Learning how to get a real estate license and starting your career in real estate is a straightforward process involving six steps: Take the required pre-licensing class, pass the state exam, register with the state you’ll be operating in, join a brokerage, join your local MLS, and finally, join the National Association of Realtors.
In this article, we’ll review the cost and time it takes to get a real estate license, walk you through each step necessary to get a real estate license, and answer some of the most frequently asked questions soon-to-be Realtors have about the process.
How Much Does it Cost to Get a Real Estate License?
The cost of getting your real estate license varies by state. You will likely need at least $1,000 to cover your pre-licensure class, test prep and exam, and application and membership dues. For example, the total cost for New York agents is about $1,158, while in Texas it is closer to $1,677.
Your MLS Membership will vary by your locality, we’ve estimated them at $600 for each state.
| Pre-License Class | |||
| Test Prep | |||
| Exam Fee | |||
| Application | |||
| MLS Membership | |||
| NAR Membership | |||
| TOTAL |
Pre-licensing and test prep costs we estimated using the offering of Real Estate Express.
How Long Does it Take To Get a Real Estate License?
The time it takes to go from nothing to fully licensed will depend largely on the state you’re trying to get licensed. You can estimate needing between six weeks and six months of pre-licensing training depending on how extensive your state requirements are.
Here’s an example of the expected timeline for three different states:
- Texas: Texas requires 180 hours of pre-licensing hours, which typically takes most online applicants about eight weeks to complete online. Add to that another week for test prep, a week for finding a brokerage, a week for application submission and approval, and the entire process takes about three months from start to finish.
- California: California requires 135 hours of pre-licensing hours, which typically takes most online applicants about six weeks to complete online. Add to that another week for test prep, a week for finding a brokerage and a week for application submission and approval, and the work takes just shy of two months to complete. However, due to mandatory educational waiting periods, the entire process actually takes close to six months.
- New York: New York requires a 75 hour pre-licensure class, which typically takes about four weeks to complete online. Add to that another week for test prep, a week for finding a brokerage, a week for application submission and approval, and the entire process takes about seven weeks from start to finish.
How to Get a Real Estate License in 6 Steps
How exciting, you’re taking the leap! Congrats, you’ve got a great new career in front of you. In order to get started with your big plans, first you need to know how to get a real estate license. Here are the six steps that get you to the start line.
Take a Pre-Licensure Course
Nearly every state requires at least 30 hours of pre-licensure study before an applicant is eligible to sit for the state real estate licensing exam. Why? A couple of reasons.
First, real estate is a relatively complex business, one that even veteran Realtors will tell you they’re still learning about every day. In order to get started in the business, there’s a minimum knowledge base you’ll need to properly operate. Make no mistake, you won’t learn all of that in your pre-licensure class, but you’ll come out of that session at least speaking the language so you can continue learning as you go.
Secondly, the buying and selling of real estate is often the biggest financial moment of a person’s life. As a Realtor, you’ll be tasked with caring for the needs of your clients, a task that would be reckless to take on if you didn’t know the best ways to help them. Again, you won’t leave your class knowing the best way to serve your clients in every situation, but you’ll have the basics, and you’ll continue to level up as your career progresses.
Below is a table outlining the pre-licensure hours required in five states in five different geographic regions in the country.
| State | Pre-license class length |
|---|---|
| California | 135 hours |
| Texas | 180 hours |
| Florida | 63 hours |
| New York | 75 hours |
| Michigan | 40 hours |
What Will I Learn in My Real Estate Pre-License Class?
This course will cover all the fundamentals necessary to launch your real estate career. You’ll cover basic operations like the listing and buying process, basic contracts and negotiation tactics, as well as what to expect on closing day.
The class will also cover the fundamentals of the home buyer experience, things like financing, taxes, and appraisals, items you need to understand as important to your clients, and thus important to you. There will also be a lot of content on property traits and characteristics, land and acreage measurements, and the math required to be successful in this industry.
Finally, you’ll also learn about the legal aspects of the real estate profession, things like fair housing regulations, disclosure guidelines, and agency policies.
Where Should I Take My Pre-Licensing Class?
There are lots of options for taking your pre-licensing classes. We suggest the online route. This option is generally cheaper than local in-person classes, much more convenient, and allows you to work at your own pace.
If you want to complete your real estate pre-licensing online, check out a company called Real Estate Express. They offer convenient online courses with different packages designed for different learning styles and needs.
2. Pass Your State’s Real Estate Exam
Once you’ve completed your state’s pre-licensure requirements, it’s time to take your licensing exam. The format of this test does vary by state, but most states now administer a computer based test.
What’s On The Real Estate License Exam?
Because each state administers multiple versions of the test, and each state is different, it’s impossible to say exactly what you’ll see, but there are a few topics that Realtors consistently tell us they see on the test.
- Fair Housing Law: This topic is one that you’ll spend a good chunk of time on in your pre-licensing class, so pay attention. Knowing these facts is important if you want to adhere with state and federal guidelines on discrimination and equal housing opportunities, so the test will hammer them.
- Basic Contracts: Contracts are a critical component to operating as a Realtor, so the basic rules for contracts and negotiations appear regularly.
- Real Estate Math: You won’t be asked to do anything more than arithmetic, but you’ll definitely be asked to do a lot of it. Understanding interest rates, percentages, and prorations will be put to the test in a number of questions.
Is the Real Estate Licensing Exam Hard?
If you aren’t familiar with the format or are feeling a little nervous, don’t worry. Spend some time with online test prep courses and take a few practice exams. This will set you up nicely for the test.
Can I Take the Real Estate Exam More Than Once?
Yes. If you don’t pass the test the first time around, you can retake it. Most states allow you to take the test up to four times in a calendar year, check with your state’s licensing authority to make sure you know the specific rule for where you live.
Pro Tip: Take as Many Practice Exams as You Can
Brett Ringelheim, Licensed Real Estate Salesperson, Compass Realty
“When I was preparing for my licensing exam I took over twenty practice tests. I found that the questions were almost always the same, just worded differently. Seeing that level of consistency from test to test gave me direction on what I needed to study more and confidence that I was going to perform on test day.”
3. Join a Real Estate Brokerage
Once you’ve completed your pre-licensure requirements and passed your state exam, it’s time to start thinking about where you want to work. Even though you’ve demonstrated to the state that you have the knowledge required to practice real estate, you still need a brokerage to sponsor you.
Why Do I Need a Broker?
In order to buy and sell real estate, every Realtor requires a broker to sponsor them. A Broker is a Realtor who has demonstrated that they not only have advanced knowledge of the industry, but that they also have a track record of success.
They’ve facilitated a minimum number of transactions every year, and now have an extra licensure (a broker’s license) that allows them to open a brokerage and manage other Realtors.
How Do I Choose the Right Brokerage?
While there’s no magic formula for choosing just the right brokerage, there are some important factors to consider when making your decision.
- Split: There’s no universal model for how Realtors divide each of their commissions with their brokerage (known in the industry as their “split”), so find a brokerage who’s offer works with your financial planning.
- Cap: There’s a maximum amount that a brokerage will take from your commissions each year through their split, known as the “cap”. Make sure the cap that a brokerage offers is in line with the value they provide for you.
- Desk Fee: Some brokerages will charge what’s called a “desk fee”, or a monthly fee for having you as a part of their team, regardless of how many transactions you close. These sorts of fees are fine for high volume agents, but can be a burden on new agents just getting their feet wet.
- Mentorship and Training: Most brokerages have in-house training programs designed to set their agents up for success, but not all these programs are created equal. Check to see if the materials and opportunities available to you align with your learning style and goals.
Can I Join Whichever Brokerage I Want?
No. Just as you’re looking for a place that will support your new career, brokerages are looking for agents that will represent their brand well, make them money, and ultimately allow them to continue to be a profitable business.
Some brokerages base their business on the volume of transactions, meaning they need every agent they can get since their median sale price is generally lower. These brokerages will generally will take just about any agent who applies to be a part of the team.
On the other hand, some brokerages build their reputations on high profile clients and properties that often fetch premium prices. In order to cater to this clientele, they are very selective as to which agents they bring on.
One way or the other, you are not just selecting a brokerage, they’re selecting you as well, so dust off those interview skills, you’re going to need them.
I Need Some Help Choosing the Best Brokerage For Me
Don’t worry, this part of the process can feel overwhelming because there are so many choices. We’d suggest starting with our article, “What’s the Best Real Estate Company to Work for in 2019”. We evaluate five of the top real estate companies in the country and break down the positives and negatives of each.
4. Register With the State You’re Practicing In
Once you’ve made a decision on a brokerage, the next step is to formalize your licensure with the state you’ll be operating in. This is a relatively straightforward procedure, something that most major real estate companies will walk you through.
It will involve submitting your personal and brokerage information, and in many states, completing forms for a basic background check.
What Will I Need to Do for the Real Estate License Background Check?
In most states, it’s a standard one or two page form you are required to complete, legally declaring your background is free from circumstances that would disqualify you from becoming a Realtor. Some states like California and New Jersey take this a step further and require a set of fingerprints in order to verify your statements and hold on file.
Though it varies state by state, most applications can be completed for between $100 and $300, and are usually processed within a week.
Am I Allowed to Work Before the State Has Granted My Application?
Until the state where you’re working has officially granted your operating status, you aren’t allowed to facilitate real estate transactions or act officially on a client’s behalf. However, that doesn’t mean you can’t get to work! There’s a LOT of other work to be done, including setting up your website, social media, creating a business plan, and getting your CRM up and running.
Pro Tip: Know How Your State’s Licensing System Works
Dan Silvert, Senior Sales Associate, Climb Real Estate
“Knowing which parts of the pre-license, exam, and application processes are automated and can be accessed online is a big help. When you are dealing with governmental bodies, trying to wade through a phone system can be soul crushing, bookmark the correct spots on the websites and get the info immediately.”
5. Join Your Local MLS
An MLS, or Multiple Listing Service, is an online database where Realtors share information about listed property. When you list a property for sale, all that property data, as well as price and terms are inputted here so that Realtors who are representing buyers can access it and match their buyers with properties. Joining the local MLS gives you access to this data and is vital your operation as a Realtor.
What Other Benefits Does MLS Membership Provide?
Many. First, in addition to access to the properties currently for sale, you have access to the historical data for properties that have already SOLD. This data will be critical when you’re putting together a comparative market analysis for buyers or sellers in order to accurately price a home.
You also get a roster of all the agents participating in that board, as well as access to mediation services, discounts on continuing education, and opportunities to participate in the leadership of your new industry.
Most local MLSs also include the cost of membership in your statewide Realtor association, as well as the National Association of Realtors.
6. Explore the Benefits of the National Association of Realtors
As we just mentioned, many local MLSs will roll the cost of your membership in NAR into their local fee, making you a de facto member of the club. Some local memberships require this membership as a part of their adherence to the NAR code of ethics.
Technically speaking, membership in the National Association of Realtors is not required to practice real estate. However, the benefits are far reaching and worth the cost. These benefits include many discounts with service providers, large scale lobbying, representation, and advocacy for real estate related issues on a national scale, and designations to help you specialize your business.
Also, the term “Realtor” is trademarked by the National Association of Realtors, so in order to call yourself a Realtor, you need to belong to NAR.
How To Get A Real Estate License: FAQs
Are There Legal Requirements For Getting a Real Estate License?
There are some legal requirements that all applicants must fulfill. These requirements will change slightly depending on the state you’re in, so make sure to double check with your state’s licensing and regulatory affairs commission to make sure you know every requirement.
Generally, the legal requirements for real estate licensure are as follows:
- Be 18 years of age or older
- Be legally allowed to work in the United States
- No pending criminal indictments against you
- No criminal convictions for violent or home invasion related offenses
It’s important to point out that the last two qualifying criteria, related to an applicant’s criminal background, are determined in most states on a case-by-case basis. A conviction doesn’t necessarily disqualify an applicant, but trying to hide something in the application process almost certainly would. The application determination process has a character component to it; act with integrity, own your mistakes, make a fresh start.
Should I Be a Full Time or Part Time Real Estate Agent?
Choosing between becoming a part-time or full-time real estate agent is an important decision. Remember, there’s no salary for real estate agents, everything you’ll make is based on commission. If you’re relatively risk averse and want to test out this career before making the leap, we suggest you check out our article on becoming a part-time real estate agent and see if this is the best path for you.
If you have a full and diverse sphere of influence, an entrepreneurial spirit, and already have some sales experience, jumping in full-time sounds like it would be just the ticket.
How Can I Become a Successful Realtor?
Real estate is a field that requires constant learning in order to maintain success. Find a mentor or a set of mentors who you can ask questions of, bounce ideas off of, and get advice from. Your broker is a great place to start in that search, and can direct you to other agents within your firm that might have some good words to share.
Also, be ready to embrace change. Technology is changing the real estate industry quickly, from how we market and generate leads to how we conduct transactions. Realtors who can stay on the front edge of this change have an opportunity to lead the way forward, setting them up for client success down the road.
Finally, remember that this business is all about servicing our clients, not ourselves. When you accepted your Realtor designation from the National Association of Realtors, you agreed to always place your client’s fiduciary best interests over all others, including your own. If you are ever faced with a tough decision in a transaction, stop and ask yourself if your choices are in the best interest of your clients.
Your Turn
What frequently asked questions did we miss? Leave us a comment below.
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