Real Estate License Reciprocity by State: All you Need to Know

Real Estate License Reciprocity by State: All you Need to Know

If you’re moving out of state, you might be swamped with a deluge of details. How to plan the move, the best dates to travel, where to go, what to do. If you’re a licensed real estate agent, there are further details you need to look into when crossing state lines. Does your real estate license work in your new state? Do you need to update it or transfer it? Can you even get a new real estate license in a state that you don’t yet live in?

As you might know, real estate licensing is specific state-to-state, an industry with a complex and varied set of rules. These rules are different per every state, as are the licensing requirements and exams. When moving to a new state you should acclimate yourself to what’s different in that state and smooth out your transition.

What Is License Reciprocity?

Quite a few states within the U.S. provide what is called “License reciprocity” for agents. Reciprocity means that if you hold an active license, you can then apply for another license in your new state without having to go through the hassle of additional licensing requirements as per that state’s legal demands. This means you don’t have to retake real estate courses or deal with additional fees.

Some states offer real estate license reciprocity in all 50 states, which makes things easier. If you move from a state to one that has open reciprocity, you don’t have to retake your exam courses, only apply for the portion of that state’s exam. Passing the specific portion of a state’s exam will net you that state’s license.

While some states make this process a snap, others are more of a struggle. Texas, for instance, does not offer reciprocity for your real estate license whatsoever. If you’re moving to Texas you will have to complete their entire course and terms from the ground up, regardless of your stature in another state.

When seeking to learn about state reciprocity requirements, it’s a good idea to reach out to agents already practicing within that state, such as the NELA Group in Los Angeles.

Full Reciprocity

Any state that offers what is called “Full Real Estate Reciprocity” all you to complete only the portion of the real estate exam specific to that state.

Partial Reciprocity

Partial reciprocity varies by state, and those states detail the offering in their specific agreements. For example, if your home state allows partial reciprocity, you can then transfer your license from your state to the state you’re moving to, based on the completion of their decided exam and education requirements. Many partial reciprocity arrangements are decided upon on a state-to-state basis, so what is agreed upon by, say, Washington and Oregon might be different from Florida and Georgia.

Mutual Reciprocity

Similar to partial reciprocity, mutual reciprocity allows agents from certain, specific states to transfer their already-gained experience, classes, and exams toward their target state. When this occurs, agents from both home and target states benefit from the reciprocity agreement. If you come from a state that is included in one of these mutual reciprocity agreements, you can transfer your real estate license after completing whatever their state-mandated exam and requirements might be.

Limited Reciprocity

States that offer limited reciprocity only allow residents of that state to transfer their license after completing state-mandated and specific requirements. Since these agreements are limited, they don’t go both ways and don’t involve both states. If a state has a partial reciprocity agreement but the return state has a limited agreement, there would be additional steps from the return state to practice real estate there.

Real Estate License Portability

What Is Portability?

States that offer limited reciprocity only allow residents of that state to transfer their license after completing state-mandated and specific requirements. Since these agreements are limited, they don’t go both ways and don’t involve both states. If a state has a partial reciprocity agreement but the return state has a limited agreement, there would be additional steps from the return state to practice real estate there.

Cooperative Portability: This agreement is fairly straightforward, allowing you to work cooperatively within that state. An agent licensed in a different state can conduct business in a state with cooperative portability and get their payout. For this to work, they must have a co-broker with any real estate agent who does have a license to practice in that state.

Physical Location Portability: Differing from cooperative portability, physical location law states that you may represent your client for an out-of-state sale but that you are required to do it remotely. You cannot be in the state that you want to conduct business in during the period of the transaction.

Turf Portability: States that hold reciprocity turf laws don’t let anyone holding an outside real estate license to do business in that state at all. Dealing with a state that has turf portability and no reciprocity can be a challenge.

States With Full Reciprocity:

States With Partial Or Selective Reciprocity:

The states that offer partial or selective reciprocity change often, and you will have to find out the state-to-state laws and expectations based on your home state and target state. Some of these states also allow temporary real estate licenses for military and military spouses.

States With No Reciprocity:

Some states with no reciprocity still allow concessions based on their own rules and mandates, and some allow temporary real estate licenses. States have such a wide variety of real estate laws that even states that boast no reciprocity may have additional concessions or opportunities not disclosed.

While dealing with state reciprocity requirements can be a headache, it’s a good idea to get yourself acquainted with them if you’re planning on expanding your practice or if you’re going to move from one state to another. Whether you’re practicing for yourself or looking to find a piece of real estate for a new location of children’s family dentistry, it’s a good idea to know the ins and outs of reciprocity from state to state.