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Real Estate | Ultimate Guide

Real Estate License Reciprocity & Portability Guide

Gina Baker

WRITTEN BY: Gina Baker

Published July 20, 2021

Gina is a licensed real estate salesperson, experienced trainer, and former high school educator of 1,000+ learners. She writes for Fit Small Business with a focus on real estate content.

This article is part of a larger series on Real Estate Agents.

TABLE OF CONTENTS

Real estate license reciprocity gives licensed agents the opportunity to secure a license in a new state without completing all licensing requirements. Real estate portability lets out-of-state agents conduct transactions within specific states, based on local laws. To help agents understand both of these, we compiled license reciprocity and portability rules for all 50 states.

What Is Real Estate License Reciprocity?

Real estate license reciprocity is an agreement between multiple states allowing licensed real estate agents to become licensed in a different state without taking additional real estate prelicensing courses or, in some cases, taking a licensing exam.

Keep in mind that a reciprocity agreement doesn’t necessarily allow a real estate salesperson or broker to take part in real estate transactions in a reciprocal state without a license in that state. Most commonly, it means that the requirements for licensing are reduced. For example, agents might need to take a few hours of classes from an accredited online real estate school like Real Estate Express to secure a license in a new state. Check with your state’s licensing board for specific requirements.

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Types of Reciprocity Agreements

Reciprocity is state-specific, so the rules and requirements for reciprocity are unique in every state. However, there are generally three different types of reciprocity agreements, as follows:

  • No reciprocity: States that deny reciprocity to all out-of-state licensees
  • Partial reciprocity: States that require limited education and examination for agents from only certain reciprocal states.
  • Full reciprocity: States that allow you to transfer your real estate license from any state, typically requiring completion of the state portion of the real estate exam.
Real Estate License Reciprocity & Portability Map Guide
No Reciprocity
Partial Reciprocity
Full Reciprocity
  • Arizona
  • California
  • Hawaii
  • Indiana
  • Kentucky
  • Michigan
  • Montana
  • New Jersey
  • South Dakota
  • Texas
  • Vermont
  • Wyoming
  • Arkansas
  • Connecticut
  • Florida
  • Idaho
  • Illinois
  • Iowa
  • Louisiana
  • Maryland
  • Massachusetts
  • Minnesota
  • Nebraska
  • Nevada
  • New Hampshire
  • New Mexico
  • New York
  • North Carolina
  • North Dakota
  • Ohio
  • Oklahoma
  • Oregon
  • Pennsylvania
  • Rhode Island
  • South Carolina
  • Tennessee
  • Utah
  • West Virginia
  • Wisconsin
  • Alabama
  • Alaska
  • Colorado
  • Delaware
  • Georgia
  • Kansas
  • Kentucky
  • Maine
  • Mississippi
  • Missouri
  • Virginia
  • Washington

We go into more detail about each state’s individual reciprocity agreements at the end of this article. Reciprocity agreements offer the greatest benefit for agents who are permanently moving to another state or are in proximity to two states: for example, New York and New Jersey. Agents who have no intention of moving to another state but want to still be able to conduct the occasional out-of-state real estate transactions are more affected by portability laws.

What Is Real Estate License Portability?

Real estate license portability describes state laws allowing out-of-state real estate agents to engage in real estate transactions without having to get a real estate agent license in a neighboring location. It is different from reciprocity because it allows agents to cross the border of their home state for real estate business, but it is not intended as a long-term solution for agents relocating to a new area.

In general, there are three kinds of portability laws: cooperative, physical location, and turf states. Each of these classifications requires different circumstances under which an out-of-state real estate agent may work within the state.

Classifications of License Portability

There are three major classifications of real estate license portability.

1. Cooperative State

Cooperative states allow out-of-state real estate agents or brokers to physically enter the state to conduct real estate business. This includes property showings, closings, negotiations, and other stages of real estate transactions. However, for out-of-state agents to work in a cooperative state, they must have a cobrokerage agreement with a licensee of that state.

There are cooperative states covering all geographic regions, which includes states like Alabama, Colorado, and Washington. Keep in mind, however, that some cooperative states, such as Michigan, place limitations on out-of-state agents. You should always familiarize yourself with local requirements before committing to a client looking for property in a cooperative state.

2. Physical Location State

A physical location state allows agents and brokers to conduct business in another state but doesn’t allow them to enter the state for the purpose of conducting real estate business. This means that an agent or broker from another state must conduct all out-of-state business remotely and may not enter the state for showings, closings, or any other reason.

For example, in a physical location state, you can send your clients to view properties, submit offers on their behalf, and negotiate transactions as long as you physically remain in the state in which you are licensed.

3. Turf State

A turf state does not allow out-of-state agents or brokers to conduct any business in their state, either in-person or remotely. The only option to work with clients in a turf state is to refer them to a licensee of the turf state. There are seven turf states: Kentucky, Missouri, Nebraska, New Jersey, New Mexico, Pennsylvania, and Utah.

If you have a lead who wants to buy or sell property in a turf state, your options are limited. If you work with a brokerage that has offices in multiple states, refer your client to someone in the appropriate turf state office.

Tips for Conducting Real Estate Business in Other States

While building your business in other states may mean more commissions, there are many nuances to the process. First, make sure you protect yourself with a buyer or seller agreement in all cases. Also, know your local laws and, if regulations and client needs are too complicated, consider referring that client to someone local.

Consider a Buyer or Seller Agreement

Conducting business for clients who are buying or selling property in another state can be tricky because local agents may try to poach their business. Unless you have a great relationship with your clients, consider requesting an exclusive buyer or seller’s agreement. Remember that most exclusive buyer or seller’s representation contracts are only valid in the state in which you’re licensed—not out-of-state.

Know the Reciprocity & Portability Laws

Out-of-state real estate practices can be complex, but you can look into state-specific license reciprocity and portability laws to determine whether you need to refer a client. Some states offer reciprocity with all states while others have reciprocity agreements but require state-specific real estate courses. Meanwhile, some states have agreements with a limited number of states or none at all.

Consider Referring Business to Local Licensees

Assisting clients with out-of-state properties can be difficult unless you’re extremely experienced, have a great lawyer, or are being supervised by a broker experienced in out-of-state transactions. Transactions are complicated by convoluted reciprocity and portability laws, varying document formats, inconsistent recording requirements, and more. If you’re unsure, offer the client as a referral to avoid these problems and frustrations.

Important note: You should consult an attorney or legal counsel through a service like Rocket Lawyer before becoming involved in a transaction in another state. Failure to observe the law may result in loss of commission, or worse, jeopardize your license. The following guide is for informational purposes only and is not meant to be taken as legal advice.

Real Estate License Reciprocity & Portability by State

Look at the regulations for your state to see if you qualify for reciprocity as well as the proper forms and action you need to take to become a real estate agent in your state.

Bottom Line

Real estate license reciprocity and portability laws dictate how agents engage in out-of-state property transactions. If you have clients who want to buy or sell a property out of state, it’s important to understand local license requirements completely. Once you’re familiar with applicable state law, decide whether it’s best to complete the transaction yourself or refer the client to another agent.

About the Author

Gina Baker

Find Gina OnLinkedIn

Gina Baker

Gina is a staff writer at Fit Small Business specializing in real estate. Before joining the team, Gina worked as Head of Learning/Agent Development and as a real estate salesperson in NY and NJ. Those positions, coupled with her experience as a high school English teacher, formed her passion for an educational approach to writing and real estate.

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