In some states, like California and Florida, you do not need a real estate license to practice real estate. But this is not the case everywhere! Most of us know that at least once as children when our parents told us we could never be an accountant or lawyer because we are too “little” – we needed their degree to prove we were qualified for the job. Unfortunately, they were wrong then and sometimes still are now.
In fact, depending on what state you live in, it is actually illegal to represent yourself as being fit for such a career without the proper licensing. This can range from general practicing law without having your licenses officially suspended or revoked, to selling residential or commercial property without possessing a broker’s license, to even acting as a business manager/owner for a company if you don’t have a corporate representative license.
Some states require only that you possess a license, while others ask that you show proof of training and certification, which is good. However, none require that you be actively working under licensure before getting involved in the profession.
This article will talk about how much it costs to become licensed in every state, both directly through tuition expenses and fees, and indirectly by earning income while waiting for your license, therefore including promotional earnings and loan repayment programs.
It is important to remember that just because someone else is licensed does not mean they are better than anyone else with no experience.
Registration with the state
To sell real estate in the United States, you must be registered to do so. This means that you need to fill out an application, take a test, and pay a fee to become licensed. However, most of these fees are quite nominal!
There is no cost to apply for your license if you already have one, or if you are registering as a broker instead of agent. But what about individuals who want to be agents but don’t yet have their licenses?
Well then, they can choose between being enrolled as brokers (with less responsibility) or agents (with more responsibility). It depends on whether you prefer more freedom or not!
Either way, both types of people will still need to complete several courses before being allowed to work independently. These courses include things like how to negotiate contracts, basic business law, and risk management.
Annual registration fee
The annual license registration fee for real estate agents is $225 per year, but you will have to pay this every year that you remain licensed as an agent. This includes when your broker or employer transfers you, so make sure to re-register then!
The cost of the exam varies depending on which state you are testing in and what level of sales associate you are (test taker option). However, it’s very typical to spend around $150 – $200 dollars.
This can be paid at the location where the test is given or through certification companies like our own here at Realty BOSS.
We recommend paying online ahead of time to avoid any hassles! That way you won’t need to worry about finding a place to go and purchase one. Simply log onto Amazon, google ‘realty boss test center’ or whatever platform they offer and you should find all the information you need.
General background information
Licensing is a complex process that varies from state to state, even within individual states! There are many different types of real estate licenses, at varying levels, for diverse individuals and businesses. Some examples include license level (or degree)ifications like certified professional appraiser or residential sales associate. Others such as broker’s licensure require additional credentials like being licensed in another field (such as banking).
While some states offer limited licensing options, others have an elaborate system designed to ensure that every person offering their services to the public is qualified and trustworthy. The amount of licensing you need will depend on two things: if you want to be a seller or buyer and what area of the market you intend to work in. For example, someone who wants to sell a house might only need a sellers’ license, but people buying houses usually need both buyers’ and brokers’ licenses.
Some states limit how many times you can re-license after receiving your initial credential, while other states don’t care.
Exams that must be passed before licensing
The two most basic exams for real estate agents are the General Business Licenses (GBS) and the Residential Sales Specialist Exam (RSS). Both of these tests can cost anywhere from $100 to well over $1,000 depending on how many questions they have.
The GBS is much more general than the RSS so it covers things like agent’s liability, business taxes, etc. While the RSS is very specific to selling homes, it isn’t free. You will still pay an exam fee but not as much as the GBS.
Establish a business plan
After completing your education, you must now establish yourself as an entrepreneur! Before becoming licensed, you needed to know how to manage your money, run a budget, and organize all of your things. Similarly, before being allowed to work independently, real estate agents need to have a business plan.
This includes having a solid understanding of the market, knowing what products and services are necessary for success, and figuring out where you can get these resources.
It also means making sure that you will be able to satisfy customers who buy or sell a house (or lots of houses)!
Having a business license is only half of the process; the other part is actually working at it! It’s easy to start talking about putting your plans into action, but sometimes people don’t follow through.
Be honest with yourself if you think that may happen here. You should not expect to become a real estate agent quickly, especially not without some training first.
But even more important than waiting for perfect timing is choosing to wait no longer than you have to.
Know your customer (KYC) policy
As mentioned earlier, before you can be licensed as an agent, you have to prove that you are of legal age and that you live within the state for at least six months. Beyond those basics, you must also agree to a KYC requirement! This is due to federal regulations that mandate every real estate professional disclose any past convictions or actions related to fraud or misrepresentation.
This includes things like falsifying income information, lying about assets, etc. So if someone lists their home as being worth $100,000 but you find out they only paid half as much for it, then you cannot work with them as their representative unless they correct their statements.
In addition to this, agents are required to report anything from suspicion of arson to murder. If these questions arise during the listing process or while you’re working together, you will need to let senior management know so they can take appropriate action.
As mentioned earlier, you do not need to be licensed as an agent to list properties or represent sellers. However, it is important to know how much liability each party involved in real estate has. For example, if someone comes looking for their house due to your listing, they can file a lawsuit against you as the agent.
Furthermore, if things go wrong during the sale of a property (no one shows up at the open house, etc.), then the seller can sue you for any loss incurred from dropping out on the deal or wasting time showing the home to potential buyers.
These lawsuits usually start with you being asked to pay the other person’s legal fees, which can add up quickly. It is best to be aware of such risks so that you are not sued too easily.
Luckily, there are some ways to protect yourself as an unlicensed broker like me. First, make sure that you are not doing business under an assumed name or using fake documents. Also, be careful about what information you share online – even pictures! People may use this information against you in a court of law.
Hopefully you have learned something new about real estate licensing in Kansas by reading our article! If you would like more tips on becoming a successful real estate professional, visit our website at ialawyer.