A real estate license is a necessary piece of the puzzle to help you achieve your dreams of becoming an owner-finder or seller of homes. While some may consider it expensive, what really matters is how you use your license and what services you offer to others.
There are two main types of licenses for brokers in America — sales agent licenses and residential broker licenses. Both require passing certain tests that measure knowledge of the field as well as ability to deal with others.
Sales agents represent sellers while brokering deals for houses for them. As such, they are also called listing agents because they provide property listings to other brokers and home buyers looking for properties.
Brokers who have only one type of license can work exclusively as either a listing agent or a sale agent but not both at once. This isn’t always practical since most people don’t know which side of the business their dream house comes from!
Fortunately, there are times when being able to do both makes sense so knowing which version of each license you already hold is important.
Organization of the Utah Real Estate Association
The Utah Realtors® Association (URA) is one of the largest real estate associations in America, with over 105,000 members across all stakeholder levels. This includes agents, brokers, investors and educators.
The URA was founded in 1952 to promote excellence in professionalism for its members through education, communication, and self-regulation. As more people start investing in or buying a home, it is important that they understand the qualifications and licensing requirements for professional realtors.
Many states require only that individuals must be licensed as a broker before they can work as an agent. But most require that those professionals who call themselves “realtors” are also certified by the National Association of REALTORS®, which requires both certification as a Broker and Agent.
Utah Real Estate License Requirements
As mentioned before, to be licensed as an agent you need to have at least one year of experience working with real estate agents. Beyond that, there are several different licenses available. These include Licensed Agent, Associate Producer, Listing Agent, and Salesperson. Each of these requires additional courses and exams to qualify.
The differences between each license level are what makes being a professional real estate agent possible. For example, while all agents must take certain courses and pass tests to become a licensed agent, only those with the more advanced licenses are allowed to represent clients as buyers or sellers directly.
These extra licensing requirements ensure that individuals who work as real estate agents possess enough knowledge about the market and how to effectively use it.
Examples of licenses
Licenses vary by state, but most require you to be at least 18 years old, have residency within the state, and proof of your education or work background related to real estate.
Most states also require you to pass an exam that tests your knowledge about how to handle various situations involving buying, selling, and/or renting a home. You will usually need to show that you can do this professionally so that others can rely on you as an expert!
Some states require you to go through additional training and certification as well. This is particularly important if you want to become a professional broker or agent. Only then can you use the term “real estate professional” instead of just “agent.”
Brokers are not limited to working for big companies with national brands, like REI (Real Estate Investors) or Coldwell Banker. Some small business owners start their own brokerage firm instead.
There are many ways to become a successful real estate professional, so don’t feel like you must join an already established company if you don’t know anyone who works there.
Cost of a license
The cost to take your real estate exam in this state is determined by two main factors — how many questions you have, and whether you are taking one of the three basic exams (practical, theory, or both).
The total price depends on the number of questions you have beyond the initial entry level test which is known as the Basic Entry Level Test. This test has a fee of $150 per examination period, or 90 days. A second entry level test costs an additional $75 per day for each additional 30 days after that initial time frame.
So if you wanted to be fully licensed, then there would be a 1 year window during which you could take the 2nd entry level test. You would pay a total of $675 for it. If you only needed to become licensed partially, you can do so at any time within the first year. Your total licensing fees will depend on how much credit you have towards your current license.
Note: While studying for the exam, I was able to get through about half the tests for free using a study tool called MyTestPrep. They offer unlimited practice tests and a degree of confidence due to their virtual testing platform.
Selling a home without a license
Even though it seems very straightforward, selling your house can be tricky for those that are not licensed as real estate agents or brokers.
Selling a property is an expensive process that usually requires you to advertise the house, meet with potential buyers, negotiate terms with them, and then close on a sale.
But before you begin looking for houses to sell, you will need to have at least one year of active business licensing as a broker or agent. This includes having your sales contract ready, proof of residence such as a passport, driver’s licence or birth certificate, and photos of the house!
Your seller’s agent must also represent their interests, something that is easily forgotten when you are trying to make money.
Selling properties as a team
As mentioned earlier, being a real estate agent is not only about listing houses for sale or buying a house to renovate and sell, but also representing sellers and buyers. This is called seller representation or brokerage, respectively.
Seller representatives are paid by the selling owner, while buyer’s agents are paid by potential buyers. If you’re already an agent that sells your own property, you can choose to become a seller’s representative or a buyer’s agent instead!
As such, becoming a professional real estate agent requires both sales agent licensure and certification as well as registration with one of the many brokerage firms that handle seller’s services. There are even some companies that offer both at once, making it easy to launch into business right away.
Sales agent licensing requirements in Utah depend on whether you will be acting as a principal (seller) or non-principal (buyer) person. Principal people include individuals (husbands, wives, etc.) who you’ll be helping to purchase a home property for themselves or possibly investing in a rental property as well. Non-principals are people like investors who need help finding a home they want to buy.
There are two types of licenses available: residential and commercial. The former applies to individual homes, whereas the latter covers larger lots and buildings. Both require passing a test and paying fees before being granted permission to work.
Documenting the sale
After completing your buyer’s agent training, you must be able to document the sale of a home! This is an important part of selling a house because it helps ensure that everything goes smoothly and your seller gets their money back.
A broker must have proof that they represented the seller during the sale process, as well as documentation of the sale.
This can include taking pictures of the property, showing it to potential buyers, negotiating on behalf of the seller, etc. Brokers are also required to keep copies of documents for up to one year after representing the seller so if something gets lost, at least we’ll know where to look.
In fact, most states require brokers to retain these documents per statute.
License renewal
After one year, your license will be due for renewal. This is typically done at the state level every two years unless you are under criminal investigation or have had your license revoked.
Your agent’s license will be automatically renewed within 30 days of when it expires, so make sure to let everyone know that you’re looking out for each other!
In addition to renewing your own real estate license, there are some extra requirements for agents who want to perform transfer agency services. These include being licensed as an Agent Service Broker and having Transfer Agency Licenses.
Agent service brokers must also meet additional qualifications like passing the broker certification exam, but they do not need to re-enter into another licensing program after completing their certificate.
