Real estate agents living near their state’s border can expand their client base by getting licensed in multiple states. But how does this work? What are the ramifications of having a license in two (or more) states? Keep reading to learn about the benefits and process.
Key Takeaways
- Real estate agents can expand their reach by obtaining licenses in multiple states, either by using portability and reciprocity rules or by completing the licensing process in each state.
- States have different portability rules—cooperative, physical location, and turf states—each dictating the scope of activities allowed for out-of-state agents.
- Reciprocity simplifies the licensing process in some states, allowing agents to avoid the full licensing process, though the terms vary with full, partial, and conditional reciprocity.
- To maintain licenses across states, agents must research reciprocity rules, meet state-specific requirements like exams or background checks, and stay compliant with renewal and continuing education standards.
Can You Be a Real Estate Agent in Multiple States?
Yes, you can be a real estate agent in multiple states.
It’s worth noting that you may be able to use the state’s portability or reciprocity rules to perform some transactions in another state. However, there’s certainly a benefit to having a real estate license in multiple states.
“As a licensed real estate agent in Kansas City, living on the Kansas side, it only made sense that I would want to earn my Missouri license as well,” said Brian Jones of 1838 Real Estate. “Being licensed in both states allows me to serve clients selling a home in Kansas and purchasing a house a few blocks away in Missouri.”
Here are general guidelines for real estate agents wanting to work in multiple states.
Understand Portability and Reciprocity in Real Estate
If you wish to work as a real estate agent in another state, you must understand the state’s rules for portability and reciprocity.
What is portability in real estate?
Portability refers to the rules allowing out-of-state agents to engage in limited real estate activities without being fully licensed. This might be an option for agents who have a one-time opportunity to close a deal in another state.
Generally, there are three types of portability rules.
1. Cooperative states
Cooperative states allow out-of-state real estate agents to work within their borders, provided they collaborate with a local broker. For example, Georgia is a cooperative state, meaning that an agent from another state can conduct business in Georgia as long as they work with a licensed Georgia broker.
Here’s a current list of cooperative states. Please note that cooperative states only allow real estate agents to work in a limited capacity within the state.
- Alabama
- Arizona
- Colorado
- Connecticut
- Georgia
- Indiana
- Kansas
- Kentucky
- Louisiana
- Maryland
- Massachusetts
- Mississippi
- Missouri
- Nevada
- New Hampshire
- North Carolina
- North Dakota
- Ohio
- Oklahoma
- Oregon
- Rhode Island
- South Carolina
- South Dakota
- Tennessee
- Texas
- Utah
- Washington
- Wyoming
It’s critical that you check the state’s current regulations before providing real estate services.
2. Physical location states
Some states allow out-of-state agents to handle transactions remotely as long as they do not physically enter the state to conduct real estate business. Florida is an example of a physical location state. An agent licensed elsewhere can help clients in Florida as long as they do so without being physically present in the state.
Here’s a list of states with these types of guidelines:
- Alaska
- Arkansas
- California
- Delaware
- Florida
- Hawaii
- Idaho
- Illinois
- Iowa
- Maine
- Michigan
- Minnesota
- Montana
- New York
- Virginia
- West Virginia
- Wisconsin
3. Turf states
In these states, real estate agents must have a local license to conduct activities within the state’s borders. New Jersey is an example of a turf state, meaning that out-of-state agents cannot legally work on transactions involving New Jersey properties unless they are licensed there.
- Nebraska
- New Jersey
- New Mexico
- Pennsylvania
Before conducting business in a state where you are not licensed, ensure you are able to work there.
What is reciprocity in real estate?
While the proceeding information might be helpful for agents who wish to conduct minimal business in other states, you might wonder how to earn another state’s real estate license. After all, marketing yourself as a licensed real estate agent in multiple states can be very beneficial.
Some states offer license reciprocity, which makes it easy for licensed real estate professionals to earn licenses in other states. License reciprocity agreements can vary, offering different access levels depending on the specific terms between states.
Here are the main types of reciprocity in real estate:
- Full reciprocity: Full reciprocity means the state allows licensed real estate agents from a specific state to practice without meeting additional requirements. The agent’s license is fully recognized, enabling them to conduct business freely.
- Partial reciprocity: In some states, agents must meet additional conditions, such as completing a state-specific exam or providing proof of education and experience, before they can practice in another state.
- Limited reciprocity: This form of reciprocity restricts agents to specific activities or transaction types in the other state. For example, agents may only be allowed to conduct certain types of transactions (e.g., residential but not commercial), or they may be required to adhere to specific rules and limitations set by the other state’s licensing authority.
- Conditional reciprocity: This reciprocity is granted under specific conditions, such as temporary business needs, relocation, or other circumstances. It may be time-limited or only apply to certain types of transactions.
- Mutual recognition: While not exactly reciprocity, mutual recognition means one state recognizes the education and experience of another state, but the agent still must meet additional requirements, such as passing a state law exam, to obtain a license.
Related Article: License Reciprocity Guide for Real Estate – 2024
Reciprocity rules can be very complex and confusing. It’s critical that you understand the regulations of the state in which you wish to practice before providing any real estate services.
How to Become Licensed in Multiple States
Each state has its own real estate licensing requirements and license reciprocity rules. Here’s a general outline of how licensed real estate agents become licensed in another state.
Step 1: Research the state’s reciprocity rules and licensing requirements.
Visit the state’s real estate licensing website to find reciprocity rules for the state where you are currently licensed. You may discover that you must pass the state portion of the licensing exam and complete a background check to become licensed in the additional state. In some cases, you may find that you must complete the entire licensing process to work as a real estate agent if the state offers zero reciprocity.
Still – you may uncover that the state where you wish to be licensed has residency requirements. For example, Texas and Arizona require real estate agents to be residents of those states to become licensed.
Step 2: Complete the license requirements.
Consider seeking the help of a national real estate school to help you complete your pre-licensing coursework – should some courses be required. At your own pace, online courses are the fastest and most convenient way to fulfill your educational requirements.
Even though you have already passed your state’s real estate licensing exam, you may need to pass all (or the state-specific portion) of the licensing exam for the additional state. The good news is that state-specific exam prep is available. You can buy an affordable exam prep package to help you pass the test the first time you take it.
You will most likely also need to pass a background check to get licensed in the new state, even if you have already passed one in your current one.
Step 3: Stay compliant and manage renewals.
All real estate licenses must be renewed periodically, but each state has a different renewal timeline and requirements.
You must complete continuing education and/or post-licensing educational requirements to maintain your license. To simplify the renewal process, depend on a national real estate school for all your continuing education needs.
Obtaining a real estate license in an additional state can significantly expand your business opportunities and client base, especially if you’re working in regions close to state borders or areas with high relocation rates. By being licensed in multiple states, you can seamlessly facilitate interstate transactions, attract clients looking to buy or sell properties across state lines, and tap into new markets. It also provides flexibility for agents who want to relocate or serve clients investing in different areas.
Do you need help understanding licensing requirements? Reach out to the real estate licensing experts at Colibri Real Estate School. Colibri offers at-your-own-pace pre-licensing, post-licensing (if required), and continuing education courses. Learn the licensing requirements and get started today with Colibri.
Source:
“Real Estate License Reciprocity and Portability Guide.” StateRequirement, September 5, 2024. https://staterequirement.com/real-estate/real-estate-license-reciprocity/#:~:text=Yes,%20you%20can%20use%20the%20states%E2%80%99%20reciprocity%20agreement%20to%20do.
