How to become a realtor - 7 steps to success

This article was updated on November 7, 2022

How to enter the real estate industry 

Have you always dreamed of ushering families and individuals into the next chapter of their life? If so, you might have your eyes on the real estate industry, and you might be wondering: how do I enter the real estate industry? 

This article is the ultimate how-to guide that covers all the steps needed to become a real estate agent, and the additional steps needed to become a Realtor. Read on to learn how you can become your neighborhood’s go-to real estate professional.

Realtor vs. Real estate agent

First things first, it’s important to distinguish between a Realtor and a real estate agent. Most people use these terms interchangeably, but there is, in fact, a distinction. To put it simply, all Realtors are real estate agents but not all real estate agents are Realtors. More specifically:

• Real estate agent – Real estate agents are anyone who has received their real estate license after passing the real estate exam.
• Realtor – Realtors are members of the National Association of Realtors (NAR), which is a federally registered real estate group that follows a code of ethics. 

Next, we’ll break down the steps you need to follow to become either a real estate agent or a Realtor. The first six steps are the same:

1. Confirm your state’s requirements
2. Complete a pre-licensing course
3. Pass a background check
4. Complete the License Exam
5. Apply for your license
6. Become a member of a real estate brokerage and multiple listing service

The seventh and final step is how real estate agents can become Realtors:

How do I become a realtor? A step-by-step guide

Without further ado, let’s look more closely at each of the steps to follow if you’re wondering how to become a Realtor. If you are only interested in becoming a real estate agent, follow the first six steps. For each step, we’ll address what you need to do and any associated costs. These steps are sequential so make sure to complete them in order.

Step 1: Confirm your state’s requirements

First up, you need to research the requirements for real estate professionals in your state. Luckily, this process is entirely free. There is no national real estate license. Rather, you will need to register in the state where you want to work. Some states offer reciprocity, meaning that you can use your license in multiple states. There is a separate process to follow if your state indeed offers reciprocity. New York has reciprocal licensing agreements in place with nine states. There are:

• Arkansas
• Colorado
• Connecticut
• Georgia
• Massachusetts
• Mississippi
• Oklahoma
• Pennsylvania
• West Virginia

Even if you don’t plan to practice in another state, it’s always helpful to know your state’s reciprocity terms. All of the necessary information should be available through your state’s real estate regulatory office. While requirements differ by state, most states have the following requirements:

• Age – In most states, you will need to be at least 18 or 19 years old to work as a real estate professional.
• Education – In most states, you will need either a high school diploma or GED to work as a real estate professional.

As you continue your research, you should also look into your state’s requirements involving:

• Pre-licensing courses
• Post-licensing requirements
• Exams
• License application fees
• Background checks
• Continuing education
• Disclosing criminal history

Once you have a full understanding of your state’s requirements, you can move forward.

Step 2: Complete a pre-licensing course

Although you don’t need a college degree to become a real estate professional, you will need to complete pre-licensing coursework before taking the licensing exam. This is a requirement in every state, but the total number of hours varies from 40 to 300. For example:

• Texas – 180 hours
• California – 135 hours
• New York – 75 hours
• Georgia – 75 hours
• Florida – 63 hours

These courses teach things such as real estate principles, vocabulary, and practices as well as legal considerations. The cost to complete this pre-licensing coursework depends on which type of class you choose, but it can cost about $350 or more. There are multiple methods to complete these course hours, including:

• Community college classes
• Traditional real estate schools
• Online classes

Step 3: Pass a background check

Step three is pretty simple. Once you complete your pre-licensing coursework, you should be ready to take the licensing exam to receive your license. First, however, you will need to complete a background check. While the specifics vary by state, this background check can include:

• Fingerprint check
• Criminal record report

Step 4: Complete the license exam

If you pass your background check, then you can move forward and take your license exam. The cost is between $100 and $300. Your state’s real estate commission website will have details about how to register for the exam. 

These exams are completed on a computer and have multiple-choice questions. The total number of questions and timing differs between states; however, there are generally 60 to 100 questions per section. You will need to bring a calculator to complete math-based questions involving subjects such as calculating prorated taxes. Most states divide the exam into two main sections:

• Federal real estate laws
• General real estate principles and state-specific laws

These two sections are scored separately, and you need to pass both sections to pass the overall exam. You can retake the exam, but the number of times and how long you must wait in between varies by state. In Florida, 50 percent of exam-takers fail on their first try. Luckily, there are sample tests and sample questions available through pre-licensing courses and online through real estate commissions.

Step 5: Apply for your license

Whether you passed your exam on your first try or after multiple attempts, you can now apply for and activate your real estate license. This step is essential because you cannot legally work as a real estate agent without your license.

This will cost between $200 and $400. You will need to send your license application to your state’s real estate regulatory organization for approval. They will then mail you your real estate license certificate and add your name to the list of licensees on their website.

Step 6: Become a member of a real estate brokerage and multiple listing service

Once you’ve obtained your real estate license, you will not be able to work as a real estate agent without supervision. Rather, you will need to join a real estate brokerage where a real estate broker will oversee your work, ensuring that you follow all legal and ethical requirements.

Similar to the distinction between Realtors and real estate agents, all real estate brokers are real estate agents but not all real estate agents are brokers. Real estate brokers must complete additional training and obtain their broker license. Then, they can work independently. They can also hire real estate agents to work for them. After you’ve worked under a real estate broker for several years, you can apply for your license to become one and work independently if you wish. 

The estimated costs to join a brokerage can vary significantly, from $25 to over $500 per month. You will most likely be paid a commission for your real estate transactions, rather than an hourly wage. It is also uncommon to receive benefits. Since adding new agents involves no cost to the company, it is relatively easy to join one.

Be aware of additional costs associated with joining the brokerage or your business in general such as:

• Desk fees
• Costs associated with tech such as your website
• Marketing materials such as business cards
• Annual license renewal fee
• Continuing education costs
• Lockbox fees
• Multiple listing service membership fees

Multiple listing services allow you to complete essential tasks, such as:

• Listing properties on aggregate websites such as Realtor.com®
• Finding property tax information
• Exploring market trends
• Looking at listings before they go on the market

The cost can be steep and range significantly. For example, in Southwest Riverside County in California, annual dues are only $220. On the other hand, in the Metropolitan Regional Information Systems, which includes Maryland, Virginia, DC, the annual dues are over $1,000.

Despite these costs, real estate brokerages and multiple listing services are essential to your success; just make sure to budget for the associated costs accordingly. Take the example of Casey Van Iten, a real estate agent who transitioned into the industry from her previous work in marketing.

For Van Iten, the resources provided by her brokerage and multiple listing service were integral to her growth and success. She recommends that novice agents take advantage of the built-in training offered by multiple listing service systems as well as any additional programs such as customer relationship management (CRM) technology.

Step 7: Join NAR 

Here is where the real estate agents and Realtors diverge. If you follow steps one through six, you are a licensed real estate agent. If you’d like to go one step further and become a Realtor, then you will need to join the National Association of Realtors (NAR).

The National Association of Realtors has over a million members that engage in the real estate industry, including:

• Appraisers
• Brokers
• Counselors
• Property managers
• Salespeople

That makes it the largest trade association in the United States. Members must follow a code of ethics and pay a membership fee of around $185 annually. Despite this cost, many real estate agents choose to join because of the associated credibility and other benefits such as:

• Continuing education opportunities
• Business tools and discounts
• Market data
• Realtors Property Resource (RPR)

The Realtors Property Resource is the United State’s largest real estate database. Using public records, it includes invaluable information regarding:

• Foreclosures
• Liens
• Mortgages
• Schools
• Zoning
  
  

Become a neighborhood expert 

Whether you’re a broker, agent, or Realtor, you know that community is at the heart of the real estate industry. Melissa Vasic, a lead buyer’s agent at Keller Williams in Chicago quickly learned that lesson when she began her real estate career. Her biggest lesson as a new agent was regarding networking. She emphasizes that it’s crucial for agents to establish themselves as neighborhood experts and grow their database of potential clients constantly.

One way to tap into the neighborhoods most important to your business is through Nextdoor. Grow your local reputation by connecting directly with families and individuals looking for their new homes and use your expertise to become the go-to neighborhood expert.  Share tips and tricks and upcoming events with free Business Posts, and communicate directly with potential clients by promoting a Nextdoor Ad. Once you have your real estate license, you can get started on Nextdoor by claiming your free Business Page.