Why Having a Real Estate License is Important
One of the most lucrative industries to be in at any given time is real estate. The buying and selling of property is highly competitive and it requires great sales and marketing skills to be successful.
It also requires proper licensing. You must have the proper education and knowledge of the laws of real estate before you begin your career. Keep in mind, the requirements for a license will vary with each state.
For some programs, you only need a high school diploma to get started with your training. There are dozens of online schools that offer programs based on your state’s education and license requirements. However, there are also college courses in real estate that can add to your educational resume.
Because requirements vary by state, we can only provide a general list of coursework that most real estate agents or brokers need:
- real estate law
- property management
- real estate investments
- real estate appraisal
- property development
There are additional classes in financing, legal matters and sales that would be beneficial to anyone seeking a career in real estate.
How to get a Real Estate License
Because the regulations vary per state, we will use an example here. The following include the requirements for getting a real estate license in the state of Virginia.
According to the Virginia Real Estate Board Licensing Regulations, the following qualifications must be met to be awarded a real estate license in Virginia:
- All applicants must be trustworthy, honest and have a solid reputation.
- Applicants need to finish 60 hours of real estate education and pass two exams.
- Applicants are subject to fingerprinting and a background check for convictions.
- The applicant must be a minimum 18 years of age.
- They must have a GED or high school diploma.
Basic courses would include the Principles of Real Estate and Real Estate Practice, Real Estate Appraisal, Real Estate Brokerage and Property Management. The legal courses needed would include the following:
- Law of Agency
- Law of Contracts
- Legal Aspects of Real Estate
- Finance Law (loan applications, closing costs, mortgages)
- Estate Law
Each class will teach you about the legal requirements for buying, selling or otherwise working with real property. Once you have completed your coursework, you would need to pass the Real Estate Licensing Exam. The exams in each state will vary in cost and time commitment. In Virginia, the cost of the exam is around $85. In order to apply for your license after you pass the exam, you would apply to the state and pay a fee of around $170.
Why You Need a License
While state laws may differ, the definition of what it means to practice real estate depends on whether you act on behalf of someone else in a transaction. Any time you act on someone else’s behalf in buying or selling real estate in order to earn a fee, commission or other payment, you are practicing real estate. To do this legally you must be licensed. If you are not licensed, you have committed a crime – and it is a felony.
The states provide various penalties when it comes to participating in real estate without a license. A person convicted of this crime will face several potential punishments, though the severity of punishments will vary depending on the seriousness of the case.
- Jail time. Whether an offender goes to jail versus prison will depend on the extent of the offense.
- Monetary fines. Misdemeanor fines are around $1000 and felony fines are $5000 or higher.
- Court ordered probation. Probation may be ordered in lieu of a jail sentence. If you get probation, you must pay fines and court costs, make restitution to the victim of the fraud, hold a steady job, report to a probation officer and never work in real estate again.
- Paying restitution. If you have defrauded someone by representing them as an unlicensed real estate agent, you will be responsible for not only returning the money they paid you, but also court costs and the requisite fines based on your sentence.
- It is clear from these examples that getting licensed is the preferred way to practice in real estate. There are various career paths you can take with a real estate education.
Careers in Real Estate
Most people with real estate licenses act as realtors or brokers. Realtors are the equivalent of sales people. They find houses that need selling, make a contract with the owner, market the home, give tours to potential buyers, hold open houses, list the home online, etc.
Real estate brokers own their own real estate companies (brokerages) and have a team of realtors working under them, along with mortgage specialists, appraisers and closing specialists.
Real estate license holders can also work as appraisers, assessors or property managers, depending the state where they live.
There are many opportunities in the world of real estate, but make sure you are taking the proper courses and earning your license legally. Careers in real estate can be quite lucrative, but you must earn your license before earning money.