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License Requirements for Real Estate

While no license is required to own, invest in, purchase, or sell real estate for yourself in the United States, state laws impose licensing requirements to transact in property for or on behalf of others. Additionally, the capacity and extent to which you represent a third party in a real estate transaction will determine whether you need a salesperson license (also known as a realtor license), a broker license, or a law license.

Before determining what type of license is necessary, it is helpful to understand the general distinctions between a law license (awarded by a state bar association), a real estate salesperson license, and a real estate broker license. A state bar license permits a lawyer to practice law in their state and in “sister states” with license reciprocity under the Uniform Bar Exam (UBE). If you are unsure whether an attorney, realtor, or broker is the right person to assist you with a property matter, the best place to start is to get a free consultation with a real estate lawyer in your state.

The Difference Between an Attorney, a Real Estate Agent, and a Real Estate Broker

real estate attorney is licensed to review legal agreements (including real estate purchase agreements), go to court to litigate property disputes, and correspond on behalf of a client with an opposing buyer or seller about a home purchase.

A real estate salesperson license allows a realtor to solicit and negotiate the purchase or sale of real estate to prospective buyers and sellers.

A realtor, however, cannot act without a sponsoring broker. A real estate broker license is required for operating a real estate agency. Ultimately, every real estate transaction in which a realtor participates must be supervised and listed through a licensed broker (real estate brokerage agency).

Requirements for Licensure

A real estate law practitioner will have typically attended law school for three years, passed the bar exam in their local state to become licensed, and garnered sufficient experience in practicing property law before engaging in matters of real estate.

Realtors (real estate license holders) will usually need to complete various college-level pre-licensing courses (sometimes at real estate school) and pass their state real estate license exam before obtaining licensure. Upon submitting an application fee, all license holders are subject to a rigorous background check, irrespective of the licensing exam or pre-licensing education required by their respective license application.

Many states, such as CaliforniaTexasFloridaGeorgia, and North Carolina have regulatory agencies that oversee real estate salesperson and/or broker licensing. While each of these jurisdictions imposes distinct requirements for salespersons and brokers to become licensed, all states (for example, New York) require a minimum number of units or hours in real estate education courses before qualification for their respective real estate exams. Because a real estate broker has the heightened responsibility of overseeing a brokerage agency and supervising individual salespersons, a broker’s license will typically require that an individual have several years of experience as a real estate attorney or salesperson before qualifying for the broker’s exam.

Upon being licensed, attorneys remain members of their local state bars for life as long as they continue to pay yearly license renewal fees and satisfy continuing education requirements. Similarly, real estate license holders must participate in mandatory continuing education courses in various real estate principles. While attorneys are responsible for paying bar fees yearly, real estate salespersons and brokers typically pay renewal fees once every two to four years (depending on the jurisdiction) to maintain their real estate careers.

Similar to lawyers in some states, real estate licensees will not always need to pass comprehensive state exams in the local state where they intend to act as salespersons or brokers. For example, Florida and Georgia have a real estate reciprocity program that allows real estate licensees easier access to practice across the two states. Similarly, for attorneys, Texas allows some reciprocity by allowing more direct admission for lawyers who have met specific legal qualifications in their home states.

Do Real Estate Attorneys Need a Real Estate Salesperson or Broker License?

State law and the extent of the attorney’s involvement in a transaction are both factors in determining whether additional licensure beyond an attorney’s state bar license is warranted.

For example, under Texas Administrative Code § 535.31, “An attorney licensed and eligible to practice law in Texas is exempt from the requirements of the [Real Estate License] Act but cannot sponsor real estate salespersons or act as the designated broker for a licensed business entity unless the attorney is also licensed as a real estate broker.”

On the other hand, while California practitioners must be licensed as salespersons or brokers for the respective real estate activities they transact on behalf of others, attorneys in this jurisdiction enjoy a waiver of the minimum college-level coursework that is generally required to sit for the exam for becoming a real estate salesperson or broker.

Ultimately, licensure across the various state regulatory agencies varies on the level of activity a real estate professional conducts with respect to a transaction. Generally, an attorney will always be qualified to review documents and negotiate contractual terms in a real estate purchase transaction.

Additionally, because attorneys are empowered to open trust accounts on behalf of clients, they can hold money as an intermediary fiduciary (similar to escrow) to the extent that informed consent is obtained and no conflicts of interest arise between buyers and sellers. Alternatively, real estate salespersons are more limited in their ability to review paperwork. Their activity is usually limited to the broad solicitation of buyers or sellers for properties listed by their supervising broker or sponsoring broker (brokerage agency).

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