Learning how to get a real estate license and starting your career in real estate is a straightforward process that can be broken down into nine steps.
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 real estate agents 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 need about $1,200 to cover your actual exam, local membership application and dues, and, of course, your prelicensure class and test prep.
If you’re wondering how to get your real estate license online, we’ve found that the most efficient and cost-effective place to do so is Real Estate Express. They offer packages from the most basic to completely comprehensive, as well as a fantastic satisfaction guarantee, so you’ve really got nothing to lose.
Your MLS membership will vary by your locality; we’ve estimated them at $600 for each state. Here’s a detailed breakdown of how you should expect to spend that $1,200.
Prelicensing and test prep costs were estimated using the offering of Real Estate Express.
How to Get a Real Estate License in 9 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 nine steps that you need to get started with your new career.
1. Set Expectations: 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 in. You can estimate needing between six weeks and six months of prelicensing 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 prelicensing hours; it 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, and 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 prelicensing hours, and that 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 prelicensure class, which typically takes about four 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 entire process takes about seven weeks from start to finish.
2. Take a Prelicensure Course
Nearly every state requires at least 30 hours of prelicensure 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 real estate agents 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 prelicensure 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 real estate agent, 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 prelicensure hours required in five states in five different geographic regions in the country.
What Will I Learn in My Real Estate Prelicense 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 contract and negotiation tactics, as well as what to expect on closing day.
The class will also cover the fundamentals of the homebuyer 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 Prelicensing Class?
There are lots of options for taking your prelicensing 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. Check out our guide on the top online real estate schools here.
3. Take as Many Practice Exams as You Can
Once you’ve completed your real estate prelicensing course, you’re free to take the actual exam whenever you’d like, but we suggest you spend some time taking some practice exams.
Pro Tip: Take as Many Practice Exams as You Can
“When I was preparing for my licensing exam, I took over 20 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.”
For more information on testing strategy, practice tests, and to actually take two mini-tests, check out our article about real estate exam practice tests.
4. Pass Your State’s Real Estate Exam
Once you’ve completed your state’s prelicensure requirements and prepped with some practice tests, 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 real estate agents 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 prelicensing 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 using a real estate license, 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 rules for where you live.
5. Interview With Real Estate Brokerages
Once you’ve completed your prelicensure 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 real estate agent requires a broker to sponsor them. A broker is a real estate agent 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 real estate agents.
What’s Involved in a Real Estate Broker Interview?
Think of your real estate broker interviews as a doubled-sided job interview. It is a chance for the broker to evaluate you, your business plan, and aspirations in the industry to see if you’d be a good fit as a part of their office. Likewise, it is a chance for you to learn about what the broker and their office has to offer as far as working environment, training, and opportunities you’ll have as a part of that particular brand.
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 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.
6. Choosing Your Brokerage
After you’ve interviewed with all the local brokerages that interest you, chances are you’ll have a number of offers. It’s time to line those offers up next to one another and pick the spot that is going to be best for you and your business.
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 agents divide each of their commissions with their brokerage (known in the industry as their “split”), so find a brokerage whose 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.
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.
7. 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 an agent. 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 prelicense, 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.”
8. Join Your Local MLS
An MLS, or Multiple Listing Service, is an online database where real estate agents share information about listed property. When you list a property for sale, all that property data, as well as price and terms, are input here so that agents 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 real estate agent.
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 real estate association, as well as the National Association of Realtors.
9. Explore the Benefits of the National Association of Realtors
As we just mentioned, many local MLS will roll the cost of your membership in the National Association of Realtors (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, 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 Your 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 real estate agent?
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. Real estate agents 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.
What frequently asked questions did we miss? Leave us a comment below.