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Real Estate Licensing & Continuing Education Requirements

Instructor: Racquel Fulton
Do you want to explore a career in real estate? In this lesson, we cover the steps you need to take to become a licensed real estate salesperson or broker.

How To Become a Licensed Real Estate Salesperson or Broker

If you want to sell or purchase real estate, you can certainly do so without the services of a real estate professional. However, according to the National Association of Realtors, 88% of property owners choose to hire a real estate salesperson or broker. Licensed real estate salespersons and brokers have state-approved authority to market and negotiate the sale of real estate on behalf of buyers and sellers.

If you are interested in selling real estate professionally, the first step is meeting your state's licensing requirements. The license gives you the right to work within the boundaries of the state. Requirements vary by state. In this lesson, we will be using Steve and the state of New York as our example. In New York, applicants must be at least 18 years of age, of good moral character and complete state-approved pre-licensing education. Let's start by taking a look at pre-licensing education.

Pre-Licensing Education

The goal of pre-licensing education is to provide you with a foundation in real estate fundamentals and practice. Pre-licensing education can be completed in a classroom or online from a state approved training company, local college or university. There are exceptions to pre-licensing requirements, which we will talk about later in the lesson.

Steve is 18, lives in New York and meets his state's minimum eligibility requirements. His first step is to complete 75 credit hours of pre-licensing education. He will learn a range of subjects, including real estate finance, land use regulations, property management and the laws of agency.

Examination

Like Steve, after completing pre-licensing education, you may be required to pass two examinations. The first exam is administered by the pre-licensing education provider and is designed to mirror the state exam. Many providers offer you the opportunity to take the exam more than once.

In New York, Steve will have three opportunities to pass the exam with a minimum score of 75%. If he does not pass, he will need to retake the entire pre-licensing education course. Fortunately, Steve passes the exam and receives his certificate of completion. He can now proceed to take the state exam.

The final exam is administered by the state. This exam is timed and proctored at a testing center. A proctor is a neutral third party who administers a test. The exam will test Steve's knowledge of key real estate terminology and state licensing laws.

Getting Licensed

After Steve passes the state exam, his next step is to obtain the sponsorship of a real estate broker. Real estate brokers provide leadership and supervision to real estate salespersons. In most states, salespersons are required to work under the direction of a broker.

Once this last step is complete, he can apply for a real estate salesperson license. A real estate salesperson license remains active on average for 2 - 4 years. In New York, Steve's license will be valid for two years. The state will notify him when it's time to renew.

Becoming a Licensed Real Estate Broker

If Steve actively works in the field of real estate for two years, he will be eligible to become a real estate broker. He will also be required to take 120 hours of broker pre-licensing education. The broker pre-licensing course includes subjects such as conveyance of real property, taxes and assessments, real estate investments, and other advanced topics. Licensed brokers have the authority to open real estate agencies and hire salespersons to work for them.

Reciprocity

Salespersons and brokers can also become licensed in more than one state. Many states offer reciprocity, which is an agreement, commonly among neighboring states, that allows a licensee to apply for the same type of license in multiple states.

Steve applies for and is granted a license to practice real estate in Connecticut. The benefit of reciprocity is that Steve will not need to complete pre-licensing in Connecticut because he already has a license in his home state. Review your state's real estate commission website for a list of reciprocal states.

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