Dave Evangelisti Authored By: Dave Evangelisti
How to Become a Real Estate Agent

The real estate industry contributes to the U.S. economy in a big-league way. When the many moving parts of the real estate sector move in-sync with one another, the United State economy hums along… spinning on all wheels. 

However, the real estate industry tends to be cyclical, similar to the recurrent patterns of the economy. Think about the 2008 recession; use it as a reminder as to what happens when an overheated (and unsupported) real estate price escalation takes hold. 

Real estate is often the largest asset a family possesses and for many, real property is their only asset saved for retirement. 

Real estate also plays a significant role in the American Dream. Real estate licensees play a large part in helping families find their American Dream property.

Real estate agents provide the essential tasks that keep the wheels of real estate moving forward. Most real estate agents work in the residential marketplace, rather than real estate’s commercial sector. Many real estate agents begin on a part-time basis; still, others find great success reaching for a real estate career as a licensed agent. 

The real estate industry is a complex component of the larger economy and those who to choose to work in the real estate industry must comply with a myriad of real estate law. Real estate law is serious business, with consequences for violations. In other words, real estate law holds real estate agents accountable. 

Every real estate professional in the United States must be licensed. However, a real estate license is NOT issued at the national level. As such, each state determines the licensing criteria for real estate agents. 

#1 – Determine Your State’s Real Estate License Requirements

To determine the exact requirements for obtaining a real estate license in the state you intend to work, it is best to start with the state’s regulatory or oversight agency responsible for the real estate sector. Search the Internet for your home state’s real estate commission or real estate oversight authority’s website. 

Another way to determine a particular state’s real estate licensing requirements is to follow this link to Arello’s categorized directory of regulatory agencies.

Generally speaking, states request the following criteria during the real estate licensee application process; however, a few states differ and may request additional items and information. They include - 

An application process and related expenses. 

  • Background and fingerprint checks.
  • Identification and age documentation.
  • Proof of a high school diploma or its equivalent, the GED.
  • The need to disclose past criminal history.
  • Evidence of passing pre-licensing courses to become eligible for the state real estate exam. 
  • Sitting for and passing the state exam. 

It is noted that once you have passed the state exam, there will be post-licensing requirements to be met within a pre-set allotted timeframe. Additionally, a real estate licensee is required to complete a pre-determined amount of continuing education hours each license expiration cycle. Continuing Education requirements vary by state as well.

Several states create licensing agreements with other states, which allow real estate licenses from one state to work within the other state’s borders – without being required to retake the new state’s licensing test. For instance, the state of New York has reciprocity with 9 other states. Note, though that each state determines how, and in what way a real estate licensee from another state becomes licensed through its reciprocity agreements. 

#2 – Complete the State’s Required Pre-Licensing Coursework

Each state determines the number of hours required to complete its mandated pre-licensing coursework; the required number of classroom hours varies widely. In New York, prospective real estate agents must complete 75 hours of pre-license coursework to take the state test; while California requires the completion of 135 classroom hours (3 sets of courses at 45 hours each) to reach the same objective.  Be forewarned, however, that your state’s Real Estate Commission must have approved the pre-licensing course you choose to take, or you may not be eligible to take the state exam.

The pre-licensing coursework prepares you for the state real estate licensing exam and is mandatory for real estate licensees. 

Check out our guide to the best online real estate schools.

#3 – Prepare for the State Exam 

How do you get to Carnegie Hall? Answer – Practice! 

Repetitive practice and committed discipline will help you achieve your objective of passing the Real Estate state exam. Check out the practice real estate exams below to help prepare you to sit for your home state’s real estate licensing exam.

>>Test-Guide.com's Free Real Estate Practice Exams

It is important to NOT underestimate the value of practicing and studying for your state real estate exam. The state exam is passable but requires commitment from the test-taker.

#4 – Take the State’s Real Estate Licensing Examination

When you have met all of your state’s pre-licensing requirements, you are eligible to take a state-administered test. Next, sign on to your state's website regarding real estate licensing and learn how you can sit for the state exam in that particular state.

Each state real estate commission determines how and where potential real estate licensees can sit for the exam. Most states utilize professional, neutral testing centers to administer the licensing exam.  The number of test questions is generally divided evenly between real estate law on a federal level and that of specific state real estate regulation.

The state examination tests one’s competence and knowledge regarding the many important regulations and law related to real estate. Most exams test one’s aptitude using approximately 100 – 150 test questions. This information is detailed on the State’s Real Estate Commission’s website. 

Likely Test Contents of Real Estate Licensing Examination

  • Real Estate Ownership -i.e. Fee Simple, Joint tenants, Life Estate, JTWROS, etc.
  • Significant Real Estate Concepts - obsolescence, depreciation, fixture, etc.  
  • Surveying and Land Descriptions - set back lines and flood zones. 
  • Real Estate Finance – interest rates, mortgages, encumbrances and liens. 
  • State and Local Regulations – building codes, required inspections, land use permits, variances.
  • Real Property Characteristics – single-family, multi-family, investment property, second home, etc.  
  • The concepts of agency and fiduciary relationships.
  • How a Real Estate Brokerage operates.
  • Contract Law - Buyer and Listing Agency Agreements, Purchase Agreements, leases, etc. 
  • The concept of title and title insurance. 
  • Appraisals – understanding its purpose and proper use. 
  • The Consumer Financial Protection Board’s (CFPB’s) role in protecting the American consumer established by the Dodd-Frank Wall Street Reform & Consumer Protection Act. 
  • The Environment – understand the superfund CERCLA, testing of hazardous materials, etc. 
  • Leasing Fundamentals.
  • The ability to analyze a real estate purchase using an investment analysis. 
  • Real Estate Settlement Procedures Act (RESPA) and CFPB’s TIL-RESPA (TRID) disclosure.

Retaking the State Real Estate Exam

Not everyone can pass a state real estate licensing exam on the first try. The test covers a lot of material, most of which are new concepts to a test-taker. The good news is that most states allow real estate licensing applicants to retake the state exam often during a preset cycle that generally runs two years, but determined by each state’s Real Estate Commission. 

After two years have elapsed, most states require real estate license test-takers to retake the pre-licensing course to be eligible for the state exam once again.

When you have met the state licensing requirements and passed the state exam, there are a few more steps to complete in the process of becoming a real estate agent. 

  • Activate your License through the state’s Real Estate Commission.
  • Decide what MLS service (if any) you wish to belong to. Again, prices vary by state. 

#5 – Decide Which Real Estate Brokerage to Join

Real estate sales licensees are required to work under the guidance and supervision of a licensed real estate broker. The broker for whom you work is responsible for the entire brokerage's actions – take by each real estate salesperson operating under the brokerage license.

A broker is also tasked with the responsibility of ensuring its sales staff complies with the mandated ethical and legal criteria required by law. With some experience under your belt, you can eventually take the broker’s state test and run your own real estate brokerage business. 

Real estate salespeople generally work on commission, so it is unlikely a new sales rep will receive an hourly wage. It is noted that some brokerages offer financial arrangements to help new licensees begin.

#6 – Consider Joining the National Association of REALTORS® (NAR)

Members of the NAR choose to follow a strict Code of Ethics and other rules and in return, they receive numerous benefits. The REALTOR designation speaks to credibility and professionalism.

The reality is as a real estate agent; one’s earnings have no limit. However, it takes time and effort to reach those lofty income figures. According to the Bureau of Labor Statistics (BLS) denotes that the average median pay for real estate agents to be $50,300 per year (2018). Real estate agents earning near the top of the pay scale for 2017 earned six-figures and above. 


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