How do you go about getting a real estate license? The requirements for real estate licensing vary by state, so the answer will depend partly on where you live and where you wish to work.
1. Meet the minimum licensing requirements
Minimum requirements mean that you must be at least 18 years old and have a high school diploma or GED. In certain states, the minimum age is 19, so be sure you check the specific requirements in your state. You also need to be authorized to work in the United States legally. However, you may have an issue if you wish to be licensed in a different state than the one where you live.
Most states will allow you to practice real estate even if you live out of state, although the licensing rules in such cases may be different than if you had an in-state license. Although, some states require an in-state residence. If you already hold a real estate license in one state, it will be easier to obtain a license in another state if the two states have a reciprocity agreement.
2. Take the required pre-licensing course
All states require applicants to take pre-licensing courses, but there are several different options that you have when choosing a program. You can attend your pre-licensing course at a public university, community college, or other accredited educational institution; or you can enroll at a private real estate school.
If you choose the latter option, be sure that the school is approved by the licensing authority in the state where you are seeking the license; you don’t want to waste time and money completing a course only to find that you are not able to take the licensing exam after finishing the classes. In most cases, regardless of where you choose to take the course, you will have the option of completing your classes online or attending classes on campus.
3. Arrange to take your licensing exam
When you take your licensing exam makes a difference, and most states have rules that you must finish the test within a specific timeframe. Refer to the requirements for your state, and take the deadlines seriously.
If you miss a cutoff date, you may need to go back and take the pre-licensing course all over again. Also, be aware of the time commitment required for the exam (typically about 1-4 hours) and be prepared to pay the applicable exam fee.
4. Pass the licensing exam
It may sound simple, but it’s not easy. Just because you pass the pre-licensing course doesn’t automatically mean that you’re prepared to take the licensing exam. Reported pass rates from the states can sound pretty dismal, ranging from 44 percent to 72 percent.
The exam consists of two portions: one specific to your state and one with a national focus. In both cases, the questions will gauge your knowledge of real estate policies, terminology, and practices. As is often the case, the exams vary from state to state, but most consist of approximately 100 multiple choice questions, and the minimum passing score is usually between 60 percent to 70 percent.
Passing the exam may not be easy, but that doesn’t mean it is impossible. Exam preparation relates to most other things in life: the more you put into it, the more you end up getting out of it. Here are some tips to help you to pass the exam on the first try:
- Pay attention to your pre-licensing course, particularly the final exam. Even if you can breeze through the coursework by meeting the bare minimum, it is best to invest the time and effort to excel at it. The investment that you make now may pay dividends when it comes time to take the exam.
- Take advantage of any available exam prep opportunities. If the course you’re taking offers practice exams, take them. If it offers supplemental study materials, use them.
- Take your exam as soon as possible after you finish the pre-licensing course. Obviously, the state rules govern when you can take the exam. But the sooner that you do so after you finish your course, the fresher the information will be in your mind.
5. Apply for your license
There may be state laws specifying a particular timeframe in which you must submit your real estate license application after passing your exam. Your license application will include your exam results as well as an application fee of approximately 50 to 250 dollars. A background check will cost more money.
Once you have your license, there are other steps that you must take to start working in real estate. But for now, take a moment to congratulate yourself on completing this crucial part of the process.
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MileIQ’s blog does not constitute professional tax advice. You should contact your own tax professional to discuss your situation.