Real Estate License Guide

How to get a Real Estate License

Getting your real estate license is easy – you just need to complete these 5 steps.

  1. Complete a pre-license course (good news – it can be completed online in most states!)
  2. Pass the state real estate exam (it’s not too bad with a bit of test prep)
  3. Find a real estate company to work with and ask them to sponsor your license.
  4. Consider joining your local Board of Realtors.
  5. That’s it – You can now buy and sell real estate!


Important: Details vary by state. Click the button below to see our full guide to real estate licensing in your state.

Real Estate License FAQs

sold signThese terms often get thrown around interchangeably, but they actually have pretty distinct differences between each other.

The biggest difference between the two comes down to the certifications for each. Simply put, while they have similar job descriptions, they are held to different standards as established by the National Association of Realtors. To better understand “Realtor vs. agent,” let’s take a closer look at the role of a real estate agent, followed by the role of a Realtor and the qualifications necessary for each.

Real Estate Agents: Real estate agents help people buy and sell properties, and has earned a license in order to do so. Agents can pick between several specialties including residential or commercial properties.

How to Become a Real Estate Agent: 

  • Meet Pre-Licensing Requirements: Pre-licensing requirements change from state to state. Generally, you will need to be at least 18 or 19 years old and a U.S. citizen.
  • Take a Pre-Licensing Course: A pre-licensing course will educate you on the real estate industry, so you are prepared to help people in the buying and selling process. It will also help you fulfil the course hours required for you to take your test.
  • Pass the Real Estate Exam: Next you will need to apply for and take your real estate exam. The exam will test you on various aspects of the real estate industry. You will be required to pay a fee to take the test. The test is multiple choice, and you will have a time limit (it varies from state to state). The exam has two different sections, the state portion and the national portion. Although licensing requirements vary by state, the average real estate agent will have completed 30 to 90 hours of coursework and must become knowledgeable about local, state, and national real estate laws and practices.
  • Find a Broker: Most states do not allow real estate agents to work on their own. They must work under a brokerage or sponsoring broker. There are many options, including remote, cloud-based brokerages to traditional brick and mortar brokerages. It’s important to find the right fit for you.
  • Continuing Education: Depending on the state, agents are often required to continue their education and renew their licenses every one to two years.

man with for sale signRealtors: Realtors are basically real estate agents that are also active members of the National Association of Realtors (NAR). The word Realtor is a actually a trademark referring to that active membership. Home appraisers, property managers, real estate counselors, and real estate brokers also can be members of the NAR, earning them the title of realtors. The association has a great reputation so agents that join will have a leg up on their non-member competitors. It’s important to note that technically, there is no such thing as a “realtor license”. More or less, NAR is an organization that fosters and promotes best practices within the real estate industry. You do not have to become a realtor in order to hold a real estate license, but you do have to hold a real estate license in order to become a realtor.

shaking handsHere are some benefits of becoming a NAR member.

Networking: When you join NAR, you join a network of over a million members. You can use your connections to build relationships with other members who may be able to provide you with inside information on listings.

Reputation: Agents that join NAR are held to a Code of Ethics that guarantees they are reputable. Buyers and sellers that realize this will be more likely to hire a realtor as opposed to a non-member agent.

Support: NAR works to protect the rights of their members. If you have a tax issue, or any other type of legal issue, you can contact their board of legal experts who are ready to help you in any way they can.

Other Perks: As an NAR member, you will be eligible for discounts on property and insurance. If you reach out to their credit board, they may help you get a loan for your business. You may even be able to get a special realtor credit card.

joining NARHow Do I Join NAR?

In order to join NAR, you must meet the following requirements:

  • You must be a practicing real estate agent
  • You cannot have any pending or recent bankruptcies on your credit record
  • You must not have a record of unprofessional conduct
  • If you work for an agency, the principle of your agency must be a member of the NAR.

New NAR members must take an online course on the ethics code and pass an exam. Current members are required to take an online ethics refresher course every four years. Membership in a local real estate board or association requires an annual $120 fee that covers membership dues for the NAR and any state-level real estate associations.

Which License Do I Need to Work in Real Estate?

When it comes down to it, all you really need to buy and sell homes is a basic real estate license. However, if you want to expand your business and enjoy the perks that come with being an NAR member, you will want to “get a realtor license” by joining NAR as well. So tell us, will you be adding a realtor license to your real estate resume?

Perspective from a real estate pro:

David Zeff HeadshotDavid Zeff
Realtor in Gaithersburg, Maryland
RE/MAX Realty Group

“I think that some of the things that helped me to pass the exam on the first try were to take my real estate courses online. By taking the course online, it allowed me to do the course at my own pace to ensure I was able to absorb the information easier and also revisit certain topics as needed.

Another key was to purchase a couple of practice test books. My local board of REALTORS as well as sites like Amazon have practice test books specific to my state which allows me to practice the tests, get familiar with some of the test content, and get familiar with the test format.

One other key factor was that I had a mentor when getting into the business. Having a mentor was critical because he was present in case I needed help with my coursework and since he had many years of experience, he helped me to dissect the questions on the practice test allowing me to better prepare for the exam.”

Real Estate Agents vs. Real Estate Brokers: Key Differences

signing contractCertain states run their real estate licensing on a two tier credential system where on the lower tier, you have something called the salesperson who people commonly refer to as a real estate agent. And on the higher tier, you have something called the real estate broker. In this two tier system, each title requires an entirely different set of tests in licensing, but the broker designation also requires two years of experience as an agent.

You must get your real estate license, and hold that actively for at least two years before you can start the process to obtain your broker’s license. If you want, in order for the salesperson to conduct business legally in real estate, they have to hang their license under a real estate broker and pay them a portion of their commission.

The reason behind this is that it’s assumed that a broker is more experienced than the salesperson, and they will oversee their activities and ensure that they’re not causing problems. Typically the broker will provide ongoing resources like guidance, education, and business advice to the agent and their compensation for that is a portion of the salesperson’s commission.pexels-pixabay-280221

So to recap, in states with this two tier system, a real estate professional that holds their salesperson’s license is commonly referred to as a real estate agent. Whereas someone who holds a real estate brokers license is simply a real estate broker. Now in other states, this two-tier system is still somewhat in effect, but there’s only one standardized license in all of real estate.

It’s mainly the real estate brokers license in these states. No one holds a salesperson’s license at all, they only hold a broker’s license. For those looking to make more money, they must keep their license active for at least two years, and then take a class that certifies them as a managing broker.

In these states you have brokers and managing brokers, and here’s where things might get a little confusing. Most people in those states refer to non managing brokers as real estate agents, and then refer to managing brokers as “brokers”. Regardless of what state you’re in, probably the easiest way to remember the difference between an agent and a broker is to think of a real estate agent as a professional who primarily does business just for themselves. Whereas a broker normally runs a real estate brokerage firm.

Real estate is all about the hustle! The more hours you put in, the more money you make. The more clients you have, the more money you make. There are a lot of different factors that can determine an agent’s annual income, including the number of licensed realtors in your area. Check out the average income for agents in your state:

chart (1)

StateAverage Hourly WageAverage Annual Wage
Alabama$25.48$52,990
Alaska$36.47$75,860
Arizona$26.72$55,580
Arkansas$23.12$48,660
California$36.90$76,750
Colorado$39.05$81,210
Connecticut$37.76$78,540
Delaware$23.79$49,490
District of Columbia$30.97$64,420
Florida$29.39$61,120
Georgia$33.24$69,150
Hawaii$35.97$74,820
Idaho$26.90$55,790
Illinois$21.56$44,840
Indiana$22.79$47,410
Iowa$26.38$54,880
Kansas$27.64$57,500
Kentucky$25.50$53,030
Louisiana$24.41$50,760
Maine$31.34$65,180
Maryland$26.08$54,250
Minnesota$45.28$94,170
Michigan$30.05$62,500
Minnesota$22.48$46,760
Mississippi$24.61$51,110
Missouri$29.00$60,330
Montana$22.50$46,010
Nebraska$25.31$52,650
Nevada$31.34$65,180
New Hampshire$25.22$52,450
New Jersey$33.49$69,660
New Mexico$28.30$58,870
New York$49.13$102,200
North Carolina$25.38$52,800
North Dakota$31.86$66,270
Ohio$23.62$49,120
Oklahoma$31.93$66,400
Oregon$26.34$54,790
Pennsylvania$27.61$57,420
Puerto Rico$27.40$57,000
Rhode Island$32.22$67,020
South Carolina$21.90$45,550
South Dakota$27.51$57,110
Tennessee$23.48$48,840
Texas$30.66$63,780
Utah$34.75$72,280
Vermont$28.74$59,780
Virgin Islands$15.76$32,770
Virginia$32.20$66,980
Washington$33.51$69,700
West Virginia$31.87$66,280
Wisconsin$23.07$47,990
Wyoming$31.34$65,190

neighborhood with house for saleHow much time it will take you to acquire a real estate license in the USA depends on yourself and your state’s education requirements. The sooner you pass the pre-licensing coursework, do the background check, and pass the licensing examination, the sooner you’ll be selling homes!

Depending on the state, pre-licensing courses can take anywhere from 2 to 8 weeks to complete if you’re dedicated to the courses full time. Scheduling and passing the exam can take anywhere from 1 to 4 weeks. So, all in all, the entire process from starting the course to obtaining your license can take from 3 weeks to 12 weeks to complete.  If you’ve identified which state you want to get licensed in, feel free to select it from the menu above to get more specific guidance. 

StateRequired hours# of coursesAllow online?Price ranges
Alabama601Yes$205-$349+
Alaska401Yes$375-$449+
Arizona962No$399-$559+
Arkansas601Yes$230-$450+
California1353Yes$99-$375+
Colorado1681Yes$279-$599+
Connecticut601No$175-$495+
Delaware991No$550+
DC601No$192-$402+
Florida631Yes$69-$495+
Georgia751Yes$125-$449+
Hawaii601Yes$251-$501+
Idaho901No$649+
Illinois752Yes$230-$399
Indiana901Yes$352-$700+
Iowa601Yes$251-$475+
Kansas602Yes$136-$248+
Kentucky961Yes$307-$514+
Louisiana901Yes$188-$311+
Maine551Yes$395-$445+
Maryland601Yes$139-$375+
Massachusetts401Yes$279-$365+
Michigan401Yes$125-$335+
Minnessota903Yes$419-$570+
Mississippi601Yes$139-$263+
Missouri722Yes$174-$625+
Montana701Yes$209-$675+
Nebraska661Yes$209-$344+
Nevada901Yes$209-$589+
New Hampshire401Yes (broker only)$300-$399+
New Jersey751No$279-$369+
New Mexico901Portions can be done online$384-$809+
New York751Yes$216-$509+
North Carolina 751No$249-$749+
North Dakota451Yes$489-$995+
Ohio 1204Yes$999+
Oklahoma901Yes$263-$598+
Oregon1507Yes$300-$699+
Pennsylvania 751Yes$223-$629+
Rhode Island451No$174-$300+
South Carolina902No$299-$570
South Dakota1161Portions can be done online$999+
Tennessee 902Yes$188-$629+
Texas1806Yes$249-$980+
Utah1201Yes$509-$663+
Vermont401Portions can be done online$174-$510+
Virginia 601Yes$118-$548+
Washington 902Yes$216-$405+
West Virginia901Yes$550-$625+
Wisconsin721Yes$262-$435+
Wyoming542Portions can be taken online$349-$695+

moneyAs a real estate agent, don’t expect to get a regular salary. Most agents are paid on commission meaning they earn a percentage off of every sale they make.

This leaves some room for uncertainty. Agents never know how many homes they will sell or how much the homes will go for in advance. Therefore, it’s difficult for them to predict what their real estate agent salary will be.

While we can’t tell you how much you’ll be making, we can provide you with information on how a real estate commission works. This will give you some insight on what you can expect to earn on the homes you sell.

How Much of a Commission Can I Expect?

As a real estate agent, you may be able to negotiate the amount of commission you get. You will start out with a certain commission rate, but as you gain experience, you may earn leverage that will help you negotiate for a higher commission.

In any case, let’s say your commission rate is 6%. This is the typical rate for most new agents.

house pictureYou sell a house for $500,000. That leaves you with a $30,000 commission…but not so fast.

That commission has to split between you and the buying agent leaving you with $15,000 each. (If you are lucky enough to represent both the buyer and the seller, you can keep the full commission).

Think you’re done now? Hang on because 40% of that has to go to the broker. So now you’re left with $9000.

Don’t forget that you will still have to pay independent contractor taxes to on that income when April rolls around.

How Much Will My Real Estate Salary Be?

Dividing up a good amount of your commission can be frustrating, but most real estate agents manage to do pretty well for themselves, especially if they build up some experience. Joining the National Association of Realtors can also boost your reputation and help you bring in more clients.

As a realtor, here’s an estimation of what you can expect to make.

  • A realtor’s median annual income is $49,700.
  • Realtors with 16 years of experience or more make an average of $68,500 a year.
  • 27% of realtors make $100,000 or more annually.

Additionally, real estate agent salaries are on a trajectory to increase. A recent survey showed that brokers and agents saw a rise in salaries from 2018 to 2019. 65% of agents and 78% of brokers brought in more money in 2019 than they did in 2018.

Consider the Number of Sales You Make

While a decent commission rate will help you bring in more money, it won’t mean anything if you aren’t making sales.

It’s impossible to predict how many sales you will make each year, but the market you are working in will be a pretty good indication.joining NAR

For instance, if you work in a big city, there will be a lot of demand for housing making for an active market. On the other hand, there will also be stiff competition.

If you work in a quiet town, you may not have as many clients coming through, but without a lot of competition in the area, the people that are looking to buy and sell will be more likely to call you first.

Overall, real estate agents tend to make more money in metropolitan areas. This is in part, due to the increased demand for housing. However, properties in these locations also tend to be more expensive. Therefore, they will yield higher commissions when they sell.

How Can I Earn More as a Real Estate Agent?

As a real estate agent, you have the potential to make a substantial amount of money. But you need to work hard to do it. Here are some tips that will help you increase your real estate agent salary.

Supplement Your Income

Agents can earn extra money by working in other capacities within the industry. Here are some income sources that will be ideal supplements:

  • Market evaluations
  • Writing contracts
  • Property management
  • Providing BPO’s
  • Property inspections

Not only will these options help you bring in extra income, they will also provide you with more real estate insight allowing you to become an expert in your field.

Branch Out

As an agent, it’s a good idea to broaden your horizons. For instance, if you specialize in residential real estate, you might also consider branching out into commercial real estate, relocation and property management. This will provide you with more money-making opportunities.

Earn a Degree

Once you become an agent, you may choose to continue your education by earning a bachelor’s degree in a related industry like business, sales or marketing. This will provide you with the background you need to help you succeed and it will also look impressive to clients.

Studies show that agents with a bachelor’s degree or higher earned 5% more money than those without degrees.

real estate commission imageContinue Your Education

Continuing education doesn’t have to be limited to earning a degree. You can also take courses which may include online classes, workshops and resources offered through your agency.

These courses can provide you with a strong background that will make you more successful in your field and you can also earn certifications that allow you to work in specific niches. They will increase your expertise while providing more options for bringing in income.

Study with a Mentor

A mentor can offer you advice that can help you become an expert in your industry and provide direction if you are looking to branch out into a related niche. If you study with someone well known, you can add them to your resume to make yourself look more impressive.

Real estate agents may be drifting into unknown territory when it comes to salaries. The tips in this article offers guidance in terms of what you can expect. Here’s hoping that your career is both financially and mentally gratifying.

Consider working for an iBuyer Company

The truth is, many iBuyers collaborate with real estate agents to close deals.

While every company works with agents differently, many pay commissions to agents representing the buyers and sellers they deal with. Agents may receive a commission of about 1% in referral fees allowing them to boost their proceeds.

In fact, many agents partner with iBuyers to increase their income and help more of their clients buy and sell quickly.

money and calculator imageThe exact cost of getting a Real Estate Agent License in the US will depend on your state, but in general, you will incur with the following costs:

  • The pre-licensing course will cost anywhere between $150 and $1,500 depending on the provider you select and the number of course hours your state requires.
  • The exam fee itself varies from state to state but is usually less than $50 
  • Background check and fingerprint scan cost around $100 in total
  • Errors and Omissions Insurance is about $600, but it’s mandatory only in 13 states: Colorado, Idaho, Iowa, Kentucky, Mississippi, Nebraska, New Mexico, North Dakota, Rhode Island, South Carolina, and Tennessee.
  • The cost of submitting your Real Estate application is generally around $25

All in all, the fees for obtaining a Real Estate License in the USA are anywhere between $250 – $1,600, but in some cases, it can be higher due to the Errors and Omissions Insurance explained above. 

Real estate exam prep is THE best way to ensure a passing score on the state test.

There are some things on the test your courses may not have prepared you for. There may be tricky questions that you are not sure how to answer. You may become lost and stressed out which will set the tone for the entire test taking session.

So, we’ve made a list of the top real estate exam prep providers:

  1. PrepAgent – Gives you access to live online group webinars, e-books, online training tools, and thousands of state-specific practice questions.
  2. Kaplan – This is the highest rated, and most popular test prep in the state.
  3. Mbition – Known to help prepare students for the math portion of the licensing exam.
  4. Real Estate Exam Scholar – Provides affordable tests to help simulate the exam-taking. experience
  5. AceableAgent – This is the most convenient test prep. Students can access it on the go using a mobile app.
  6. Real Estate Express – Students can prepare for the exam by talking to agents who are already licensed and experienced.

man studying for licensing examTo become eligible to take the real estate licensing exam in the USA, first, you must complete a  pre-licensing course. Every state has specific requirements about the format of the course and the minimum number of hours required before you can schedule an exam. 

After completing the pre-licensing course, the next step is applying for the exam. Before you take the exam, note that some states require you to complete a fingerprint scan and pass a background check. The exam generally contains 2 parts – the national portion and the state portion – and you must pass both to receive a license. If you fail either portion, most states allow you to retake only that part within a specified period. Brokers react as Compass gobbles up GlideOnce you’ve passed both parts of the exam, you should then submit your application for a real estate agent license. 

After you’ve completed all these steps and earned your license, you will need a supporting broker to “sponsor” you while you’re learning.  If you don’t, most states allow you to apply for an inactive one and activate it once you’ve found a supporting broker.

Generally, yes! Many states allow you to take your real estate class online. An increasing number of people choose this type of studying as it’s more time-efficient, allows students to organize their time more efficiently, and lets them study at their own pace.

As a reminder, all real estate courses taken must be approved by the relevant state – so be sure to check the state-specific page on this site before buying your course. 

In most states, the licensing test itself has multiple-choice questions divided into two portions:

  1. The National Real Estate portion tests you on general real estate principles and practices.
  2. The State portion has questions related to the specific real estate regulations in the state where you’re applying for a license. 

All questions on the exam are specifically designed to test your understanding and knowledge in two areas: general knowledge about real estate and the ability to apply fundamental principles of real estate laws to solve new or existing problems. To maximize your odds of passing, be sure to take a real estate exam prep course before going in and sitting for your test!

Again, this depends on the state.  In general, to be eligible to apply to take the state real estate exam, first, you have to complete a state-approved pre-licensing course, which can also be taken online in many states. After finishing this course, you can apply to take the test in an officially approved location.

In most states, even if you don’t have a sponsoring broker, you can still take the licensing exam. However, in order for your license to be officially active, you have to work under a sponsoring broker. If you don’t have one after passing the exam, some states allow you to apply for an inactive license, but even so, you can’t practice as an agent until you get sponsored.

This one varies widely by state – so find your relevant state through the menu above to be sure.

Most states require you to apply for and pick up your real estate license within a year of passing the exam. If this period expires, you will have to retake the exam all over again. 

woman working in coffee shopIf you don’t get a passing score, your score report will indicate your results along with reapplication instructions. Most states will give you more than one try – so don’t stress out.

If you want to retake the exam, you will need to schedule another appointment. Do note that failing one portion (national or state-specific) of the exam doesn’t necessarily mean you’ve failed the whole exam. Most states allow you to retake only the piece you’ve been unable to pass within a specified period after failing.

In most states, if you fail the real estate license exam three times in 1 year, you need to take additional education hours. Most states require an additional 20 to 40 hours of education for every failed portion. After you’ve completed the additional courses, you can then apply to retake the exam.

Licensed individuals working under a sponsored broker have an active license, which means they can engage in real estate brokerage activities, while an inactive real estate license means the opposite. The person doesn’t have a sponsoring broker, and because of that, is not eligible to engage in any type of real estate brokerage activities. 

The simplest and fastest way is to research brokerages in your city and contact them via email or phone. Schedule a meeting with a broker, offer them your services and discuss their requirements as a sponsoring broker and if they would be willing to take you under their wing. Read more about how to pick a sponsoring broker that is right for you. 

NOTE: A sponsor at your brokerage is be different than a sponsoring broker.

No. Every state has different regulations about obtaining and maintaining a Real Estate license. In other words, there is no such thing as a general US Real Estate license.  

However, some states have what is called reciprocity between them. Reciprocity means that obtaining a Real Estate License in one state will make the same license valid in another state. In most cases, the reciprocity allows the Real Estate Agent to skip through all the pre-licensing work and take only the state-specific portion of the exam. The process varies by state, but in many states, you simply need to complete a reciprocal license application with the state in which you are seeking your license.

You should check for your state’s real estate license reciprocity policy if you’re moving from one state to another – it may save you having to start entirely from scratch in your education and testing requirements. These details are included on the state specific page on this website.

US map

Generally, real estate agents in the US are required to complete a certain number of continuing education hours, which vary from one state to another. Most states have requirements about the number of hours you need to complete and which topics and areas the continuing education courses have to cover. 

zillow-flex-main photoEvery state has specific rules about how long a Real Estate License lasts and how to maintain it, but usually, the period is between 2 to 4 years. During this period, the licensed agent is required to complete a certain number of continuing education hours and provide proof for it to the real estate regulatory board to maintain their Real Estate License active. 

To be able to participate in real estate transactions, a license is mandatory. But to obtain one, you must prove your knowledge, professionalism, and expertise in different fields.

We hope these questions will help you on your journey of becoming a licensed real estate agent. If you want to find out more about becoming a real estate agent in some of the states, check out our state-specific real estate licensing articles.

woman taking notes during real estate courseIn short – yes!

Free online real estate courses: AgentAdvice.com has a program that provides free online real estate courses to students. Real estate brokerages are often looking to hire agents, and are willing to pay recruiters to help get new talent in the door. Because staffing up their team is important to brokerages, these brokerages are sometimes willing to foot the bill for real estate school for the right candidate. If you’re interested in learning more about this program, please click here.

In most states, pre-licensing education to get a real estate license costs between $100-$1000.  Real estate courses take a lot of time and energy to develop, which is why free real estate courses are few and far between. These companies need to pay their staff to keep the courses updated with the latest and greatest information, stay up to date with legal requirements at the state level, etc.

Free continuing education courses: (for once you’ve already received your license) is sometimes free through title companies, brokerages etc.  It’s rare for real estate licensing education courses to be free though, because the content is longer, and takes much more time to create a strong course.

 

Chris Heller Headshot

About the Author

Chris Heller brings 27 years of experience in real estate. Chris serves on the AgentAdvice Editorial Board and is the Chief Real Estate Officer at OJO Labs. Chris brings deep expertise having held influential industry positions including CEO of mellohome and former CEO of Keller Williams Realty International.