How Do You Get a Real Estate License in Multiple States?

For some real estate agents, getting a real estate license in multiple states makes perfect sense. For example, you may live near the state line and cross it on a daily basis. On the other hand, you may be moving out of state and wondering what it means for your real estate license. Can you transfer it to your new state? In this article, you'll find useful information on how to get your real estate license in multiple states.

Real estate license reciprocity

Real estate is a state-specific industry. That means that real estate laws vary from state to state, and each has its own licensing requirements. Before becoming involved in a transaction in another state, you should consult legal counsel. If you fail to observe the law, it may result in loss of commission or jeopardize your license. So, before you establish yourself in a new state, be sure to understand its laws.

Don't worry; in most cases, you won't have to start the education and licensing process from scratch. That's because many states offer "license reciprocity". That means that if you already have an active real estate license in one US state, you can apply for a real estate license in a new state without taking all the state-required pre-licensing real estate courses.

Usually, you have to apply for a new state license and take the state test without retaking the coursework. Whenever reciprocity applies, the requirements for licensing are reduced. For example, a customer-service-oriented real estate agent might just need to take a few hours of classes from an online school to secure a license in a new state.

Reciprocity varies from state to state

Have in mind that reciprocity varies from state to state, so there are:

  • No reciprocity states - Those states deny reciprocity to all out-of-state licenses (Arizona, California, Hawaii, Indiana, Kentucky, Michigan, Montana, New Jersey, South Dakota, Texas, Vermont, and Wyoming).
  • Full reciprocity states - Those states allow agents to transfer their license from any state (Alabama, Alaska, Colorado, Delaware, Georgia, Kansas, Kentucky, Maine, Mississippi, Missouri, Virginia, Washington).
  • Partial reciprocity states - Those states require limited education and examination for real estate agents from reciprocal states (all states that are not mentioned above).

The best advice is to check with your state’s licensing board for specific requirements.

USA map - States with their capitals.

Different real estate license reciprocity and portability laws apply in each state.

Real estate license portability

Some states have real estate license portability allowing out-of-state real estate agents to work in those states to some extent. It is different from reciprocity since it allows agents to cross the border state and conduct a real estate business. Still, it’s not a long-term solution for those relocating permanently to a new area. In general, there are three kinds of portability laws: cooperative, physical location, and turf states. Each of these classifications defines different circumstances under which an out-of-state real estate agent may work within the state.

Cooperative States

In cooperative states, you may be required to have a co-brokerage agreement with a broker licensed in that state. Then, you'll be able to conduct real estate business - property showings, closings, negotiations, and other transactions. However, be sure to familiarize yourself with local requirements before committing to a client looking for property in a cooperative state because some limitations are still possible.

Physical location states

The physical location states only allow you to help your client remotely while you're located in the state in which you're licensed. Since most aspects of the real estate job can be done remotely, that shouldn't be a problem. You may not enter the state for showings, closings, or any other real estate transaction. You can send your clients to view properties, submit offers on their behalf, and negotiate transactions as long as you remain in your state.

Turf States

There are some US states that do not allow out of state real estate agents or brokers to conduct any business in their state:

  • Kentucky
  • Missouri
  • Nebraska
  • New Jersey
  • Pennsylvania
  • Utah

Without their state's license, you can't work in person nor even remotely. If you have a client from one of those states, you can refer them to a real estate agent/broker who has a license in that state. Or, you can decide to apply for a license right there by yourself if you have the time and money.

A businessman doing research on his laptop on how to get a real estate license in multiple states.

Researching local laws is crucial if you're planning to move or expand your business.

Conducting business with real estate license in multiple states

Building your businesses in other states means more commissions. However, it also means learning about new, local laws and encountering different document formats, varying requirements, etc. Conducting business for a client who wants to buy a property in another state is tricky either way. Furthermore, local agents may try to poach their business. Also, out-of-state real estate practices are often complex. So, look into state-specific license reciprocity and portability laws thoroughly before determining whether you'll keep a client. If you find local regulations frustrating and client needs just too complicated, consider referring that client to a local agent from your real estate network.

When you have a license that allows you to practice real estate in another state, you must pay income tax in another state. Assisting clients with out-of-state properties may not be so difficult if you have solid experience, a great lawyer, and a tax assistant. You can also seek the supervision of a broker experienced in out-of-state transactions.

A real estate agent showing a property to a family.

Getting your real estate license in multiple states will help you grow your business and expand your network.

Getting a real estate license in multiple states will give you more freedom to move if you have the opportunity to do so. When planning an interstate move, you can decide to choose a state with reciprocity. Or, you can pay to go through the licensing process in the new state. However, make sure that you plan this process well and have appropriate assistance. Professional interstate movers can help you have a simple relocation across the country and avoid stress. After moving, packing, and settling in, you can continue working and making income from your real estate business.

All in all

Getting your real estate license in multiple states will allow you to create your own opportunities and set your own schedule. Also, you'll be able to enjoy the perks of living in your dream location while still having clients and closing deals.

 


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