6 Steps to Get Your Alabama Real Estate License

man studying for licensing examStep-By-Step Guide to Become a Licensed Real Estate Agent

Welcome to ‘Sweet Home Alabama’ – the center of southern hospitality. People from all over  travel here to enjoy the beautiful white sands and green waters. Alabama is also known to have some of the most pristine private golf courses in the country.

This southern gem is home to some greats like Channing Tatum, Lionel Richie, Helen Keller, and Rosa Parks. The state has also been growing thanks to the booming iron and steel industries that attract investors from all over the country.

The hot markets in Mobile, Birmingham, Montgomery, Huntsville, and Tuscaloosa have seen tremendous growth in the last five years – and new construction continues to attract buyers and sellers.

What is the Alabama Real Estate Commission (AREC)?

women studying for licensing examAREC is the organization the state of Alabama entrusts with regulating, and overseeing the real estate industry. They maintain high standards, issue licenses, and discipline license holders who do not uphold the standards AREC has set. These commissioners ensure that nobody is damaging the market with shady practices. Simply put – they make the rules that you have to follow to ensure your license stays active.

Step 1: Meet the AREC Criteria

Let’s start with the basics – to qualify for a real estate salesperson’s license in Alabama, you need to meet these requirements:

  • You must be at least nineteen (19) years or older (*Note- this is different in other states)
  • You must hold a high school diploma (GED) or equivalent
  • Be lawfully eligible to work in the United States
  • Pass a background check that involves you submitting your fingerprints
  • You must not have been convicted of a felony or a crime involving moral turpitude.
  • You must not have had a real estate application or license rejected or revoked in any state within the past two years.

Reciprocity

small group of students studyingAlabama allows reciprocity for those who hold a real estate license in another state. You just need to confirm the following before you can apply for a reciprocal license:

  • You must pay the salesperson license fee 💸
  • Provide your current Certificate of licensure (the Certificate must have been issued within 120 days of submitting your reciprocal license application to AREC).
  • Complete a six‐hour course in Alabama real estate law and take and pass the corresponding Alabama portion of the licensing examination
  • You must provide a copy of your state ID showing proof of residency
  • You must provide a copy of your social security card, notarized verification of lawful presence, a certification of licensure history from the state Real Estate Commission, and any other jurisdiction where you have held a license
  • You must provide a criminal history explanation form.

Exemptions

If you are one of those folks with a license in another state, you don’t need to take the national portion of the Alabama real estate license exam.

  • You must have a residence in Alabama
  • You must take the Alabama portion of the state real estate licensee exam
  • You must provide your license from other states
  • The license must be active within four (4) months of submitting the Alabama application

Step 2: Complete Approved Pre-licensing Education 

studying for licensing examTo qualify for your license, you must successfully complete an approved 60 – hour Pre-Licensing course.

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The course is designed for you to learn about real estate laws, principles, and policies. The course has to be taken at a college or with an accredited education provider. The course can be taken online or in a physical classroom setting. Make sure the school you choose is accredited by the state. Online courses can be purchased and started immediately, while classroom courses are on a set schedule. Want to learn more? Check out the best real estate schools in Alabama.

The course topics include:

  • Contract law
  • Listing agreements
  • Real estate finance
  • Closings
  • Alabama laws

After you complete the course, AREC requires you to take a proctored final exam. You have to schedule an appointment with a proctor in advance. You must score a 70% in order to pass. Upon completion of the course and final exam, you will be issued a ‘Certificate of Completion’. You will need this certificate to register for your real estate license, so it’s important that you keep up with it.

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Step 3: Pass Real Estate Licensing Exam

Students studying in group settingNow, it’s really time to unleash your brainpower.

After you have completed your education requirements, it is time to take the Alabama Real Estate Salesperson Exam (this is different than your course exam). You will have 6 months from the time you get your course certificate to pass your Alabama Real Estate Salesperson exam. If you miss the deadline, you must retake the entire course.

The Alabama Real Estate Exam has two sections. You will have to answer 140 questions (100 for the National section and 40 for the State section). You will be given 3.5 hours or 210 minutes (60 minutes for the State portion and  50 minutes for the national portion) to complete the entire exam and the minimum passing score is 70% (70/100 on the National section and 28/40 on the State section). You’ll get your score immediately after the exam and you can take it multiple times if you don’t pass on the first try.

On exam day, you’ll need to bring at least two forms of photo ID. They must include your name and signature. At least one must be a government-issued photo ID (passport or driver’s license). You can also bring along a non-programmable calculator to the exam center for the math portion.

Step 4: Complete Background Check Requirement

Happy woman studying and smilingAfter you’ve successfully passed the Alabama and National portions of the Real Estate Salesperson Exam, you have to start the process of filling out your application to AREC. This must be done within 90 days of passing your exam, or your exam score becomes null and void.

The next step is to complete your fingerprinting and background check. The Alabama Real Estate Commission requires that all applicants have a background check performed before they can become a licensed real estate agent. You will need to submit your criminal history record information (CHRI) to AREC. If this is not filled out properly, it could slow down the license review process.

After submitting your fingerprints by mail or in-person, AREC will begin the background check process. They will review any findings in your background report to ensure your eligibility. During this process, they may reach out to you asking you to provide additional information or documentation to clear up any findings.

Step 5: Find A Sponsoring Broker

woman studying with coffeeWith a salesperson’s license, you are not allowed by the state to work for yourself. You must become associated with a current and active Alabama sponsoring broker. The real estate field is filled with a lot of laws, policies, unwritten rules, and business secrets. Sponsoring brokers have been-there-done-that and they’re ready to show you how. Not only will they give you all the tools you need to start making sales but they’ll help you market yourself as an agent.

You’ll get to choose a brokerage you like, that focuses on a niche you love, that has a company culture you love, and most importantly … has a good commission rate, so your paycheck is XL. Worried about finding a brokerage yourself? AgentAdvice helps with warm introductions to hiring brokerages if you sign-up for a class through us. Phew!

You have total freedom to choose your sponsoring broker. Here’s some things agents look at when choosing a brokerage:

  • Commission Rate – Look at each brokerage’s commission rate when you’re shopping around. If they’ve got a good rate, your commission checks will be larger than life. 💸
  •  Niche – Maybe you want a brokerage that focuses on a niche on a location or a specific category of real estate like commercial retail, single family homes, or fixer-uppers. So if you have a specific interest you can find a broker who shares that interest.
  •  Culture – Maybe the company’s culture is important to you. If so, get to know what they’re all about, how they work, and what’s important to them.

woman studying on computerYou want a reputable broker with a positive reputation who will let you have hands-on experience.

Alabama wants you to be sponsored by a broker-in-charge and apply for a license within one year of passing the exam. Once you have a sponsoring Broker, you can wait for your license in the mail.

Congratulations! You Are Now A Licensed Alabama State Real Estate Salesperson.

Step 6: Complete 30-Hour Post-Licensing Course and Get Permanent License

There’s one last step to note before you can finally relax.

The license you’ve been issued is only a temporary one. To get the permanent license, you have to complete a 30-hour Post-Licensing course within the first 6 months of active licensure. This course also has a proctored course final exam. You will use the registration number on your temporary ID to register for the post-licensing course. If you missed the window to submit an application for the permanent license you need to start the entire process all over.

How much does it cost to get a real estate license in Alabama?


Below is a list of costs associated with getting your Alabama real estate license:

Pre-licensing education and training costs:

The estimated cost for this is around $200-$500 or more depending on the school or online program you select. This involves finding an accredited and qualified real estate school to clock your hours. As stated earlier, the state of Alabama requires you to finish 60 hours of education.

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Real estate licensing and exam fees

This fee is estimated to cost about $210. The breakdown of this charge is as follows: applying for your license will incur a charge of about $150. The research and education fee sets you back another $30, and AREC also requires a $30 recovery fund fee. The recovery fund fee is only required when applying for an active license. It will be refunded if you set your license status to inactive.

Company license fees

An applicant for a company or broker license shall maintain a place of business.

If the applicant for a company maintains more than one place of business in the state, they shall have a company license for each separate location or branch office.

The original fee for each company license is $85 per year for each year or portion of a year remaining in the respective license period, and the renewal fee for each license is $85 dollars per year for each year of the license period.

Real estate broker fees

These fees are estimated to cost anything from $30 to $450 per month. The real estate broker fees are the fees that you have to incur when you want to become associated with a recognized and accredited broker. As it is your first year, there are some things that your sponsor broker will provide. These things, such as office supplies, photocopies, internet, and any other business expenses, are usually associated with the daily operation of your business. It is also likely that you will have to pay a desk fee every month to help reimburse some of these costs.

Real estate membership dues

Membership dues and feels usually cost around $200 or more each year. And while they can qualify as a tax break in the state of Alabama, they are still a significant expense for many Realtors. This fee typically depends on how many associations you want to join. For instance, you can become part of your local and state real estate boards.

Every one of these boards comes with a membership fee that has to be paid monthly or yearly for you to be able to enjoy the numerous advantages and networking options they offer. The local MLS or Multiple Listing Service will also have fees associated with them. Depending on where you are in the state, you may have to pay your monthly dues either to your broker or to the association directly.

Continuing Education

Becoming a real estate agent does not mean you stop educating yourself once you have passed your licensing tests.  To stay an active agent, you have to meet SAE and CE requirements. Some CE courses are offered for free through local boards of realty. Additional designations, though optional, may also come with fees.

How long does it take to become a real estate agent in Alabama?


Alabama is more lax than other states when it comes to education requirements. The Alabama Real Estate Commission does not limit the number of hours/classes you can take per day. Because of this, students can power through the courses however they see fit.

Applying for the exam and taking the exam itself can take 1-3 weeks, depending on how many candidates have applied.

The mandatory fingerprint scan takes up the most time, as it takes around 8 to 10 weeks to get checked.

After you apply for your license, it can take anywhere between 1 week to 2 months for your application to be processed. Once the AREC has completed the background check and approved everything, you will receive your license.

The total time it takes to obtain an Alabama Salesperson’s License depends on the person, but in general, can be completed in a few weeks to a few months.

How much do real estate agents make in Alabama?


The average real estate agent in Alabama makes around $50,300 a year. This is slightly higher than the national average. The median annual wage for real estate sales agents was $49,040 in May 2020. The lowest 10 percent earned less than $25,100, and the highest 10 percent earned more than $112,410.

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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.

Last Updated: 6/14/2022