If you are interested in beginning a career in the real estate industry, you will need to acquire the appropriate real estate licenses. In order to facilitate real estate transactions, a person must have the proper training and knowledge of the rules, regulations, and procedures. Each state requires real estate professionals to earn licenses before they can legally carry out these transactions.
Getting a real estate agent license means putting in course hours and passing a real estate exam, which can be very difficult. Taking classes from one of the highly rated real estate schools in your area will help you prepare for the real estate license exam and will give you a strong foundation on which to build your career.
However, you may have noticed there are several different kinds of real estate licenses you can pursue.
As New Jersey’s top-ranked real estate school according to Google Reviews, Garden State Real Estate Academy often gets calls that go like this:
“I want to signup for real estate classes, but what sort of real estate license should I get?”
Here is a brief guide to the different real estate licenses available:
The Initial Real Estate Course
The first step toward getting any kind of license is to sign up with a real estate school. Each state has different course requirements. New Jersey’s real estate commission requires 75 hours of pre-licensing education. New York and Pennsylvania also require 75 hours, while Delaware requires a 99-hour pre-licensing course.
You must then pass the state’s real estate exam, undergo a criminal history background check and join with a sponsoring broker, who will attest to your integrity and promise to supervise you as a part of your actual license application.
Real Estate Salesperson License
Your entry-level real estate license will be as a “salesperson”. A salesperson is allowed to sell, lease, or assist clients in any sort of real estate exchange. Regardless of whether you want to sell a home in Cape May, rent a condo in Cherry Hill, or lease industrial warehouses in Hackensack, you only need a salesperson license to do so.
Most real estate agents use their salesperson license for their entire real estate careers—sometimes for decades.
Referral Agent License
A referral agent only applies to New Jersey real estate agents. If a salesperson feels they do not want to actively have a real estate career, but they still want to benefit from the sphere of influence they have created, they can become a referral agent. Note that the referral agent must still have completed all the same requirements as a salesperson.
Legally, a referral agent must resign from their real estate brokerage and rejoin a brokerage headed by a managing broker which only employs referral agents. These real estate brokers have the official license title, “Salesperson Licensed with Real Estate Referral Company (SLWRERC).” Many brokerage firms own their own referral agent company.
A referral agent cannot take any active role in a real estate transaction. They cannot hold open houses, present listing proposals, or take any other direct action with a client or prospective client. What they can do is refer every person who contacts them about buying, selling, or leasing properties to their broker. The broker will then assign the client to another real estate agent—who could be in the same office or in another location across the country.
After the transaction closes, the referral agent receives part of the commission. Commissions are always negotiable, but typically they are 25% of the sale amount. This is the easiest money a real estate agent can make: by simply making a phone call to their broker with the referral client’s details, the agent could end up with a nice commission check amounting to several thousand dollars.
The other benefits of holding a referral agent license are that they do not need to maintain membership in the Board of Realtors® or the Multiple Listing Service (MLS), take the continuing education classes required for active agents, or pay for errors and omissions insurance. This could easily save them $1,200–$1,500 a year. If the referral agent ever decides to resume their real estate career, they can make up their missed continuing education courses and apply for reinstatement of their real estate salesperson license.
A person holding a real estate salesperson license who has practiced as a full-time agent for the past three years can take a 150-hour broker licensing course, pass another real estate state exam, and then apply for a broker license.
Why should a Realtor® get a broker’s license?
Every real estate agency and every property management company must be led by a licensed real estate broker. That person is called the Broker of Record, and they are responsible to the Real Estate Commission for all activities of the brokerage and all licensed and unlicensed employees of the firm.
There may be several people in a brokerage who have a broker’s license, but only one of them is the broker; the others are called Broker-Salespersons in New Jersey or Associate Brokers in other states.
Garden State Real Estate Academy for All Your Realtor® License Needs
If you are thinking of getting your real estate license—be it as a salesperson or a broker, Garden State Real Estate Academy is the best place to start. We offer everything from pre-licensing courses to continuing education classes. Not only will you learn general real estate principles to help you pass the final exam and get your license, you will also be instructed by a successful real estate professional who can give you real world advice.
If you need a New Jersey real estate license, you can choose from daytime or evening classes at www.GSREA.com and click on “Salesperson” licensing classes.
For information on the real estate school’s upcoming New Jersey pre-licensing courses, click here: https://www.gsreacademy.com/pre-licensing-courses/
If you need to earn a real estate license in a state other than New Jersey, Garden State Real Estate Academy also offers online self-study real estate licensing classes in 21 states through our partnership with The CE Shop. And while New Jersey does NOT allow self-study pre-licensing classes, we do offer self-study pre-licensing classes in 25 other states by clicking here: https://gsreacademy.theceshop.com/pre-licensing.
David C. Forward is a licensed real estate broker and instructor. He was first licensed as a Realtor® 34 years ago. During his career, David and his business partner sold more than 500 homes in South Jersey. He is now School Director of Garden Real Estate Academy, has won numerous awards for real estate sales, and is a much-requested public speaker who has addressed audiences on six continents. His 20th book Zero to Hero: Winning Strategies for New Real Estate Agents to Become SuperStars in Their First Year was released this month.