How to Become a Real Estate Agent: A Step-by-Step Guide

Reviewed by Charlene RhinehartFact checked by Jared EckerReviewed by Charlene RhinehartFact checked by Jared Ecker

Have you been wondering how to become a real estate agent? You’re in good company. As of March 2024, there are over 1.5 million members of the National Association of Realtors^® (NAR). And, since not all real estate agents are NAR members, it’s safe to assume that the total number of real estate agents in the U.S. goes beyond the NAR figure.

If helping people buy or sell real estate is work that you’d like to do, then the six steps below can help you get started.

Key Takeaways

• You can become a real estate agent in less than six months, depending on where you live and how much time you dedicate to the process.
• The general steps to earning a license include taking the real estate prelicensing course and licensing exam, activating your license, and joining a brokerage.
• Only real estate agents who are members of the NAR can use the title of Realtor.
• Realtors must subscribe and adhere to the NAR’s strict Code of Ethics.

How to Become a Real Estate Agent

In a nutshell, here are the steps to take:

1. Research your state’s requirements
2. Take a prelicensing course
3. Take the licensing exam
4. Activate your real estate agent license
5. Join a real estate brokerage
6. Consider becoming a realtor

Why Become a Real Estate Agent? 

Flexible Hours

Working as a real estate agent offers a great deal of variety. Agents work with different clients and visit many homes. They set their own work hours, finding the best times to show houses (even on weekends).

You get to be your own boss and enjoy the satisfaction of helping buyers and sellers navigate one of life’s major milestones—achieving homeownership.

Pay

The median pay for a real estate agent was about $54,300 per year in 2023, according to data from the U.S. Bureau of Labor Statistics. Real estate brokers with additional education, testing, and experience averaged $63,060. The highest 10% of agents earned more than $119,590.

Ease of Entry

Getting into the field is relatively easy. There’s an upfront investment of money and time, both of which vary depending on where you get your license. But compared to other careers with similar earnings potential (most of which require a college degree), getting your real estate license can be a quick and affordable process.

Though the specific requirements differ by state, here’s a general rundown of how to become a real estate agent in six steps.

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’ regulatory agency directory.

Each state has specific requirements for:

• Age
• 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
• Achieving 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 taking an additional license examination. Illinois, for example, has reciprocity with many states, including Colorado, Connecticut, Florida, Georgia, Indiana (broker only), Iowa, Kentucky, Nebraska, and Wisconsin. Pennsylvania, on the other hand, has reciprocity with Arkansas, Georgia, Louisiana, Maryland, and Massachusetts. And Texas has no reciprocity with any other states.

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.

Real estate course requirements vary by state. In California, applicants must take three real estate classes totaling 135 hours. In Ohio, the classes require 120 hours. In New York, the courses take 77 hours. In Georgia, they take 75 hours. And in Florida, the course takes 63 hours.

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 scheduling, registering, and paying for the licensing exam. The average cost of the real estate exam is $100-$300, though the fee for the test in Arizona is $75 and in Pennsylvania, it’s only $40. 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 in multiple-choice format. The number of questions and time allotted 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. In Illinois, for example, you can take the exam four times in one year, but if you don’t pass on the fourth attempt, you’ll have to retake the pre-licensing course. Arizona has no limit on the number of times you can take the exam, but if you fail it twice, you are given the opportunity to review the questions you missed.

Costs could add up to several thousand dollars per year, so it’s important to factor that into your planning when deciding if a career in real estate is right for you.

4. Activate Your Real Estate Agent License

Once you pass the exam, it’s time to submit an application for your license to your state’s real estate regulatory organization. Include any required documents and fees, usually $200-$400. In Washington, for example, the fee is $223 for a broker’s license. In Illinois, the licensure fees increased in 2024 to $100 for a leasing agent and $150 for a broker.

When your application is approved, the state will mail your real estate license certificate to you, and your name will be searchable under the licensee section of its website.

Remember 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. Join a Real Estate Brokerage

As a real estate agent, you’ll work under the umbrella of a supervising broker who is licensed by the state to oversee real estate transactions and make sure that 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. The cost of joining a brokerage averages $25-$500 per month.

6. 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 NAR is the largest trade association in the U.S., representing over 1.5 million members who are salespeople, brokers, property managers, appraisers, counselors, and other participants in the residential and commercial real estate industries.

Though, as a real estate agent, membership is optional (at a cost of $156 in 2024 and also for 2025, plus an assessment), becoming 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.

How Can I Market Myself As a New Real Estate Agent?

Reaching out to friends and family and creating a marketing network can help start your career. Contact new home builders, other realtors, and even lenders, and use social media to create your agent profile to distribute news about your new career.

What Is License Reciprocity?

License reciprocity occurs when one state chooses to honor the official real estate license of another, lessening the time and effort of completing a multi-state transaction. Many states accept licensure from other states, especially neighboring states, and the National Association of Realtors has a “Broker and Salesperson License Reciprocity and Portability” tracking tool.

What Is Required by the National Association of Realtors Code of Ethics?

The Code of Ethics is divided into three major sections and defines specific guidelines regarding “Duties to Clients and Customers,” “Duties to the Public,” and “Duties to Realtors.”

The Bottom Line

Getting a real estate license takes time and money, but it can help secure a rewarding job in the real estate industry. Plus, a career as a real estate agent can mean flexibility where working hours are concerned.

Though you can work part time as a real estate agent, most treat it as a full-time business, staying available to clients throughout the week and on weekends.

You may also want to consider the variety of available real estate designations and certifications, including those specific to mortgages, appraisals, residential property, commercial property, and property management. These designations can enhance your career and marketability as a real estate professional and increase your earning potential.

Read the original article on Investopedia.