of course) after finishing your courses helps because the material is fresh in your mind. For more exam taking tips, read our guide to real estate exam prep.
Step 3. Submit License Application
Once you pass the exam, you must submit a license application to your state’s real estate board and pay any required application fees (a few states, such as California, ask you submit your license application before taking the exam). Many states also require real estate applicants to submit fingerprints for a background check.
Your license will usually be valid for two to four years before you have to renew it.
In order for your application to be valid, you should meet minimum age and residency requirements. All states require you to be at least 18 years old with a GED or high school diploma. Some states, such as Alaska and Alabama, set 19 as the minimum age.
You must be legally authorized to work in the United States, and a few states such as Texas require you to be an in-state resident. Most states, such as California, allow out of state applicants but have slightly different different licensing rules for such applicants. New York and Florida also allow out of state applicants.
Real Estate License Reciprocity Agreements
Real estate license reciprocity agreements allow you to obtain a real estate license in one state more easily if you already hold a license in another state. Reciprocity allows you to expand your real estate practice. Visit your state’s real estate board website to find out which (if any) states it has reciprocal agreements with.
For example, Florida has a reciprocity agreement with Georgia. You can get a Florida real estate license without taking pre-licensing courses and with a shorter exam if you already have a valid Georgia real estate license and reside in Georgia. If you move to Florida, then you must satisfy all the Florida licensing requirements. Here’s a list of the reciprocity agreements for the six largest states.
Real Estate License Reciprocity by State
|New York||Arkansas, Colorado, Connecticut, Georgia, Massachusetts, Mississippi, Oklahoma, Pennsylvania, West Virginia||Details|
|California||California does not offer reciprocity for any other states|
|Florida||Alabama, Arkansas, Connecticut, Georgia, Illinois, Mississippi, Nebraska, Oklahoma||Details|
|Texas||Texas does not offer reciprocity with any other states|
|Illinois||Colorado, Connecticut, Florida, Georgia, Indiana, Iowa, Nebraska, South Dakota, Wisconsin||Details|
|Pennsylvania||Arkansas, Georgia, Louisiana, Maryland, Massachusetts, New York, West Virginia||Details|
Step 4. Find a Sponsoring Broker to Associate Your License With
Even if you’ve passed your real estate exam and submitted your license application to your department of state, your license will not be considered “active” until you find a sponsoring broker. That means that until you associate your license with a licensed real estate broker, you can’t work as a real estate agent.
Don’t worry though. Since you will generally get paid strictly on commission, finding a broker to sponsor you is not very difficult. That said, be sure to do your research before associating your license with a sponsoring broker.
While I could write a book on choosing the right broker, there are a few things to keep in mind:
- What kind of training they offer – Since you’re just starting out, great training is incredibly important.
- Commission splits and desk fees – This is vitally important. Most brokers will pay out a 50% split for new agents. This means you will get 50% of every commission you earn. There are also desk fees and transaction fees. Be sure to ask them to tell you about all fees charged to get an idea of your net commission.
- Company culture – Is it s good fit? Do you feel comfortable in the office?
- Working for a large franchise – Large national franchise like Keller Williams, RE/Max, or Century 21 offer great training, name recognition, and other resources for new agents.. For an in-depth comparison of the best large franchise to work for in 2017, check out our guide here.
- Working for a boutique brokerage – Smaller “boutique” brokerages on the other hand can offer new agents more personalized training and mentorship, and sometimes more room for advancement.
If you’d like to learn more about choosing the right real estate broker to work for, check out our in-depth guide here.
What’s Next? – After Getting Your Real Estate License
Once you pass your exam, get your license, and associate with a brokerage, there are a few more things you can do before you actually start working to make sure you hit the ground running. Here are five steps you can take to make sure you’re ready to start working on day one.
1. Join the National Association of Realtors
Once you’ve taken your course, passed your exam, and found a sponsoring broker, you will need to join the National Association of Realtors. The National Association of Realtors is the largest professional association of real estate professionals in the country. They offer a common code of ethics, pre-defined rules that let you share deals with other realtors, and technology and educational resources that will be invaluable to your career development.
Membership in NAR is not a legal requirement, but in order to work successfully in the vast majority of the country, you’ll probably need to join. In order to participate in most Multiple Listing Services (MLS) for example, you need to be a NAR member. It would be almost impossible to make money in real estate without being able to participate in the MLS.
2. Building Your Client/Referral Portfolio
After getting your license, you can begin building your “sphere of influence.”
Put simply, these are the people in your life that you may have some degree of influence with. They or someone they know may want to buy or sell real estate in the future. Family, friends, and former colleagues should be in your sphere of influence. To get started building out your sphere, put them into an excel sheet or CRM software (Customer Relationship Manager) along with their contact info.
There a many ways to get clients as a real estate agent. An easy way to get started is to take advantage of your brokerage’s marketing and lead generation resources. Your brokerage may help you create good looking yard signs and put up online advertising. 45% of home buyers use online searches, such as Zillow.com or Homes.com, to look for listings, whereas only 23% rely on print advertising.
You can also ask other agents and brokers to refer prospective buyers and sellers to you in exchange for a referral fee. It’s typical to pay around 25% of your part of the commission as a referral fee.
If you’re curious (or worried) about how to generate leads after you’re already working, check out our guide on the top 39 real estate lead generation ideas. If you’re creative and work hard, you can make a great living in this industry. Bookmark the page and refer back to it once you’re set up with a sponsoring broker.
3. Research CRM Software
CRM (Client Relationship Management Software) allows you to collect, organize, and plan outreach out to potential clients. Since there is a wide variety of real estate specific CRM software to choose from, getting a head start on research means you can hit the ground running once you’re associated with a brokerage.
To learn more about the best real estate CRMs on the market, check out our in-depth buyer’s guide here.
4. Create Your Website
Though your brokerage will more than likely offer some kind of web presence, having your own personal real estate website is a must for all agents in 2017. After all, you may not stay long term with the first firm you associate with. That means you’re going to want to have a site that is independent of your brokerage.
The best way to build a real estate website in 2017 is on WordPress. While many people think WordPress is just for bloggers, it’s actually used by roughly 25% of all websites on the web. Sites like the New York Times, SONY america, and the BBC all run on WordPress. The reason is that it’s easy to use. Once you’re up and running, you can edit your site quickly and easily without having to learn how to code.
While there may be a bit of a learning curve, you will own the site outright rather than getting stuck paying a monthly fee like you would with turnkey real estate website services.
For step by step instructions, read our in-depth guide on how to build your own WordPress real estate website for only $3.45 per month (or less!).
5. Choose Your Farm Area
A farm area is when real estate agents focus their marketing efforts on a specific geographic area or demographic. There are many benefits to working a farm area as opposed to working in multiple areas.
First and foremost, both buyers and sellers value local market knowledge over almost everything else. In order to become a local expert, you need to find a farm area you’re comfortable working in. To learn more about choosing the right farm area, check out our in-depth guide here.
Maintaining and Renewing Your Real Estate License
Most states require you to renew your real estate license every few years. In order to renew your license, you’ll need to completed required continuing education real estate courses.
There are many different approved courses to satisfy your continuing education requirement. You can take courses on green building techniques, commercial real estate, and many other topics. Often, there is a required course on fair housing laws. All of these courses can help you become a better real estate agent.
Here are the continuing education requirements in New York, California, Florida, Texas, Illinois and Pennsylvania (contact your state’s division of licensing or real estate board if your state is not listed on here):
Number of Hours Continuing Education (CE) Courses
|New York||22.5 hours of CE courses every 2 years|
|California||45 hours of CE courses every 4 years|
|Florida||45 hours of CE courses in first two years of
license and 14 hours every two years thereafter
|Texas||90 hours in first two years of license and
9 hours thereafter before every renewal
|Illinois||30 hours every two years|
|Pennsylvania||14 hours of every even numbered year|
Real Estate License Costs
Getting a real estate license is an investment of time and money: it can cost about $400 to $1000 and can take 2 to 3 months. The main costs are:
- The license application fee (almost all states have an online application)
- A fingerprinting/background check fee
- The tuition for pre-licensing courses
- Examination fees.
Below is a table of licensing costs for a few of the largest states. As mentioned above, if you don’t see your state on here, call your state’s division of licensing or real estate board for information:
Real Estate Licensing Costs by State
|License Application Fees||Fingerprinting Fee||Typical pre-licensing course fees*||Exam Fees|
|New York||$50 for two year license||Not required||$379 to $449||$15|
|California||$245 for four year license||$49||$199 to $699||$60|
|Florida||$89 for two year license||Approx. $80||$198||$31.50|
|Texas||$215 for two year license (extra charge if you don’t submit application online)||$39.70||$499 to $899||$54|
|Illinois||$125 for two year license||Not required||$599||$46|
|Pennsylvania||$96 for two year license||Not required||$379 to $599||$54|
As you can see from this table, the cost of obtaining your real estate license varies based on state requirements. Florida, the cheapest of the 4 states we’re highlighting, costs $398.50. Texas comes in the highest at $1008.70. To compare these costs against salary, real estate agents earn on average about $35,000 to $45,000 per year.
The cost of online courses varies based on whether you want a live instructor-led course or prefer home study from textbooks. For California, for example, a home study class is $199, and an instructor-led live class with exam prep materials is $699. This is really a matter of personal preference and whether you are disciplined enough to study on your own.
Real Estate License Processing Times
Getting your license can take between one week to a month or more. The processing time shown in the table below is the time it takes for the state’s real estate authority to process your application. What it does not take into account is how long it will take to complete pre-licensing education. This will vary based on the type of course you take.
For example, if you do home study online course for California, you could take several months to finish the course at your own pace, or do it all in one week. In contrast, the live course ends in about 4 weeks. Another thing that can cause delays in obtaining your license is the fingerprinting and background check. This can sometimes take several weeks.
Real Estate License Processing Times by State
|New York||Instant online approval once your Broker confirms your application; 4-6 weeks for mailed applications|
|California||About 3 weeks to 1 month|
|Florida||About 4 weeks|
|Texas||About 7-10 days|
|Illinois||Illinois offers a Paperless License (E License) which is emailed to new agents after applying for their license. The process takes a matter of hours.|
|Pennsylvania||About 10 days|
The Bottom Line
Okay. Now that you have an active real estate license, you’re ready to start one of the most exciting and challenging careers available today. Your earnings potential is unlimited. You’re only bound by how hard you want to work, and having access to the right knowledge right from the start. Luckily, you know us. 🙂 If you want to get a head start on your real estate career, check out our real estate section here.
If you need more personal advice on how to get a real estate license, leave a comment below or send me an email. I love hearing from new real estate agents. Good luck!