According to the National Association of Realtors®, 5.64 million existing homes were sold in 2020. And, US Census Bureau data shows that in 2020 alone, 822,000 new construction homes were sold. With that in mind, there has never been a better time to get in on the action and get a real estate license. According to Indeed, a real estate agent’s current average base salary is $94,914. Yet, there is no limit to how much money a real estate agent can make once they have completed their state’s real estate licensing requirements and started their career. What is a Real Estate License? A real estate license is a state government-issued authorization that allows brokers and agents the legal right to represent a buyer or seller during a real estate transaction. State licensing ensures that the real estate agent meets specific fiduciary standards. It assures the buyer or seller to work with someone who has the minimum real estate expertise. Although the requirements for obtaining a real estate license will vary from state to state, the general steps are as follows:
Complete all of your state’s pre-licensing education requirements
Submit an application for a real estate license and to take the real estate exam
Pass the exam, get your license
Sign with a real estate brokerage What Can You Do with a Real Estate License? Once you have obtained your real estate license, it opens the door to a unique set of career and money-making opportunities unmatched in most other industries. Being a real estate agent offers you the chance to work with lots of different people, the opportunity to be autonomous in your career, and the satisfaction of being able to help the people that you ultimately represent. But, the benefits of being a licensed real estate agent don’t stop there. Here are a few other ways that having a real estate license can come in handy: Become Eligible for Real Estate Jobs There are many career opportunities throughout the real estate industry nationwide. To qualify for most real estate jobs, you must have a real estate license. Some of the most common real estate jobs that you can get with a real estate license include:
Real estate agent
Real estate broker
Real estate appraiser
Real estate investor
Represent Yourself in the Real Estate Transaction A licensed real estate agent can represent themselves when buying and selling, generally speaking. But, a proper disclosure is required, and the agent should be mindful of any conflicts of interest. It is best to consult a real estate broker or attorney before representing yourself in a transaction and be sure that you have reviewed all of your state’s laws concerning the matter. Early Access to the MLS The Multiple Listing Service (MLS) that helps facilitate transactions between brokers. Because it is owned and operated by a collective of Realtors®, MLS only grants access to its members due to security concerns and the operational costs of running the massive database. Once you have obtained your real estate license and began your career, you have an opportunity to have early access to the MLS database. Access to this database will give you a chance to get early access to high-demand properties for investors before the listings go public. Professional Credentials In addition to the jobs that require a real estate license as a qualification, being a licensed real estate agent is a great way to stand out in the job market, regardless of the career you are pursuing. Because states hold licensed real estate agents to a certain standard of integrity and honesty, potential employers can be confident that the person they are hiring meets this threshold. Also, having a real estate license is a mark of expertise in the field. So, any industry that even remotely deals in real estate will be happy to have a licensed agent on their team. Having a real estate license under your belt can be helpful if you’re looking for a job at an attorney’s office, an investment firm, certain government agencies, and in any number of industries. Even if you don’t pursue a direct real estate career, having this credential on your resume is a plus, no matter how you look at it. Get Referral Commissions A referral commission, also known as a referral fee or a finder’s fee, is a commission given to the middleman in a real estate transaction. The referral commission varies and is usually a percentage of the property's final sale price. Suppose you are a licensed real estate agent and work for a broker. In that case, you can receive commissions whenever you facilitate a successful relationship between a client and another agent. Making money based on referral commissions IS THE PERFECT SIDE HUSTLE, especially if real estate isn't your full-time job.
Real Estate License vs. Realtor® License While the licensing requirements for a real estate agent and Realtor® are essentially the same . To become a Realtor®, the agent must be a member of the National Association of Realtors®. To call yourself a Realtor®, which is a nationally recognized and respected title, you must meet the following requirements:
Maintain an active real estate license
Actively work in the real estate industry
Have a clear criminal and civil background for at last seven years
Complete a Realtor® orientation course
Agree to follow the organization’s strict code of ethics
Pay membership dues
Real Estate License vs. Broker’s License Real estate brokers are licensed agents who have passed a broker exam and obtained a real estate brokers license. The fundamental difference separating a licensed real estate agent from a licensed real estate broker is the fact that a broker is permitted to own a real estate firm or act as an independent real estate contractor. A licensed real estate agent may only operate under the direct supervision of a licensed broker.
Final Thoughts on a Real Estate License Choosing to pursue a career in real estate, either as a licensed real estate agent or as a licensed real estate broker, can be financially rewarding. It can also be a challenge. The good news is that so many unique opportunities exist in the industry for licensed professionals. Obtaining a real estate license offers the chance to become an agent, an appraiser, or even an investor. You can find your niche working exclusively with residential properties or commercial buildings. The sky is truly the limit. Remember that success in the real estate industry will take hard work, but the payoff can be incredible.
What is a real estate license? A license is a certificate of education that qualifies you for work in the real estate industry. It opens up career opportunities and is a great way to earn a good living.