Steps to Become a Real Estate Agent: If you want to become a real estate agent, you’re looking at an upfront investment of money and time, both of which vary depending on where you get your license. Though the specific requirements differ by state, here’s a general rundown of how to become a real estate agent.
Steps to Become a Real Estate Agent
1. Research Your State’s Requirements
A national real estate license does not exist, so you must meet your state’s unique licensing requirements. Research your state’s real estate regulatory office website, which you can find by visiting the Association of Real Estate License Law Officials (ARELLO)’s regulatory agency directory.
Each state has specific requirements for:
- Education requirements (such as a high school diploma or GED)
- Prelicensing courses and post-licensing requirements
- Exams and exam eligibility
- Application process and fees
- Background checks and fingerprinting
- Continuing education
- How to achieve the next level of licensing
- Reporting criminal history
Some states have reciprocal licensing agreements with other states, which means you can get your license in one state and use it in another without having to take an additional license examination. New York, for example, has reciprocity with nine states including Arkansas, Colorado, Connecticut, Georgia, Massachusetts, Mississippi, Oklahoma, Pennsylvania, and West Virginia.
2. Take a Prelicensing Course
No matter where you live, you are required to take a pre-licensing course at an estimated cost of $350 from an accredited real estate licensing school before you sit for the real estate license exam.
Course requirements vary by state. In California, applicants must take three real estate classes totaling 135 hours.7 In New York and Georgia, the courses take 75 hours and in Florida, the course takes only 63 hours.8910
Most states offer online classes, in-person coursework at real estate schools, and classes at community colleges.
3. Take the Licensing Exam
Your instructor should explain how to schedule, register, and pay for the licensing exam. The average cost of the test is $100-$300. Exams are computerized and consist of two parts: a national portion on general real estate principles and practices, and a state-specific section that covers your state’s real estate laws.
The exams are multiple-choice format, and the number of questions and time allotted for the exam vary by state. Each section is scored separately, and you must receive a passing grade on both sections to pass. If you fail one or both sections, you’ll have the opportunity to retake the exam. Each state has its own rules regarding the number of times you may retake an exam, how long you must wait between exams and the deadline for completing any retakes.
4. Activate Your Real Estate Agent License
When you pass the exam, it’s time to submit an application and any required documents and fees, usually $200-$400, to your state’s real estate regulatory organization. When your application is approved, the state will mail your real estate license certificate to you, and your name will be searchable under the licensees’ section of its website. Keep in mind that you’re not allowed to work as a real estate agent before your license is issued by the state’s real estate authority.
5. Consider Becoming a Realtor
Many people use the terms real estate agent and realtor interchangeably, but these terms differ. Though both are licensed to help buyers and sellers throughout the real estate transaction process, Realtors are members of the National Association of Realtors (NAR) and subscribe to its strict Code of Ethics.
The National Association of Realtors is the largest trade association in the U.S., representing 1.5 million members who are salespeople, brokers, property managers, appraisers, counselors, and other participants in the residential and commercial real estate industries.
Though membership is optional at a cost of approximately $185, being a realtor can add to your credibility as a real estate agent. You’ll also have access to a variety of benefits, including:
- Business tools
- Real estate market data, research, and statistics
- Educational opportunities
- Discount programs geared toward helping you succeed in business
Realtors have access to Realtors Property Resource (RPR), the largest online real estate database in the U.S., built from public records and assessment information. It includes information on zoning, permits, mortgage and lien data, schools, and a large database of foreclosures.
6. Join a Real Estate Brokerage
As a real estate agent, you work under the umbrella of a supervising broker who is licensed by the state to oversee real estate transactions and make sure you follow the required legal and ethical standards. In general, you won’t earn an hourly salary. Instead, the brokerage will likely pay you a percentage of the commissions it collects from your real estate transactions.
Depending on the arrangement you have with your brokerage, you may have to pay for desk fees, tech fees, business cards, marketing materials, and other costs of doing business. You’ll also have other one-time and ongoing expenses, such as renewing your license each year, continuing education, lockbox fees, and Multiple Listing Service memberships. Joining brokerage averages $25-$500 per month.