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How to Get a California Real Estate License (Step-by-Step Guide)
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Applying for the California real estate exam trips people up because of the forms: the DRE application, Live Scan fingerprinting, your course certificates, and the fees all have to line up. Get one piece wrong and your approval, and your exam date, slips by weeks.
This guide walks through exactly how to submit your California real estate exam application, which form to file, what it costs, and how to avoid the mistakes that cause delays. Every fee and rule here comes from the California Department of Real Estate.
To apply for the California real estate exam, you must be at least 18, have completed three approved pre-licensing courses, and be eligible to work in the United States. The three courses, Real Estate Principles, Real Estate Practice, and one approved elective, are the proof the DRE requires that you're ready to test. You cannot apply without those course completion certificates.
One 2024 update to know: California now requires the Real Estate Practice course to include implicit-bias training and an interactive fair-housing component, according to the DRE. If your courses are older, confirm they meet the current content standards. New to the process entirely? Start with our guide on how to get a real estate license in California.
You apply online through the DRE's eLicensing system, and you choose one of two paths. Create an account at the DRE eLicensing portal, then file either the combined exam-and-license application or the exam-only application:
Most people who are confident and ready should file the combo, because it's one queue instead of two. Choose exam-only if money is tight, you're unsure you'll pass the first time, or you still need a sponsoring broker.
The salesperson combo (RE 435) costs $450 total: a $100 exam fee plus a $350 license fee, according to the DRE fee schedule. The exam-only path costs $100 now and $350 later. California residents also pay a $49 fingerprint processing fee directly to the Live Scan provider. Here's the full picture:
Brokers file the RE 436 combo, which totals $600 ($150 exam plus a $450 license fee). All DRE fees are non-refundable.
Live Scan is California's electronic fingerprinting process, and you complete it using the RE 237 Live Scan Service Request form. Live Scan transmits your fingerprints to the Department of Justice for the background check the DRE requires before licensing. Make three copies of the completed RE 237: one for the Live Scan operator, one for your records, and one to keep with your application. Do your fingerprints around the time you submit your packet so the results arrive while your application is in review.
Once the DRE approves your application, you schedule your exam date in eLicensing, and you can self-schedule as late as 6 a.m. on the morning of the exam if a seat opens up. Seats fill fast, so jump on the portal as soon as your approval email arrives. The first reschedule costs $40.
California offers the exam at five sites, according to the DRE: Sacramento, Oakland, Fresno, La Palma in Orange County, and San Diego. The exam is in person only; there is no online option. Plan to arrive 30 minutes early.
DRE approval currently takes about two to three weeks for most applications. Processing times shift with volume, so check the DRE's posted timeframes. A reliable signal that approval is close: the DRE withdraws your application fee, and the scheduling email usually follows within a week or two.
The California salesperson exam is 150 multiple-choice questions with a 3-hour time limit, and you need 70% to pass, according to the DRE. The questions span seven areas: practice of real estate and disclosures, agency and fiduciary duties, property ownership and land use, valuation and financial analysis, contracts, financing, and transfer of property. For the full format and pass-rate breakdown, see our guide to the California real estate exam.
The application has a lot of moving parts, so build a checklist: three course certificates, the right DRE form, your RE 237 Live Scan copies, and your fees. Get them lined up and you'll clear the queue once instead of restarting it.
Once your date is set, the only thing left is passing. Study with US Realty Training's California exam prep and crash course and walk in ready to pass on your first try. We also break down the study plan in our guide to passing the real estate exam.
If you need to look up a California real estate license number, the fastest way to do it is through the official DRE Public License Information tool. You can search by an agent’s legal name, company name, or license ID to verify their status, expiration date, broker affiliation, and other public license details.
California’s Department of Real Estate provides a free public license lookup tool that lets you search for a real estate licensee by name, company name, or license identification number. If your goal is to verify whether a real estate agent or broker is licensed in California, this is the official place to start.
Once you find the record, the DRE lookup can also help you verify other important details about the agent or broker.
ost people use the lookup to confirm that an agent is properly licensed, but the record can also show several other important details.
The lookup shows the agent’s license number and expiration date. This helps you confirm not only that the person is licensed, but also that the license is still current and has not lapsed.
The license status tells you whether the person can currently perform acts that require a California real estate license.
Some common status types include:
In some cases, the lookup may also show former names associated with the license record. This can be helpful if the agent previously practiced under a different legal name.
The record can also help confirm which brokerage a salesperson is affiliated with. This is useful because California salespersons must work under a licensed broker. If the person holds a broker license, this type of affiliation may appear differently.
The California DRE lookup can also help you review whether disciplinary action appears on an agent’s public license record.
On the Public License Information page, look for the “Comment” field, which usually appears near the bottom of the record. This section may include public notes related to the license, including disciplinary history.
If the agent is in good standing, you may see:
Comment: NO DISCIPLINARY ACTION
This is useful because it gives you more than just the license status. It can also help you see whether there are any public disciplinary notes attached to the license record.
If a California real estate license does not appear right away, it does not always mean the person is unlicensed. In many cases, the search was entered incorrectly or the wrong search type was used.
Common reasons include:
If you do not find the result you expected, try again using the person’s full legal name, company name, or exact license number.
Most people search for a California real estate license number to verify that an agent or broker is properly identified in the official DRE record. This can help confirm license status, match the right person to the right record, and review other public license details.
Yes. The California DRE provides a public license lookup tool that is available online for license verification. CA.gov also presents the service as a public state service for checking a real estate licensee’s status.
Yes. The DRE Public License Information page allows searches by licensee name, company name, or license identification number.
A California real estate license number is typically 8 digits. If you are unsure whether you have the correct number, use the official DRE lookup and search by the person’s legal name or company name instead.
California DRE provides public pathways for checking disciplinary actions related to licensees and individuals for violations of real estate law.
Before you can get a real estate license, almost every state requires you to finish an accredited pre-licensing program, and that raises a fair question: what do you learn in real estate school? The short version is that you learn how real estate works and how to do the job legally and ethically.
This guide breaks down the subjects you'll study, how the courses are structured, how many hours it takes, whether it's hard, and how it all maps to the licensing exam.
In real estate school you learn the principles, practices, laws, math, and ethics you need to pass the licensing exam and work as an agent. Real estate school, or a pre-licensing program, is the state-approved coursework you must complete before you're eligible to take the licensing exam. The exact course names vary by state, but the core subjects are the same nearly everywhere:
Real estate school is built around a few required courses set by your state's licensing agency, plus an elective in some states. In California, for example, the Department of Real Estate requires three college-level courses for a salesperson license: Real Estate Principles, Real Estate Practice, and one approved elective such as Real Estate Finance, according to the California DRE. Becoming a broker in California takes eight courses total.
If you have to choose an elective, real estate finance is a smart pick. Money is the center of almost every transaction, so understanding financing helps you speak your client's language from day one.
Real estate pre-licensing runs from about 60 to 180 hours depending on your state. Each state's licensing agency sets its own requirement, so check yours before you enroll. Here's how a few states compare:
The hours sound like a lot, but they're spread across self-paced or scheduled coursework, and most students finish in a few weeks to a few months. For the full licensing path in California, see our guide on how to get a real estate license in California.
Real estate school is not hard for most people, but it covers a lot of material and rewards steady studying over cramming. The concepts aren't complicated on their own. The challenge is volume: there's a lot of vocabulary, a handful of math formulas, and state-specific law to absorb.
The students who breeze through do three things. They keep a consistent study schedule instead of marathoning the night before. They focus on understanding how concepts work rather than memorizing definitions. And they take practice questions early and often. Do those, and real estate school is manageable. For test day itself, our guide to passing the real estate exam walks through the rest.
The real estate exam tests everything from your pre-licensing courses, split into a national portion and a state-specific portion. Understanding how concepts work will carry you further than memorizing them, because the questions are applied, not pure recall. According to the California Department of Real Estate, the California salesperson exam breaks down like this:
Other states weight topics differently, but the national portion of every exam covers the same core areas you studied in school.
Yes. Almost every state requires accredited pre-licensing education before you can sit for the exam. The main exception is equivalent college coursework: some states accept certain college classes in place of part of the requirement. If you've taken relevant college courses, confirm with your state licensing agency before you enroll, since it could save you time and money. We cover this in detail in our post on whether a college degree satisfies the real estate education requirement.
Real estate school teaches you the foundation of the whole job: the principles, the law, the math, and the ethics that turn a license into a career. Take your time, focus on understanding over memorizing, and the material clicks.
Ready to start? Enroll in US Realty Training's pre-licensing program and learn the material with instructors who train you for the exam and the career that follows. Not sure yet? It's a strong first step toward deciding if the work fits you, which we lay out in our pros and cons of being a real estate agent.
To become a licensed real estate agent in California, you can expect to pay, on average, between $635 and $1,210. That includes exam and licensing fees and the cost of enrollment in state-approved mandatory pre-licensing courses.
Obtaining your real estate license is just the first step in launching a real estate career in California. You’ll need to spend more money and time to maintain your license and gain membership to professional organizations that will aid in your success.
Still, it’s a small price to pay when you consider how lucrative a career in California real estate can be.
This article will break down the costs of obtaining your California real estate license and maintaining it, as well as review the cost of remaining competitive in today’s market.
To obtain a California real estate license, you will need to complete the following steps:
These steps will determine the final cost of obtaining your real estate license. Some of the costs remain fixed, like the exam and licensing fees, while others, like pre-licensing tuition, will vary.
California requires the completion of three college-level real estate courses to qualify for a real estate salesperson examination.
These include courses on Real Estate Principles, Real Estate Practice, and another subject of your choice from an approved list, for a total of 135 hours of coursework. The cost of tuition for a pre license education varies, depending on the provider, and can range from $125 to $700.
As of August, 2024, the California Department of Real Estate (DRE) exam fee of $100.
The live scan is a background check that uses your fingerprint to perform a California criminal and Federal criminal history. You can expect to pay a $49-79 fee directly to the live scan service provider.
As of August, 2024, the DRE’s real estate licensing fee is $350.
In California, real estate agents must renew their license every 4-years and participate in 45-hours of continuing education courses before they can apply for a renewal.
Continuing education consists of 45-hours of DRE-approved courses. These include an 8-hour course covering Ethics, Agency, Fair Housing, Trust Fund Handling, Risk Management, and Management and Supervision.
Real estate agents may also choose to take classes on those subjects separately; 18-hours of courses on consumer protection; and the remaining hours on approved courses related to consumer service or protection. The cost of these courses is relatively low, with packages offered for around $60
The DRE’s real estate licensing renewal fee is $350. But, you only need to renew your license every four years.
As we mentioned earlier, there are other fees that you will likely need to pay if you want to have a successful career in California’s real estate industry.
While none of these fees are required, you will find that, to stay competitive, they may be well worth the cost.
In California, licensed real estate agents must work for licensed brokers.
Brokers will charge a fee to the real estate agent each time that agent makes a commission from a sale. The commission splits between new agents and their broker is usually 50/50. More seasoned agents can strike a deal of a 70/30 or an 80/20 commission split.
Some brokerages charge monthly desk fees or transaction fees in addition to commission splits. This depends on the brokerage model. These fees are particularly prevalent in 100% commission brokerages, where agents keep the full commission from their sales but pay a flat monthly fee to the brokerage to cover operational costs. You may also encounter fees for training, technology, or marketing support.
The Multiple Listing Service (MLS) is the most recognized and widely used database for real estate listings. For agents, MLS is crucial to success in real estate.
Real estate agents can post to the local MLS as members of a local Realtors® association and local MLS. Fees vary by association and MLS database but typically cost between $20 and $50 a month.
C.A.R. is the state-level REALTOR® body. To join, you must affiliate with a broker who is already a REALTOR®. The 2025 state dues are $237. These dues are billed together with:
Local-association dues and one-time new-member processing fees vary by board and are added to the total.
NAR supports its nationwide membership through advocacy, professional standards enforcement, and discounts on continuing education. For 2025, mandatory national dues are set at $156, plus the $45 Consumer Advertising Campaign assessment mentioned previously. Membership is automatic when you join your local or state REALTOR® association, so no additional application is needed.
The average salary for a real estate agent in California is $109,443 per year. Still, the possibilities are endless for making money in the California real estate market.
Real estate agents receive a commission based on the property's sale price. The commission ranges anywhere from 1%-6% of the sale price in California. However, other factors affect the final commission amount, including the broker split and the split between the listing and buying agent.
Still, a successful California real estate agent can far exceed the state's median salary in no time.
There are a lot of varying costs associated with obtaining and maintaining a California real estate license and jump-starting your real estate career. It is a small price to pay when you consider the earning potential that awaits you as a licensed California real estate agent.
It doesn't take long to recoup the money you spent upfront, and when the money starts rolling in from your first few sales, you will be happy you took the leap and obtained your California real estate license.
Becoming a real estate agent is usually not hard to start, but it can be hard to succeed.
The licensing process is straightforward: complete your state’s pre-licensing education, pass the exam, apply, and join a brokerage. The harder parts are staying consistent, learning contracts, passing the exam, and generating clients once you are licensed. Most people can complete the process in a few months, though exact timing depends on the state.
Do people find it hard to become a real estate agent? That depends on the person. Some find it very easy. Others will struggle with the licensing process because it requires mandatory education.
Compared to other careers, becoming a real estate agent is less work. The following 5 steps are required to be a real estate agent, all of which can be completed within 6-months:
Since there are few steps and a short timeline, getting into real estate has a low barrier of entry.
A real estate education will be challenging, especially if you don’t have prior experience. The courses you take in a real estate school are college-level, so there is a degree of difficulty, particularly for some students. Because everyone is different, everyone will have different experiences.
The required number of hours varies by state. Typically, students are expected to complete between 40 and 180 hours of pre-licensing education. Some states also require additional coursework after you get your license. Check your state’s requirements to find the exact number of hours.
The quickest way to complete your education is through an online program, which allows you to study on your own schedule.
In California, in addition to the required topics of real estate principles (45 hours) and practice (45 hours), students can choose an approved elective. These electives offer a range of real estate topics, including property management, finance, economics, appraisal, business law, general accounting, escrow, real estate law, office administration, real estate computer applications and software, common interest development, and mortgage brokering and lending.
How hard is the real estate exam? If you can grasp the college-level courses in real estate school and use the available study materials, you should successfully complete the real estate salespersons exam. But, without studying or understanding the concepts, it can be hard.
For fiscal-year 2023-24, the California Department of Real Estate (DRE) reports a 64 percent first-time pass rate for salesperson candidates; repeat takers passed only 19.6 percent of the time. Averaged over the last four fiscal years (2020-21 to 2023-24), the first-time pass rate is 63.1 percent for salespersons and 39.6 percent for brokers.
There are several reasons why the exam is so difficult:
We provide exam prep and crash courses to make studying for the exam and passing easy.
Although the exact format varies by state, you can usually expect a salesperson licensing exam to last about two to three hours and contain roughly 110-140 multiple-choice questions (an 80-question national section plus 30-55 state questions is typical).
California is the standout exception: the salesperson exam is 3 hours with 150 questions, while the broker exam runs 4 hours with 200 questions. To pass in California you must score 70 % or better on the salesperson test and 75 % on the broker test; most other states set the cut-score at 70 %.
How hard is it to be a real-estate agent? If, like me, you’ve binged Selling Sunset, Selling the OC, Owning Manhattan—or any of the countless real-estate reality shows—you probably have a skewed idea of the grind. Let me explain.
Those series spotlight flashy luxury and commercial brokers handling A-list clients. They make up a very… very small slice of the industry. Reaching their level isn’t impossible, but it’s uncommon.
In the real world, the median REALTOR® grossed about $55,800 in 2023; more than six in ten newcomers earned under $10k, while seasoned pros (16+ years) landed around $92 k, and the Bureau of Labor Statistics pegs the typical sales-agent wage at $56,320. Most agents, then, pull in the mid-$50k range—only a fraction break into reliable six-figure territory.
Some agents think that just because they have a real estate license, clients will flock to them. That’s not the case. Finding clients involves selling yourself to people every day.
Richard Schulman, top-producing agent and team leader of a top .1% sales team, says, “You have to sit and prospect [2-5] years at a high level to build a pipeline for people to call you to do deals.” This means that new agents must always search for and contact new leads.
Most people find it really hard to consistently make these call day-in-day-out. That’s why they leave in the first few years. Some agents are risk adverse and will choose not to sell themselves out of fear of failure.
This is equal parts the hardest part and the part that takes the most of a new agents time.
There are many steps to the real estate transaction process. Buyer’s agents help their client find homes, tour homes, qualify for loans, make offers, negotiate prices, negotiate repairs, coordinate with escrow, coordinate with third parties, negotiate some more, finalize contracts, and record the transaction.
They do all of this within 30 days while managing their other duties. For listing agents, they must perform listing presentations, create marketing plans, find buyers, negotiate offers amounts, coordinate with third parties, record the deal, and make sure everyone is paid out.
When agents are performing all of these duties while balancing lead generating, attending seminars and workshops, paperwork, and other admin responsibilities, the job can be hard.
If agents aren’t representing clients, they could be experience a dry spell and hard times finding new clients. Then the job becomes hard in a different way.
Overall, the job of a real estate agent is simple yet difficult. It’s fast paced and requires attention to detail and proper communication.
First 6-months is a big adjustment for new agents. During this time, they get used to what the job demands in order to do it well.
Here are a few pitfalls and traps agents fall into:
New agents will enter the industry and plan on making high 6-figures in their first year. They may want to make hundreds of calls and immediately find people ready to hire them.
This makes it hard to be a real estate agent, because it is unrealistic goal setting. The secret to setting good goals is to take inventory of where we are in our career and skillset.
A good goal is made in relation to where we currently are, not in relation to where we want to be. To first make hundreds of thousands of dollars, we must first close one deal.
To close one deal, we must first find one client. This is how we create realistic goals that don’t burn us out.
Real estate agents will find it hard to schedule their days at first. They may not know what they need to do at the start of their career.
Should they lead generate for four hours or six hours? Should they attend workshops multiple times a week or once? Should they make time to build their website?
What’s great about being a real estate agent is ownership over one’s own schedule. But what’s hard about being a real estate agent is dictating what goes on it.
An agent should analyze the steps they need to take to reach their goal and schedule out their weeks and months to get them there.
As I mentioned, agents have a lot of ownership in their work. Therefore, they must be accountable. They are their own boss. If nobody tells them they need to do the work to get paid, who will?
This is a hard part about being a real estate agent. When agents hold themselves accountable for committing to work or mistakes they’ve made, they will see the most growth.
What do we need to do to make being a real estate as easy as possible? Unfortunately, there isn’t a simple fix.
The majority of the work requires new agents to learn new skills and what systems allow them to run their business effectively.
There are a few ways new agents can expedite the learning process and become pros quick. Here’s how:
Big brand brokerages provide the most services. When agents are new to industry, this is a life saver. New agents have a network of third party services that they can recommend their clients to make their lives easier.
They don’t have to learn from trial and error from working with crummy services. From the start, new agents have a toolshed of resources to deploy when they need them most.
New agents also have a bigger pool of mentors and coaches who are willing to help them out. At the start of an agent’s career, this is the fastest way to learn the ropes.
This is a controversial position. But, new agents benefit from joining teams. When they join teams, they can learn from peers and the team leader. Some teams even share leads and contracts.
That way you can find clients and get first-hand experience working with seasoned agents. The downside is the commission split. New agents will split their commissions with their team leader as well as the brokerage.
But most will find teams well worth the split, especially for new agents without big networks.
Brokerages offer training workshops. New agents (and also old agents) benefit from joining these workshops.
They can range from being free to taking a small portion of your next commission. This is where most agents learn how to do specific, intricate tasks that they won’t learn in other places. For example, a new agent can join a training workshop about how to properly fill out a buyer’s contract.
These are immensely beneficial for everyone. That’s because you can learn how to do your job and do it really well. Your clients will love you for it!
We worked with Richard Schulman to create residential real estate agent training program. It provides lecture videos from Richard on how he become one of the top-producing agents in the entire country.
Most agents find the least amount of work in their first year. Business is slow because they are establishing themselves. Despite this, the bill still need to get paid. That’s why I advise saving money before starting this career.
This is consider the investment money into your business. I recommend saving money instead of working another job because it provides an open and clear schedule that lets you focus 100% of your working time on establishing yourself in real estate.
Part time agents who work second jobs can still make it work. However, removing the need to find alternate income removes extra stress and provides more time.
This is a social industry. Agents sell themselves to people (often strangers) and most people will turn them down. That’s just business. To be successful, agents must learn how to roll with the punches.
Agents must push themselves to meet new people all the time. This could be exhausting, but it’s part of the job even when your social battery is drained. Other times, agents could experience dry spells.
They can go long periods of time without making money. After the first few years of doing good business, the job becomes easier. But, even then, agents must adapt to the ebbs and flows of the industry.
They may need to re-learn how to run their business despite years of success, because of a new law or disruptive tech. Other times, they may find themselves starting from scratch when they move to a new city.
Knowing all of this, we come back to one principle: becoming comfortable with being uncomfortable. Adaptation is one of the most underrated qualities successful agents have.
When agents become adaptable, they become flexible and ready for any situation. When every day is unique and different, this a requirement.
A real estate license is a state government-issued certificate that allows agents and brokers the legal right to represent a buyer or seller during a real estate transaction.
State licensing ensures that the real estate agent meets specific fiduciary standards. It assures the buyer or seller to work with someone who has the minimum real estate expertise.
Although the requirements for obtaining a real estate license will vary from state to state, the general steps are as follows:
Getting a real estate license in California is easier than you think. If you want to become an agent, then don't let the licensing process top you.
Once you have obtained your real estate license, it opens the door to a unique set of career and money-making opportunities unmatched in most other industries.
Being a real estate agent offers you the chance to work with lots of different people, the opportunity to be autonomous in your career, and the satisfaction of being able to help the people that you ultimately represent.
But, the benefits of being a licensed real estate agent don’t stop there. Here are a few other ways that having a real estate license can come in handy:
There are many career opportunities throughout the real estate industry nationwide. To qualify for most real estate jobs, you must have a real estate license. Some of the most common real estate jobs that you can get with a real estate license include:
A licensed real estate agent can represent themselves when buying or selling, generally speaking. But, a proper disclosure is required, and the agent should be mindful of any conflicts of interest.
It is best to consult a real estate broker or attorney before representing yourself in a transaction and be sure that you have reviewed all of your state’s laws concerning the matter.
The Multiple Listing Service (MLS) is a private database that helps facilitate transactions between brokers.
Because it is owned and operated by a collective of Realtors®, MLS only grants access to its members due to security concerns and the operational costs of running the massive database.
Once you have obtained your real estate license and began your career, you have an opportunity to have early access to the MLS database. Access to this database will give you a chance to get early access to high-demand properties for investors before the listings go public.
In addition to the jobs that require a real estate license as a qualification, being a licensed real estate agent is a great way to stand out in the job market, regardless of the career you are pursuing.
Because states hold licensed real estate agents to a certain standard of integrity and honesty, potential employers can be confident that the person they are hiring meets this threshold.
Also, having a real estate license is a mark of expertise in the field. So, any industry that even remotely deals in real estate will be happy to have a licensed agent on their team.
Having a real estate license under your belt can be helpful if you’re looking for a job at an attorney’s office, an investment firm, certain government agencies, and in any number of industries.
Even if you don’t pursue a direct real estate career, having this credential on your resume is a plus, no matter how you look at it.
A referral commission, also known as a referral fee or a finder’s fee, is a commission given to the middleman in a real estate transaction. The referral commission varies and is usually a percentage of the property's final sale price.
Suppose you are a licensed real estate agent and work for a broker. In that case, you can receive commissions whenever you facilitate a successful relationship between a client and another agent.
Making money based on referral commissions is the perfect side hustle, especially if real estate isn't your full-time job.
While the licensing requirements for a real estate agent and a Realtor® are essentially the same. To become a Realtor®, the agent must be a member of the National Association of Realtors®.
To call yourself a Realtor®, which is a nationally recognized and respected title, you must meet the following requirements:
Real estate brokers are licensed agents who have passed a broker exam and obtained a real estate broker’s license.
The fundamental difference separating a licensed real estate agent from a licensed real estate broker is the fact that a broker is permitted to own a real estate firm or act as an independent real estate contractor.
A licensed real estate agent may only operate under the direct supervision of a licensed broker.
Choosing to pursue a career in real estate, either as a licensed real estate agent or as a licensed real estate broker, can be financially rewarding.
It can also be a challenge.
The good news is that so many unique opportunities exist in the industry for licensed professionals. Obtaining a real estate license offers the chance to become an agent, an appraiser, or even an investor. You can find your niche working exclusively with residential properties or commercial buildings.
The sky is truly the limit.
Remember that success in the real estate industry will take hard work, but the payoff can be incredible.
San Diego's real estate market remains one of the most competitive in the country, with a Redfin Compete Score™ of 83.
According to Redfin, the median home price in San Diego has reached $915,000, reflecting a steady upward trend in value over the last year.
According to Realtor.com, San Diego County continues to be a strong seller's real estate market in 2026, characterized by high demand and limited active listings.
If you've been thinking about obtaining your San Diego real estate license, there has never been a better time. To become a real estate agent here, you'll need to get your California real estate license. The process is relatively easy, affordable, and well worth the effort, especially considering the opportunity to build a lucrative career in a market where home values continue to drive significant commission potential.
There are essentially four simple steps you need to take to obtain your San Diego real estate license. In most instances, the process will take approximately 4-6 months to complete.
The steps are as follows:
Here are the steps in greater detail.
To obtain a San Diego real estate license, the State of California requires candidates to complete 135 hours of college-level coursework before they can qualify to take the state's real estate agent exam.
While there are some in-person real estate schools, most are offered online through live instructor-guided or self-guided instruction.
The DRE requires that candidates take the following courses:
Once you have completed all 135 hours of course material from a DRE-approved real estate school, you will receive a certificate of completion and a transcript of the courses taken that you can use to apply for your California real estate exam and license.
Qualified applicants can submit their real estate exam and license application online, using the DRE's eLicensing portal, mail, or fax.
You will be required to include the following:
It typically takes the DRE six weeks to process the application. Once the DRE has processed your exam application, you are allowed to take your exam at one of the state's five examination locations, including a San Diego real estate licensing exam location. For local applicants, the San Diego DRE Examination site is typically located in the Mission Valley area.
You will need a valid form of identification issued in the last five years. Due to the pandemic, all sites are currently administering the exam in electronic format.
When you take the exam in electronic format, you will receive your results upon completion. If you take the exam in a paper format, results will be mailed to you within five business days from your exam date.
Although it is possible to apply to take the licensing exam and apply for the licensing separately, each application can take roughly 5 to 10 days to process. So, you can save two and four weeks on the entire process by applying for both simultaneously.
According to Indeed.com, the average yearly salary of a San Diego real estate agent is $114,787.
Agents with a San Diego real estate license earn their salary based on commission from sales. Based on the current housing market and the median price of a home in San Diego ($915,000), a selling agent can expect to make approximately $9,600 per home sale, which breaks down as follows:
That means that to reach the median real estate agent salary in San Diego, an agent must sell at least ten houses in a year. But, since a significant number of homes sell at a higher price than the median average, and commission percentages will change in your favor as you gain experience, the ability to earn a bigger salary selling fewer homes is possible within the first couple of years.
According to Redfin, home prices statewide were up 14.6% this year, and the median home price in the state is $854,700, which slightly lower than the median home price in San Diego ($915,000).
Also, indeed notes that the median salary for an agent in California is $119,156, although this is slightly higher than the median salary for a San Diego real estate agent ($94,776); both are near the national average for agents across the county, which is $95,193.
As we mentioned at the beginning of this article, the current real estate market is hot right now, according to Redfin, which also notes the following key facts about the San Diego real estate market:
That makes for an incredible seller's market and is good news for San Diego real estate agents.
The real estate market in San Diego should remain active as the demand for housing continues. While we may not see a sharp rise in home prices, dramatic decreases are not anticipated. Even if there is an increase in availability due to additional foreclosures, the current demand should balance it out.
But, nothing is a guarantee. Hyperinflation or recession could negatively affect the market. Prices could also increase so dramatically that buyers get cold feet. On the other hand, if San Diego experiences a significant surplus due to foreclosures, a flood in the market may cause a sharp price drop.
So many variables are at play, and so much is unforeseen, but now remains the best time to become a San Diego real estate agent.
According to the Bureau of Labor Statistics, overall employment for sales agents in California will grow by 4% in the next decade. Although that growth rate is considered slow across all occupations, the agency expects 47,500 job openings a year for both sales agents and brokers.
Based on those statistics and the median salary for San Diego and California real estate agents, coupled with the low cost of obtaining and maintaining a real estate license, getting a license may be worth it. But, it would help if you still weighed the pros and cons.
Only you can decide if obtaining a California real estate license and breaking into the San Diego market is right for you.
There are many clear advantages to having a California real estate license which can bring incredible earning potential if you work at it. Based on the current market trends and future forecasts, there has never been a better time to break into the market and take advantage of all the benefits of being a licensed real estate agent.
If the thought of spending hundreds of thousands of dollars on the purchase of "virtual land" sounds absurd, well…
Okay, it does sound a little ridiculous. Still, when you consider the fact that there has been growing interest in cryptocurrency investments and NFTs (non-fungible tokens), it's not surprising that investors have gotten on board the virtual real estate train.
Recently, significant virtual real estate investments have been made inside the metaverse.
For example, one individual paid $450,000 to own a plot in Snoopverse, a virtual world developed by Snopp Dogg in conjunction with The Sandbox, a virtual metaverse where users build, own, and monetize their own gaming experiences using the Ethereum blockchain.
Meanwhile, Metaverse Group, the first real estate firm focused exclusively on the metaverse economy, bought a plot of land in the Decentraland virtual platform for a whopping $2.43 million.
The metaverse refers to a growing collection of platforms giving users real-time interaction capabilities. A metaverse has its own economy that allows users to buy, sell, and trade objects or mine crypto coins.
There is incredible value in virtual land for those serious about sandboxing, especially when it is in short supply.
Most popular platforms are known as "sandbox worlds," which allows users to build whatever they can dream of within the program's constraints. One such constraint, and the driver behind the value of virtual land, is that limited land is made available for purchase.
While the platforms in the metaverse might look a lot like just another game, and they can certainly offer hours of gameplay, there is no limit to what you might do in these virtual worlds.
Some people simply log on and socialize or attend special events, such as parties or concerts.
If you want to purchase metaverse real estate, you're going to have to join one of the popular metaverse platforms. These platforms include Axie Infinity, Decentraland, and The Sandbox, to name a few. You'll also need to ensure that you have a very fat digital wallet.
Cold hard cash can be converted to cryptocurrencies, such as Ethereum or whatever native currency is associated with your preferred metaverse. You can then store the cryptocurrency in a digital wallet.
Using the metaverse ecosystem, you can rent, buy, sell and flip properties in the digital world.
Messing around in the metaverse is one thing, but becoming an investor in virtual real estate is quite different. While history has demonstrated that virtual real estate has the potential to gain significant value in time, there's an equal chance that the metaverse platform you choose could go bust.
As an investment, metaverse real estate is extraordinarily speculative. Investors need to believe that the platform will exist long enough to yield a profit. While that is possible, the concept remains shaky, so much so that even its members have trouble defining themselves uniformly.
Knowing which metaverses will succeed or fail is anyone's guess, and it is impossible to tell if the hype around virtual real estate is driving the prices instead of long-term interest.
Digital real estate and the metaverse as a whole operates, for the most part, free from government regulation. However, don't expect the metaverse to be the wild west forever.
As cryptocurrencies and metaverses grow stronger and step on the toes of world governments, you can expect governments to exert more influence. For now, most legal issues connected to the metaverse involve intellectual property disputes, which aren't unique to the metaverse.
If you are already a real estate agent or interested in becoming one, perhaps you can become an agent specializing in metaverse real estate. It's certainly not unheard of. For example, Tal and Oren Alexander, two of Douglas Elliman's top brokers, now sell real estate in the metaverse.
To advertise a digital property, many agents use Facebook Ads and other types of sponsored content to reach prospective buyers.
Currently, those selling property in the metaverse are not required to have a real estate license, but taking some online real estate courses may not be such a bad idea.
If you have money to burn and love dealing with risky investments, buying and selling virtual property in the metaverse is right for you.
However, you should proceed with caution because investing in virtual real estate is nothing like investing in real estate here in the real world.
Unlike real estate in the real world, folks in the metaverse don't need a virtual property for survival. They don't require a roof over their family's heads or a place to raise livestock or build a business.
Virtual real estate isn't necessarily the way it is here on Earth, and that has to count for something.
In today’s competitive real estate market, who you work with matters—especially when you’re buying or selling your own property. But what if you don’t want to hire another agent and instead want to represent yourself in a real estate transaction?
While self-representation is often legally allowed, getting a real estate license just to buy or sell your own property comes with important rules, responsibilities, and risks. Before you move forward, here’s what every agent—or aspiring agent—should understand.
Yes. A licensed real estate agent can legally represent themselves when buying or selling their own property.
That said, self-representation comes with specific requirements. First, you must clearly disclose—in writing and upfront—that you are a licensed real estate professional acting on your own behalf. This disclosure is required in nearly every state and applies whether you are the buyer or the seller.
It’s also important to understand that simply holding a real estate license is not enough. In most states, agents must be actively affiliated with a licensed brokerage in order to conduct a transaction, even when representing themselves. That means securing a sponsoring broker, hanging your license with that brokerage, and following its policies and procedures. In exchange, the brokerage typically receives a portion of any commission earned.
Finally, state laws vary. Many states impose stricter disclosure standards and higher scrutiny when agents buy or sell their own property. Before proceeding, make sure you fully understand your state’s requirements to avoid compliance issues, disputes, or disciplinary action.
Just because it’s legal doesn’t mean it’s always the best move.
Just because a real estate agent can represent themselves doesn’t always mean they should. Whether self-representation is a smart move depends on the complexity of the transaction and the agent’s ability to remain objective.
Representing yourself may make sense if:
It may be a poor choice if:
In many cases, agents choose to involve another licensee to maintain objectivity, reduce risk, and create a buffer between themselves and the transaction. While self-representation can offer flexibility and potential savings, it also increases responsibility—and the margin for error.
Before weighing the financial upside of representing yourself, it’s important to understand the industry reset that followed the National Association of REALTORS® settlement on August 17, 2024. These changes now shape every self-represented transaction.
Four key rule changes now apply:
Because the MLS no longer guarantees compensation, self-represented agents must decide early whether to request a seller credit, adjust the offer price, or forgo commission entirely. Proper documentation is now just as critical as the purchase agreement itself.
Despite the added responsibility, many agents still choose to represent themselves for practical reasons.
Before 2024, total commissions commonly ranged from 5–6%. As of April 2025, national averages hover around 5.44%, with California closer to 5.18%. Post-settlement, buyer-agent compensation is fully negotiable and often falls between 0% and 2.5%—or is eliminated entirely.
Self-representation allows agents to manage communication, scheduling, negotiations, and paperwork directly. With today’s compliance-heavy process, some experienced agents prefer to stay hands-on to ensure nothing is delayed or overlooked.
Verify that your license is active and that you are properly affiliated with a brokerage, which is typically required to access the MLS and hold trust funds.
Post-settlement rules require a written agreement outlining services and compensation before any showings or marketing activity.
Create a written disclosure stating that you are both the property owner (or buyer) and a licensed real estate agent. Use this language consistently across contracts, emails, MLS remarks, and marketing materials.
Determine whether compensation will be waived, credited by the seller, paid by the buyer, or reflected in the price.
Run a Comparative Market Analysis (CMA) and review recent comparable sales. Pricing errors are the most common and costly self-representation mistakes.
Choose your escrow or closing attorney, title officer, inspector, and (optionally) a transaction coordinator before going live.
Retain all agreements, disclosures, offers, communications, and settlement documents for at least the minimum period required by your state.
Getting licensed solely to handle your own transaction can make sense—but only in the right circumstances. Beyond commission savings, a license can help you build a network and potentially open the door to a new career.
However, maintaining an active license comes with ongoing costs, including brokerage fees, renewals, and continuing education. If you’re unlikely to generate regular commission income, the license may cost more than it saves. Before committing, consider whether this is a one-time need or a longer-term professional path.
Representing yourself in a real estate transaction can be rewarding and cost-effective when done correctly. But it requires preparation, experience, and a clear understanding of post-2024 rules.
If you’re considering getting licensed—or already are—take the time to understand the legal requirements, compliance risks, and practical realities. With the right mindset and structure, self-representation can be a powerful way to leverage your skills and take control of your own transaction.
The real estate exam throws hundreds of terms at you. Real estate acronyms shrink the hardest ones into a handful of words you can recall under pressure.
This guide covers the six memory acronyms every exam prep course teaches, the acreage trick, and 20 common real estate abbreviations you'll see on the real estate exam and in everyday practice. Learn these and you'll bank easy points on test day.
Acronyms work because they compress five or six related concepts into one word your brain can store and retrieve fast. A real estate acronym is a memory device where each letter stands for one part of a concept tested on the licensing exam.
You don't get extra points for memorizing the acronym itself. You get points because, when a question asks which duty an agent owes a client, OLD CAR hands you all six options in two seconds. That speed matters on a timed exam.
Here are the six memory acronyms to learn first.
UPTEE stands for Use, Possess, Transfer, Encumber, and Enjoy, the five rights in the bundle of rights that come with property ownership.
The bundle of rights is the set of legal privileges a buyer receives when title transfers.
DUST stands for Demand, Utility, Scarcity, and Transferability, the four characteristics a property must have to hold value.
Appraisers and lenders lean on these four characteristics because a lender wants to know what a property is worth before funding the loan.
MARIA stands for Method, Adaptability, Relationship, Intention, and Agreement, the five tests that decide whether an item is a fixture.
A fixture is personal property that has become real property, so it stays with the home when it sells. Think of a chandelier or a built-in dishwasher.
PITT stands for Possession, Interest, Time, and Title, the four unities required to create a joint tenancy.
Joint tenancy is a form of co-ownership where two or more people hold equal shares with the right of survivorship.
Break any one unity and the joint tenancy fails. That's a favorite exam trick.
OLD CAR stands for Obedience, Loyalty, Disclosure, Confidentiality, Accountability, and Reasonable care, the six fiduciary duties an agent owes a client.
Fiduciary duties are the legal and ethical obligations an agent owes the person they represent. In practice that means following lawful instructions, putting the client's interests first, disclosing material facts, keeping confidences, accounting for funds, and acting with the skill of a competent professional.
Expect several questions on this one. Agency duties are one of the most tested topics on every state exam.
PETE stands for Police power, Eminent domain, Taxation, and Escheat, the four powers government holds over private property.
An acre is 43,560 square feet, and the easiest way to remember it is the phrase "4 old ladies driving 35 mph in a 60 mph zone."
It's corny. That's why it works. Math and measurement questions reward exact recall, and this number appears on nearly every state exam.
These 20 abbreviations appear across exam questions, contracts, and daily practice: APR, MLS, LTV, FSBO, ARM, PITI, HUD, REO, CMA, FHA, HELOC, PMI, EMD, HOA, COE, BPO, DTI, FRM, NAR, and ROI.
The fastest way to learn exam acronyms is spaced repetition: write each one on a flashcard, quiz yourself daily, and drill the concepts with practice exams until recall is automatic.
Three tips that work:
Six memory acronyms, one acreage trick, and 20 abbreviations. That's the full list. Drill them until they surface without effort, because exam day is the wrong time to reconstruct OLD CAR letter by letter.
Want guided practice instead of grinding alone? Our exam prep package includes unlimited practice exams, vocabulary flashcards, and an eBook study guide that covers every acronym on this list.
Real estate agents earn a living working on commission rather than working for an hourly wage or a set yearly salary. As a result, full-time real estate agents must learn to maximize their time to increase earning potential and how to best manage their commission earnings to ensure that they can survive on an income that has the potential to be irregular at best.
There is no limit on the commission real estate agent can make in any given year. However, most real estate commissions checks don’t exceed 6%-7% of a home’s selling price. Some agents make millions of dollars a year by selling luxury homes. The sale price of the property you represent will ultimately determine your commission.
As an example, consider an agent who sells their home for $1.5M. A typical commission breakdown might look like this:
So, at the end of the day, what do you do with $18,000? Here are 6 smart ways you can invest your commission check.
As a real estate agent, you know the industry like the back of your hand, and you also recognize the value of investing in real estate, especially property that you can use to create passive income.
You can potentially use your commission to make a down payment on an investment property. When you’re working with a conventional loan or an FHA loan, the percentage you have to put down on a house is only a small portion of the home’s value. This makes purchasing property more accessible.
Some agents will use their commission checks as down payments and then turn the property they buy into a rental. That way, they can make a steady stream of passive income to finance the loan and take home some cash. This is a simple way of turning your commission check into a steady stream of income.
Generating new leads and building influence around your real estate career can often mean the difference between success and failure.
You’ll need to spend money on marketing efforts, professional expenses, and other costs to ensure that that happens. Most in the industry agree that agents should commit about 10% of their commission to marketing and other related business expenses.
Smart agents will look for ways they can automate and scale their business. That way, they can focus their attention more on where they can have the most impact and earn even more commission.
Since most real estate agents are independent contractors who are not subject to tax withholding, they are generally required to pay estimated taxes to the IRS quarterly.
Generally, it is wise for real estate agents to put aside 30% of each commission check to cover taxes.
Saving a portion of each commission check to use toward quarterly tax payments is a wise decision so that you can ensure that you are not scrambling to cover your income and self-employment taxes when they are due.
Because agents work on commission and their weekly, monthly, and yearly salaries can be unpredictable, real estate agents should be careful to create a budget that will allow them to live comfortably, even in the lean months.
The nature of the real estate industry is such that you may go through a dry spell occasionally and will have to dip into your savings to cover your expenses. That’s why it is essential for anyone working on commission to put a portion of their income into a rainy-day savings fund.
Reinvesting in yourself is one of the best ways to grow personally and professionally. Although you are not required to take continuing education until it is time to renew your license, you can grow your business and take advantage of new opportunities when you enhance your knowledge and skill set through continued education.
If there’s a conference that would be a great networking opportunity, a training on cold calling, or even an online course that will teach you a new skill set, education is a vital part in growing yourself so you can grow your business.
If you have taken all of the responsible steps outlined in this article and are confident that you have enough money set aside to live securely, grow your business, and cover your expenses, perhaps you should consider letting your hair down and doing something for yourself.
As a real estate agent, you spend a lot of time looking out for the well-being of your clients, and maybe your next commission check can be used to splurge.
Whether it’s a mini-vacation, a shopping spree, or just spending the day doing something you love, focusing on your well-being every once in a while is just as important as every other activity outlined above.
Just like folks earning a steady paycheck at a traditional 9 to 5 job, there are countless ways to use your commission check once you have it in your hands and are ready to go to the bank and cash it out.
However, because of the nature of the real estate industry and the fact that commission checks are not as steady as paychecks from more traditional careers, real estate agents should think about how they can best maximize their commission checks.
With proper planning, you will be able to pay your bills, grow your business, and quickly work at a pace that will allow you to live comfortably and turn your career in real estate into a lucrative career.
If you are currently taking a real estate licensing course and are preparing for your real estate licensing exam, be aware that you will need to understand the concepts of joint tenancy and tenancy in common.
This article will explain these ownership options and other related issues in greater detail. Please be aware that, although the word "tenant" is commonly used to refer to an individual who rents property, it refers to ownership in the context of this article.
Several ways exist in which more than one individual can own a property together. The most common include joint tenancy and tenancy in common. Although both ownership options recognize the parties as joint property owners, there are several critical differences between them both.
Joint tenancy refers to a type of ownership where more than one individual enters into an ownership agreement through a property deed. The parties involved in the joint tenancy may be business associates, friends, or relatives.
Consider, as an example, a married couple who purchases a home together and chooses a joint tenancy ownership option. In this case, the property deed will name both individuals as owners or joint tenants.
Because each individual is named, they both share in any property benefits. Should they decide to rent or sell that property, they are both entitled to 50% of the profit. However, the relationship goes both ways. So, each party is equally responsible for maintenance, property taxes, mortgage payments, or any other associated fees. Should one party fail to meet its financial obligation, the other named party will be required to assume responsibility.
A joint tenancy agreement features what is known as right of survivorship. Essentially, a right of survivorship states that should one named party die, the remaining party or parties automatically assume full ownership. A right of survivorship eliminates any need for probate. It also eliminates the need to transfer the deceased party's assets to their estate.
A tenancy in common (TIC) is also an arrangement where more than one party shares property ownership. Each owner is independent and may control either equal or varying percentages of the entire property. Unlike a joint tenancy, when one of the tenants in common passes away, their share passes along to their estate, giving them a right to divest their share to the beneficiary of their choosing.
Tenants in common have equitable privileges and interests related to the property, but co-tenants may have different shares of ownership interest.
Consider, as an example, a property owned by three individuals. Doug and John may own 25% of the property each, while Greg owns 50%.
Unlike a joint tenancy agreement, individuals can enter into a TIC agreement at any given time, even years later.
Using our example, Doug and Greg could have each owned a 50% share of the property initially as tenants in common, but, at some later date, Doug could have chosen to bring John into the TIC agreement, splitting his 50% share with him. This move would have created a TIC agreement with a 25/25/50 ownership split.
Parties named in a TIC agreement may also independently borrow against or sell their share of ownership.
The state real estate licensing exam will likely ask you to list the four factors determining joint tenancy.
These four factors (which create the acronym "PITT") are as follows:
As you can see, these four factors apply only to a joint tenancy and not a tenancy in common. Therefore, to remember the difference and the four factors that determine joint tenancy, remember to use the acronym "PITT."
For an individual to terminate a joint tenancy, one of those above factors must be undone. That may be accomplished if one party conveys their joint tenancy interest to a third party, either through sale or gift. Once the joint tenancy has been terminated, a TIC forms between the third party and the remaining co-tenants. Interest may be transferred unilaterally, without any knowledge or consent from other joint tenants.
In many states (including California), a joint tenant can often sever a joint tenancy by transferring their interest (such as by sale or gift). However, the exact requirements—like whether notice, recording, or specific deed language is needed—can vary by state and by the facts of the transfer.
Tenants in common can get out of a TIC agreement by transferring their property interest to another party. A transfer may be done at any time and in several ways. Tenants in common can do so by gifting, selling, or divesting their interest through a valid will.
In most cases, a tenant in common may not transfer the property interest of another tenant in common.
The best way to remember the difference between a joint tenancy/right of survivorship and a tenancy in common is to enlist the help of the PITT acronym listed above. It is important to remember because there will be several questions on the exam where you will need to know the difference between the two.
Again, in a joint tenancy, the four possession factors of interest, time, and title must be present. In a TIC agreement, parties do not necessarily possess equal rights or equal interest, and they certainly do not have to acquire the property simultaneously or under the same title document. Therefore, PITT separates a joint tenancy from a tenancy in common.
According to Federal Reserve Bank of New York, the United States is home to a massive mortgage market, valued at $12.94 trillion in 2025.
This financial sector is divided into two separate markets. These are known as the primary mortgage and the secondary mortgage markets.
Different mortgage markets serve a particular need for homebuyers and investors who put money into the mortgage market.
This article will take a deeper dive into the primary and secondary mortgage markets, comparing and contrasting the two.
The primary mortgage market is the loan market, where homebuyers obtain their mortgage and borrow directly from lenders.
The National Association of REALTORs® has reported that nearly 74% of all home buyers financed their home purchase in July 2023–June 2024 cohort. This financing generally came from mortgages obtained through the primary market.
Homebuyers and those looking to refinance can obtain direct mortgage loans through various sources that make up the primary mortgage market, including:
The secondary market allows investors to buy into existing mortgage loans to turn a profit.
Selling a mortgage is commonplace for most banks and primary lending institutions. It is a way to regain capital and continuously offer loans to borrowers.
As a result, several organizations operate in the secondary mortgage market by purchasing existing loans from primary lenders and reselling them to mortgage investors.
They include:
Mortgage investors supply capital for the secondary market, with eligibility and underwriting standards guided by Fannie Mae and Freddie Mac Selling Guides, plus any additional lender overlays.
This constant financial flow keeps the market afloat by ensuring that lenders have enough money for borrowers and allowing more home buyers to secure loans.
When a borrower obtains a mortgage, they primarily work with a lender. First, they apply for the loan, and once approved, they receive the money needed to purchase or refinance.
Then, the borrower pays back the loan and interest until the debt is paid overtime.
If lenders were to rely exclusively on the monthly mortgage payments, they would not have enough money to offer other potential borrowers.
That’s where mortgage investors come in. Lenders sell mortgage loans to investors through the secondary market, allowing them to secure the funds necessary to issue more loans.
As borrowers pay off these mortgages, payments are distributed to private investors that bought mortgage-backed securities on the secondary market.
Various factors determine mortgage rates. Some factors are within a borrower’s control, and some are not.
Lenders will adjust their mortgage rates based on loan risk. The riskier a loan is, the higher the interest rate.
In determining risk, a lender will consider the likelihood of the buyer’s failure to repay the loan and how much the lender stands to lose should the borrower default.
There are two significant factors in this consideration, including:
Market forces ultimately set the overall mortgage rates. Rates increase and decrease daily, based on economic indicators such as inflation, unemployment rates, job growth, and the economy’s overall strength.
Mortgage rates are largely a function of bond-market pricing, especially the 10-year Treasury yield, plus a spread reflecting MBS pricing and origination costs.
Fed policy can influence rates indirectly via expectations, but it doesn’t set mortgage rates.
The way that the primary and secondary mortgage markets work together is necessary for borrowers to continue accessing the funds needed to purchase or refinance a home.
The relationship between the two markets is symbiotic.
Primary mortgage markets give borrowers access to the funds needed to purchase a home.
The secondary mortgage market replenishes those funds by allowing lenders to sell those mortgages to Ginnie Mae, Fannie Mac, Freddie Mae, and other private investors.
It’s a win-win situation for everyone involved, and it is the engine that keeps the housing market alive.
California is one of the most desirable states to buy real estate in, but owning property here also means understanding how property taxes work.
If you are searching for California property tax, the most important things to know are the base 1% tax rate under Proposition 13, what can cause your tax bill to rise, and when your payments are due.
In most cases, California property taxes are based on your property’s assessed value. The statewide base tax rate is 1%, but many property owners pay more once local voter-approved bonds and other assessments are added. Property taxes are typically paid in two installments, due November 1 and February 1, and become delinquent after December 10 and April 10.
In this guide, we’ll walk through the basics of California property taxes, including rates, due dates, how taxes are calculated, and what rules property owners should know.
Here is the quick answer most property owners are looking for:
Property taxes are taxes levied on real estate by local governments. These taxes help fund public services such as schools, roads, emergency services, and local infrastructure.
In California, property taxes are most commonly discussed in relation to Proposition 13, which limits the general property tax rate to 1% of a property’s assessed value, plus certain voter-approved local charges.
That means most people researching California property tax are really trying to understand four things: how much they will pay, how the bill is calculated, when it is due, and what can make it increase.
Property taxes in California are calculated based on the assessed value of the property.
Thanks to Proposition 13, passed in 1978, the base property tax rate is set at 1% of the assessed value at the time of purchase.
In most cases, the assessed value can only increase by up to 2% per year, unless there is a change in ownership or new construction.
However, the actual tax bill is often higher than 1% because local governments may add voter-approved debt rates and special assessments.
This is one of the most important things to understand about California property tax: the 1% rate is the starting point, not always the full amount you will pay.
For example, if you buy a home for $500,000, the base annual property tax would usually start at around $5,000.
Depending on the area, local assessments could push the total amount higher.
That is why many California homeowners effectively pay closer to around 1.1% or more, depending on the location and the charges attached to the property.
Many buyers hear that California property tax is 1% and assume that is the full bill. In reality, the 1% rule applies to the general levy under Proposition 13, but local voter-approved bonded debt and other assessments can increase the amount owed.
In some communities, additional charges may include items such as school bonds, infrastructure-related assessments, or special taxes like Mello-Roos.
That is why two homes with similar prices in different parts of California may have different total property tax bills.
Use our free calculator to find out how much taxes are paid on a property.
A property tax calculator can help you estimate your annual bill based on your home’s assessed value and approximate tax rate.
As a starting point, many buyers use the 1% base rate and then add a small buffer for local charges.
Example:
This kind of estimate is helpful when you are budgeting for homeownership in California, but your exact tax bill will depend on your property’s location and the assessments tied to it.
California property taxes are typically paid in two installments.
The first installment is due on November 1 and becomes delinquent after December 10.
The second installment is due on February 1 and becomes delinquent after April 10.
If payment is not made by the delinquency date, penalties and additional costs may apply.
For many property owners, these are the most important dates to remember:
Missing these dates can make your bill more expensive, so it is important to plan ahead.
Missing a California property tax deadline can get expensive quickly.
Once an installment becomes delinquent, a 10% penalty applies.
If the second installment goes delinquent, counties may also add an administrative charge.
If taxes remain unpaid after June 30, the property can become tax-defaulted, which may trigger a redemption fee plus additional penalties of 1.5% per month until the balance is paid.
Over the long term, unpaid defaulted taxes can eventually lead to a tax sale.
In short, paying by December 10 and April 10 is the best way to avoid extra costs and larger problems later on.
Under Proposition 13, your assessed value usually does not rise by more than 2% per year. However, certain events can cause a reassessment and potentially increase your tax bill more significantly.
Common reassessment triggers include:
This is why a newly purchased property may have a very different tax bill from a neighboring property that has been owned for many years.
California property taxes go toward funding many local services and public agencies.
These often include public schools, city and county governments, community colleges, and special districts.
Your specific tax bill may show how the money is distributed across the agencies in your area.
This is also one reason local charges can vary from one area to another. The agencies and bonded obligations tied to a property are not always the same in every community.
Proposition 13 is one of the most important laws affecting California property taxes.
Passed in 1978, it limits the general property tax rate to 1% of assessed value and restricts annual increases in assessed value to no more than 2% unless the property is reassessed.
This law is a major reason why long-time California property owners may pay much less in property taxes than recent buyers of similar homes.
For many readers, Proposition 13 is the key rule behind how California property tax works. If you understand the 1% base rate, the 2% assessment cap, and reassessment triggers, you understand the foundation of the system.
If you are buying property in California, do not assume the tax bill will always be exactly 1% of the purchase price. Review the property’s tax history, ask about special assessments, and budget for local add-ons.
If you already own property, make sure you know your installment deadlines and keep an eye on reassessment events that could affect your bill.
A little planning can help you avoid surprises and better understand the real cost of ownership.
California property taxes are easier to understand once you know the basic rules. If you remember the 1% base rate, the key due dates, and the fact that local charges can raise the total bill, you’ll have a much stronger handle on what to expect as a buyer or homeowner.
It’s easy to feel the excitement of your clients when they’re first-time buyers. But, it’s also important to recognize their uncertainty.
Let’s face it, the average buyer hasn’t had all of the licensing and training we’ve had.
Without that background knowledge, everything that goes into buying a home can get confusing. It’s not a simple transaction like going to a store and just buying what you like.
To avoid your client becoming overwhelmed as a first-time home buyer, you can (and should) help them understand the process.
When a client first comes to you to help them find their dream home, you should be prepared with as many questions as they likely have.
Be ready to give a basic overview of what they can expect on the journey and what a typical home search looks like. From there, they can ask any specific questions about different steps in the process.
Affordability is a huge factor in the home buying process. Helping your client with this can be as simple as having them come prepared with their financial information to calculate how expensive of a house they can afford.
After this has been determined, you can exclusively show them homes within their price range.
To take affordability a step further, you should have a conversation with the prospective buyer about the differences between pre-approval and pre-qualified loans.
Encourage them to take at least one of these extra steps before they begin house hunting to make the actual buying process easier. Not to mention, a pre-approval will give them extra peace of mind to know that they’re able to secure a specific amount in a mortgage.
After financing has been discussed and you have a budget to work with, you need to help the buyers understand what they’re looking for in a house.
An important distinction to help them understand is their wants versus their needs.
First, your client will need to let you know things like their family size, how much time they spend at home and any home-based activities that are important to them. This will help you and them determine what their just-right size home is.
Next, you’ll want to get an idea of what type of neighborhood they’re looking for.
Living in a more rural area is completely different from a cul-de-sac. Plus, it’s important to remind them that these different neighborhoods will have different property taxes to contend with.
All of this information plays a significant role in the properties you’ll choose to show them once you begin house hunting.
House hunting is supposed to be the fun part of this journey. So, keep an upbeat attitude as you search with your clients.
When taking your prospective buyers to look at houses, you should also remind them of a few key things to make the process easier:
It’s easy to see a house and immediately fall in love with it. It could be the size, location, price, aesthetic, or any other reason.
But, your client must remember that their fate is ultimately in the hands of the seller.
If the seller receives a better offer or likes another potential buyer better for some reason, then they can decide not to sell you their house.
This is why it’s important to keep your buyer’s minds open and to encourage them to not fall completely in love with every property they see.
Looking at homes is exciting for buyers. They tend to look through rose colored glasses and overlook potential issues.
Be honest with them when you see something wrong with a property, and point out things that could be changed for the better.
To avoid them having to spend a significant amount of money on repairs, you can even show them the easy home repairs they can do themselves. They’ll appreciate both your honesty and attempt at saving them money in the long run.
Remind your client to know where they have power and where they don’t.
This particularly comes into play when thinking about the current market. With the current seller’s market, your client will have less power than they would in a buyer’s market.
Still, there are circumstances where they’ll have some power even in the current market.
This is most true with a house that’s been on the market for a long time. By accepting that there may be significant repairs needed, your client can make a lowball offer to secure the house if there’s something else about it that they love.
You can even encourage your client to gain some power as they write their house offer letter to the seller.
Including personal details and their hopes for their future in the home can help them appeal to the sentimental side of the seller and potentially gain them something they want (maybe even an inspection or faster closing).
Closing will be the most confusing part of the home buying process for your client. With so many legal aspects involved, it’s easy to understand why.
Be patient with them at this stage, as their mixture of confusion with the process and excitement to move into their new home will often get the best of them.
If they show an interest, try to explain more in depth about what’s happening at this stage. Otherwise, offer a high-level overview to keep them informed.
Communication will be of the utmost importance here. Especially if things get complicated.
You should try your best to both explain and actually add in contingencies on the sale of the home. Adding in even one of the most common real estate contingencies into your client’s contract can help protect them.
You should also remind them that closing is equally dependent on the seller to complete their part of the agreement.
Knowing that you have their best interest at heart will help make them more accepting of any delays in closing.
First-time buyers are equally excited and nervous about beginning the home buying process.
As the expert, you can help to calm their anxieties and keep them from becoming overwhelmed by simplifying the process for them.
Sometimes all it takes is spending time to explain what’s happening and what they can expect. By doing that, you can all find the process to be successful in the end.
Applying for your Florida real estate exam is the most critical step in transitioning from student to real estate professional. Whether you are submitting the DBPR RE1 form online or by mail, understanding the specific sequence of fingerprints, fees, and course certifications is essential to avoid application delays.
In this guide, we break down exactly how to navigate the Florida Department of Business and Professional Regulation (DBPR) requirements, manage the $120.50 in total state fees, and coordinate with Pearson VUE to schedule your test.
Following these steps ensures your eligibility is confirmed quickly so you can focus on passing the exam on your first attempt.
You must meet the following requirements to be eligible to take the Florida Real Estate Exams:
All of these requirements are important to be eligible to take the real estate exam in Florida.
After meeting these requirements, you’re ready to put together and submit your Florida real estate exam application.
Your Florida real estate exam application should include the following:
You will have to fill in all the necessary details about yourself and your application in the form. You also have to provide necessary background information about yourself.
A live scan fingerprint is an ink plotted copy of your fingerprint. This is official government documentation that is used to identify any criminal history.
You can do it from any accredited Livescan vendors.
You can choose to have your fingerprints taken by Pearson VUE, the same company that administers the exam.
At the venue of the exam, you will be required to bring some important documents as part of your exam application.
You need two forms of identification:
After completing your real estate exam application, the next thing to do is to submit it to the Department of Business and Professional Regulation.
There are two available means through which you can submit your Florida real estate exam application.
You can complete and submit your real estate exam application via the DMPR’s online portal. All you have to do is create a new account, follow the necessary prompts and complete your application for a new license.
If you choose to submit your application by mail, you have to send your completed application, documentation, and required fees to this address:
Department of Business and Professional Regulation
2601 Blair Stone Road
Tallahassee, FL 32399-0783
When mailing your application, package documents into a large manilla envelope, which you can get at any post office. Don’t forget to use a paperclip to collate the documents!
The FDBPR has a maximum of 90 days to complete the entire review and processing of license applications.
However, for real estate license applications, it typically takes them about 10 to 30 days to review and process the application.
While you are waiting, you can take a real estate exam prep course to help you study for the big test. You can do this by taking practice exams and reviewing important concepts and terminology.
Focus on a select number of tests that reflect the style of the exam. This will help to test and help you assess your level of preparation for the examination.
The Florida real estate licensing exam is administered by Pearson VUE. Pearson VUE offers several testing centers where you can schedule your date and time to take the exam.
You can schedule a date and time for your test on the Pearson VUE website or via 888-204-6289 once the FDBPR approves your application.
Pearson VUE also allows scheduling a remotely proctored exam. This is an online version of the exam that can be taken at home.
If you choose to take the remotely proctored online exam, there are some requirements you have to meet. You need a functioning laptop or home computer with:
Before you eventually write your exam, you will have to run a system test on your computer.
This is to check the compatibility of your computer with the software Pearson VUE uses in administering the exam.
Generally speaking, the passing rate for the Florida real estate exam is somewhere between 50% and 60%.
This implies that the test can be somewhat tough, however, regardless of this fact, you can pass the test if you study and prepare accordingly.
To pass the Florida real estate exam, you must achieve a score of at least 75%. If you do not pass on your first attempt, you may reschedule after a 24-hour waiting period. Please note that each retake requires a new $36.75 exam fee.
Keep in mind, that the second test will not be the same as the first test – no memorizing the answers!
The real estate exam requires a handful of documentation from you – some of which you might have never heard of before.
That’s why it’s important to make a checklist and to take your time collecting everything you need. By creating a list, you can make sure nothing is missing when you apply to the exam.
Applying for the Georgia real estate exam is a specific five-step process that requires you to coordinate your state-mandated education with background checks and registration through the state's testing provider, PSI. To avoid delays, you must ensure your school has certified your hours before attempting to schedule your test.
The Georgia Real Estate Commission (GREC) has set certain requirements that have to be met to take the Georgia real estate exam. To be eligible to take the exam, you:
If you have completed 10 quarter hours or six semester hours of either eligible real estate coursework or courses in principles, fundamentals, or essentials of real estate from an accredited U.S. or Canadian college, university, or law school, you will not be required to take the compulsory coursework. You just have to submit a transcript to the AMP during your application.
Once you meet these requirements, you can go to fill out and submit your exam application. There are two channels through which you can submit. These are:
You can complete and submit your real estate exam application online. To apply, log in to the portal, follow the necessary prompts, and complete your application for a new license. Once you have submitted your application, you can go on to pay for your exam with a credit card and schedule the time and location for your exam on the portal.
Applying via the online portal is only available to candidates that completed their compulsory pre-license coursework at an accredited school in Georgia.
If you did not undergo the compulsory pre-license coursework in Georgia or you are using an equivalent requirement, then you have to send in your application by mail.
If you are paying for the exam with a money order or certified check instead of a credit card, you also have to send in your application via mail.
You can find the application form in the GREC Application Handbook. Compile all your relevant documents and fees together in a manilla envelope and mail it to:
PSI,
18000 W. 105th St.,
Olathe, KS 66061-7543 USA
After sending in your application, you can schedule the time and date for your exam via telephone by calling 1 (800) 345-6559. It is advisable to do this about 7 to 10 business days after mailing your application.
To ensure the Georgia Real Estate Commission (GREC) approves your application without delay, you must provide specific documentation verifying your education and legal eligibility. In 2026, the most critical addition is the notarized proof of residency.
Your application package must include:
Pro Tip: If you are applying online, your school will upload your education credits electronically. However, you must still bring your GCIC Report and Lawful Presence Affidavit to the PSI testing center on the day of your exam to activate your license.
Once you submit your application, the GREC takes about 7 to 12 working days to approve your application. After your application has been approved, you can schedule your exam within a week depending on the volume of candidates. This puts the time between the submission of your application and your exam at 3 weeks on average.
During this period, while you wait for your application to be approved and your exam date and venue to be scheduled, you can take your time to study for the exam.
You can only take the Georgia real estate licensing exam in one of the four PSI testing centers in the State of Georgia.
These centers are located in Duluth, Savannah, Macon, and Marietta. The date and venue for your exam will be scheduled on the online portal for those who completed the 75-hour compulsory coursework in Georgia.
Others will have to call PSI at 1 (800) 345-6559 or by mailing in an application to the submission address.
At the venue of your exam, you will be required to show two valid forms of identification. Be sure to have them on you, with at least one of them being a government-issued ID.
The Georgia real estate exam is pretty tough, but it is not impossible. For the exam, you have 4 hours to answer 152 multiple-choice questions. The exam has two parts, the National and State portions. In the national portion, You must achieve a passing score of 75%. While the second portion is state-specific and you need to answer 39 out of 52 questions right.
Only around 60% of candidates pass the exam. This makes it important to utilize all of the free time you have before your exam. Prepare adequately and you are good to go.
Getting your Georgia real estate license allows you to start and build your career as a real estate agent in Georgia.
While getting your license may seem tasking, it could eventually be worth every bit of the work you put in. Once you pass, you are ready to get your license.
It is all just fun and games until someone sells a house using drone footage on TikTok.
Real estate agents can leverage technology to generate new real estate leads. This article discusses using social media, drones, apps, and email to get new leads. Let's look at how we can use tech to find new customers.
We all know that open houses have been one of the most important ways to generate new real estate leads. Instead of reinventing the wheel, we can use technology to give us an edge at doing what already works well.
One of the newest ways to leverage technology to find new leads is live streaming open house events.
We can share the live stream on social media. Potential buyers are more inclined to attend the next open house in person if they see a live stream first. When people attending open houses in-person notice the event is streaming online, they'll realize there is more competition than they initially imagined.
Live streaming is a great way to expand open houses beyond the neighborhood. While joining online isn't the same as attending in person, buyers across state lines can get a good idea of what the property looks like with people inside.
In addition, broadcasting busy open houses shows demand, something buyers and sellers both love to see.
Use drone footage to set listings apart from others. New leads like to see every property angle, and aerial footage is an attractive addition to high-quality pictures. Drone footage could save buyers a trip out to the property.
Giving new buyers as many views as possible will improve their understanding of the property. In addition, you can turn your videos into ads to improve your online engagement. We should expect our ads to perform better when enhanced with drone footage.
We can use footage like this during open houses and live streams to exhibit the property features and acreage. It also shows the distance from schools and nearby attractions like shopping and dining. Drone footage can even give examples of the weather during different seasons.
Creating video ads is essential because new generations of homebuyers respond well to video advertisements. For example, a video fly-through is engaging content for social media. Uploading interesting footage to YouTube on a regular basis will expand your outreach and bring in more leads.
Social media is a crucial way to generate new leads. It helps us share listings in different cities and states. Facebook is almost 20 years old. There have been a lot of new channels developed along the way.
Set up free accounts on Facebook, YouTube, Reddit, LinkedIn, Instagram, TikTok, and Pinterest. Remember to add some time to your calendar to do social media marketing every week.
Doing as little as one post a week is enough to notice a difference in new leads. Sometimes the most challenging part is getting started. Once we have a routine, it is easy to keep the content going.
Here are a few examples of how to use social media:
Besides posting content, we can leverage social media to network with other industry professionals. We should also ask for reviews from buyers and other professionals we've worked with in the past.
Social media is a great place to find ideas for content to emulate from other agents, especially if we get writer's block.
Curb appeal is fundamental to capturing the people viewing our listings and seeing our signs. It includes everything exterior to the house that makes them attractive to buyers. We'll want to work with sellers to suggest the most valuable upgrades.
A fresh coat of paint works wonders for curb appeal. Encourage sellers to pick colors that match the neighborhood and features found in nearby listings. Neutral colors appeal to most buyers.
A bright-colored door that contrasts nicely with the neutral exterior color can be a great way to draw attention. Doors are small enough to paint if the new owner decides they want something less noticeable.
Nowadays, there is an app for everything. Suggest a design app that helps homeowners get a clear timeline of how long the enhancement will take to complete.
Contractors sign up with the design apps to get their painting leads, making it easy for homeowners to find a trustworthy tradesperson. Apps like this make it easy to collaborate with sellers.
They can ask for input on the upgrades they should do before they sell the house.
Besides paint and a bright door, trimmed bushes and a freshly mowed lawn go a long way in the eyes of potential buyers.
Planting trees can be a great way to add value and curb appeal at the same time. Agents should encourage sellers to make strategic landscaping decisions that fit the community.
The idea is to make the outside look well-kept with professional maintenance. We can use apps to find the best landscapers in our areas.
One of the easiest ways to increase curb appeal is with the mailbox. Mailboxes are great ways to add flare to the exterior of the home. Antique mailboxes can be appealing in some neighborhoods.
In others, a natural wood post may be more attractive. If the mailbox is in front of the house, upgrading it is a great way to catch some additional attention. Recommend using an app to make finding a handyman easy for homeowners.
The ROI from email marketing is hard to beat. Newsletters are among the best ways to establish a relationship with new customers. Advertise the newsletter on social media channels and ask people to sign up.
Setup a scannable QR code to display at open houses and online. Make asking people to sign up for the newsletter a regular part of the sales pitch.
Once we have a list of email addresses, we'll have to get into the routine of sending them content. Draft a marketing schedule for the newsletter. Consider a different theme for each month.
We want to send at least one newsletter per month. Talk about new listings, market trend analysis updates, and success stories or reviews from recent customers. The newsletter is a great place to share social media accounts for people that want even more information.
Besides a newsletter with a monthly marketing plan, it is crucial to have a contact plan for buyers and sellers interested in working together. When fielding calls from new customers, remember to ask for their email addresses.
We can use various customer relationship management (CRM) platforms with automated follow-ups to make sure we're making contact after the first conversation.
We will have more emails to sort through when we ramp up our marketing with newsletters and CRMs. So take some time to organize overloaded inboxes.
Create new folders and labels that make it easy to stay organized and see who needs to follow up. Don't let new leads fall through the cracks.
We can target "For Sale By Owner" listings when looking for new homes to sell. If the listing stays on the market longer than a month, it might be an excellent opportunity to get in touch with the seller.
There are a variety of places owners sell their homes online. Zillow and Craigslist are some of the most popular online directories. Local newspaper websites can also be a valuable source of FSBO listings. We will want to create alerts for new listings and target those that don't sell right away.
Of course, we can always find FSBO listings the old-fashioned way by driving around target neighborhoods and taking pictures of for-sale signs.
But, no matter how we find them, we'll want to make sure we have our online presence on point.
Showing off a similar listing with drone footage and a recording of the last live-streamed open house could be enough to convince the sellers to use our services.
The best way to build new leads is to improve on what already works. Technology has opened the door to do our jobs better in a variety of ways.
Taking advantage of free social networking channels may be the most effective way to leverage technology to build new leads.
Whether you decide to live stream an open house, use drone videos, or record regular market updates for YouTube, the sky's the limit for reaching new leads. The best part is that using technology to build new leads is easy to learn and only costs you in time.
San Francisco home prices run well into seven figures, which means one closed deal can pay what some jobs pay in months. Getting licensed to earn those commissions takes about five months and a clear set of steps.
This guide walks you through how to become a real estate agent in San Francisco: the required courses, the exam, the costs, the timeline, and an honest look at what agents here earn.
You become a real estate agent in San Francisco in five steps: enroll in a DRE-approved school, complete 135 hours of coursework, apply for the state exam, pass it, and sign with a brokerage. There is no separate San Francisco license. California issues one statewide license, so these steps work anywhere in the state.
You qualify to start as long as you're at least 18 years old and eligible to work in the U.S. Here's each step in detail.
California requires you to complete pre-licensing coursework from a school approved by the Department of Real Estate (DRE) before you can sit for the exam. Our San Francisco real estate school offers the full program with in-person, live online, and self-paced options.
The school you choose also issues the course certificates you'll need for your exam application, so verify DRE approval before paying anyone.
The DRE requires 135 hours of education split across three 45-hour courses:
You have one year from enrollment to finish, and DRE pacing rules set the floor: no single course in under 18 days and no more than two courses in any five-week period.
Once your three certificates are in hand, apply for the DRE salesperson exam through the DRE's eLicensing system. You'll need:
Live Scan is California's electronic fingerprinting process, used to run the criminal background check required of every applicant. If you have a criminal history, contact the DRE directly before applying. Many applicants with records are still eligible, and it's better to know up front.
The California salesperson exam has 150 multiple-choice questions, and you need 70% to pass. Once the DRE approves your application, you can self-schedule your exam date and location.
The exam is the step that stops most people, so don't treat it lightly. Study with practice exams until you're scoring above 80% consistently before you book your date.
Your license isn't active until a California-licensed broker holds it. Until then, you can't legally represent clients.
Finding a brokerage is the easiest step. Reach out to offices you'd want to work in, tell them you're newly licensed, and interview a few before you commit. In a market like San Francisco, pick the one offering the best training and mentorship, not the best splits. Your first-year priority is learning to close, and a slightly better commission split on zero deals is still zero.
According to Indeed, the average real estate agent in San Francisco earns about $104,000 a year. Treat that number carefully: agents earn commission, not salary, and the average is pulled up by a small number of top producers. Many first-year agents earn far less while they build a client base.
The math is what makes San Francisco attractive. The median home price in major areas of the city runs around $1.5 million. At a typical 3% commission rate, one sale generates about $45,000 in gross commission before your brokerage split. That's why San Francisco agents can earn a real living on fewer deals than agents in cheaper markets, and why competition for those deals is fierce.
Most people become licensed in 4 to 6 months. The 135 hours of coursework takes at least 7.5 weeks under DRE pacing rules, though most students spread it over two to three months. After you apply, DRE processing takes roughly three to four weeks, and then you can self-schedule your exam.
The variable you control is the coursework. Students who set a weekly schedule and stick to it finish months ahead of students who study when they feel like it.
San Francisco is one of the most competitive markets in the country for agents, with thousands of licensees competing for high-commission listings. The money attracts the crowd.
Standing out comes down to your network. New agents who win in this market lean on their sphere — friends, family, former coworkers, neighborhood ties — and pick brokerages that feed them leads and mentorship while that sphere grows. If you're weighing whether the career suits you at all, read our honest take on the pros and cons of becoming a real estate agent before you enroll.
Becoming an agent in San Francisco is worth it if you can fund yourself through a slow first year, because the per-deal payoff here is among the highest in the country. One $1.5 million sale pays more than a dozen sales in many U.S. markets.
The trade-offs are real: commission income is irregular, the market is crowded, and your first deal may take months. But the licensing investment is small — roughly $450 to $800 in required costs and about five months — against a career where a single transaction can return that investment 50 times over.
The path is the same for everyone: school, 135 hours, exam, brokerage. The difference is how long you take and how prepared you walk into the exam room. Our step-by-step California licensing guide covers every form and fee in detail.
Ready to start step one? Try the program before you spend a dollar.
Getting a real estate license in Los Angeles takes five steps: finish 135 hours of DRE-approved courses, apply for the exam, pass it, and sign with a brokerage. Most people finish in 3 to 5 months and spend about $500 in state fees plus tuition.
This guide walks through each step with the current numbers, where LA candidates take the exam, what agents here earn, and whether the market is worth entering. All licensing facts below come from the California Department of Real Estate.
A real estate license is the state-issued credential that lets you legally represent buyers and sellers in a transaction.
To become a real estate agent in Los Angeles, you complete 135 hours of approved coursework, apply to the DRE, pass the salesperson exam, and join a brokerage. There's no LA-specific license, you're earning a California license and using it in LA. Here's each step.
California requires 135 hours of pre-licensing education from a DRE-approved provider before you can sit for the exam. Online, livestream, and in-person formats all count. The full list of approved schools lives on the DRE website, and our Los Angeles real estate school runs courses built for LA students.
The 135 hours break into three 45-hour courses:
Each course ends with a final exam. Pass all three and you get the completion certificates the DRE application requires.
Submit your application to the DRE with your course certificates, a completed Live Scan fingerprint form, and the fees. The smart move is the combined exam and license application (form RE 435), which the DRE prices at $450 total: $100 for the exam and $350 for the license. California residents pay a $49 fingerprint processing fee separately to the Live Scan provider.
Processing takes a few weeks. Check the DRE's current processing times page before you plan your exam date.
The exam is 150 multiple-choice questions in 3 hours, and you need 70% (105 correct) to pass, per the California DRE. All exams are electronic. LA-area candidates test at the DRE's La Palma exam center in Orange County, about 20 miles southeast of downtown.
The exam covers seven content areas, including property ownership, agency, contracts, financing, and disclosures. You get your result the moment you finish. If you fail, you can re-apply to test again with no limit on attempts during your two-year application window, per the DRE.
Don't go in cold. Our guide to the California real estate exam breaks down the format, and timed practice exams are the single best predictor of passing.
A salesperson license only activates under a sponsoring broker. Interview more than one brokerage and weigh training, commission splits, and culture, not logo prestige. Our guide on how to choose a real estate brokerage covers what to ask. Once a broker sponsors you, you can represent clients and earn commissions.
Plan on 3 to 5 months from enrollment to license. California requires minimum study periods for the coursework, DRE application processing runs a few weeks, and exam scheduling depends on seat availability at La Palma. If you want to compress the timeline, our fastest way to get a real estate license guide shows where the time actually goes.
State costs total about $499: a $100 exam fee, a $350 license fee, and a $49 fingerprint processing fee, per the California DRE's current fee schedule. Add course tuition, which ranges from roughly $100 to $700 depending on the school and package.
The Live Scan provider may add a small rolling fee on top of the $49. Budget $600 to $1,200 all-in.
According to the U.S. Bureau of Labor Statistics (May 2023), the median annual wage for real estate sales agents in the Los Angeles–Long Beach–Anaheim metro is about $57,180, with a mean of $71,110. The top 10% of agents nationally clear $125,000+, and the bottom 10% earn under $37,000, which is where most new and part-time agents start.
LA's advantage is price: commissions scale with home values, and LA's median single-family price sits near all-time highs. The honest caveat is competition. Thousands of agents work this market, and National Association of Realtors surveys consistently show newer agents grossing under $40,000 while established producers in luxury pockets earn six and seven figures. Your first-year income depends more on your prospecting habits than on the market.
Yes, if you treat it like a business from day one. LA is one of the highest-priced, highest-volume metros in the country, which means bigger commissions per closed deal than almost anywhere else. It also means crowded open houses and experienced competition.
New agents who win here pick a neighborhood or niche, join a brokerage with real training, and prospect daily. The market rewards specialists, not generalists.
The path is the same five steps for everyone: 135 hours of courses, one application, one 3-hour exam, one brokerage. What separates licensed-in-four-months from still-thinking-about-it is starting the first course. The LA market doesn't wait, and neither do the other people reading this page.
Ready to start step 1? Enroll in the California pre-licensing course and finish your 135 hours on your schedule, with live trainers when you want them.
According to the Sacramento Association of REALTORS®, the median sale price hit $483,250 in June 2025 (-6.2 % YoY) while active inventory is up roughly 30 % versus last year.
This is a clear sign of an active real estate market! This is excellent news for people who want to become a real estate agent in Sacramento.
So, how would someone get their license and start a real estate career?
In this article, you'll learn everything you need to know to become a Sacramento real estate agent.
You are eligible to apply for and get a California real estate license to practice as an agent in Sacramento once you are at least 18 years old and can work in the U.S.
This section will cover, in detail, the step-by-step process you have to follow to get started.
One of the major requirements to become a real estate agent in Sacramento is to complete 135-hour real estate coursework. This coursework is state-specific, and you must complete it before you can take the real estate license exam.
You can only take the coursework by enrolling in one of Sacarmento real estate schools approved by the Department of Real Estate. These schools help you complete the required courses and prepare for the real estate license exam.
They also certify you upon completion and passing of the coursework. You will need this certification when applying for your license.
You can spread the compulsory 135-hour coursework out to fit your schedule. The coursework comprises 3 required courses, with each of the courses evenly split into a 45-hour duration.
You have to complete these 3 courses and take the license exam within a year of your enrollment.
You have several options to choose from for your elective course. These courses will provide you with a slightly different perspective depending on your choice. Here are some of the options available to you:
These courses are designed and formulated by the DRE to treat the fundamentals of becoming a real estate agent in California. In addition, you will learn about the relevant real estate topics and terminology that the license exam will be based on.
After completing the compulsory 135 hours of real estate coursework, you can apply to take the California Real Estate Salesperson Examination.
This exam is somewhat difficult to pass, with a pass rate of about 51%, so you have to prepare diligently.
In applying for the exam, you will have to fill out an application form and pay a fee of $100 for the exam. You will also have to submit a valid photo ID, a completed live scan form, and the certificates for your coursework.
Once your application is processed, you can go ahead to schedule the time, date, and venue of your exam. You will also have to pass a background test.
Passing the real estate exam is the most crucial step you have to take. The DRE sets 150 multiple-choice questions, and you need a score of at least 70% to pass.
The exam can be stringent and demanding, but it is not impossible. All you have to do is study diligently before the exam.
You cannot practice as a real estate agent until you sign with a brokerage in California, even after getting your license. You have to work under a broker. Finding a brokerage to sign you can be like the typical job-seeking process.
All you have to do is reach out to a brokerage that piques your interest. Let them know that you have just received your license, and they can schedule an interview with them. Once you scale this phase, you can start your career as a real estate agent in Sacramento, California.
Using websites like Realtor.com and Zillow.com, I can see around 6,800 realtors in the Sacramento area. This could include agents who serve the area, but might not live there. This is also a limited search.
Sacramento is a mid-sized city on the larger end. Close to 600,000 people live here. This means the area is dense with inventory.
Also, the amount of inventory has increased substantially in the last year. Although agents have more competition here, there's plenty of real estate to go around.
Since agents make money based on the value of the home sold, let's look at the average home value in the area. Sacramento's average home value is around $500,000. This is a rough estimate taken from Zillow, Redfin, and Realtor.
Let's assume that an agent negotiated a 1.5% commission rate. That means, they would make $7,500. With the increase in for sale homes, this can set agents up to make good money. If agents want to earn $100,000 (above the national average), they must close about 13 homes.
This number does not include commission splits with brokerages. It also doesn't account for homes higher and lower the city average value.
It should take about 5 to 6 months to become a real estate agent in Sacramento, depending on how quickly you complete your coursework. The fastest you can complete your coursework is 2 months.
You then apply for the exam and have your application processed. After taking your exam, you will have to sign with a brokerage. All of these would typically take about 3 - 4 additional months.
While the journey can be rigorous and challenging, being a real estate agent in Sacramento can be more rewarding than you think.
Other than the robust income, you can have a flexible schedule and take pleasure in helping people make the critical decision of buying their homes. This makes it entirely worth all the stress.
You might be considering a real estate career. This is a big step. With big steps, there comes questions.
As a real estate school, we get a lot of questions about becoming a real estate agent.
This article lists the most common questions we get. Use this guide to learn more about the career and see if it's the right step for you.
Yes, as a potential real estate agent, you can interview brokerages before getting your real estate license. Interviewing before you get your license helps you decide which brokerage you want to join. Not only that, but you could coordinate with the DRE to automatically sign with a brokerage when you pass the state exam.
There is no fixed time frame restricting your time at a brokerage. Instead, the time spent after signing an independent contract with a brokerage is dependent on several factors, including the terms of the contract signed and personal factors such as how fulfilled and comfortable you feel at the brokerage.
Yes, the commission split between you and the brokerage you sign up with is negotiable. However, if you are uncomfortable with the split portion, both parties can negotiate until a compromise is found.
No, joining a real estate team as a new real estate agent is not necessary. Although joining teams may come with benefits, such as establishing a familiar ground and creating exposure in the real estate industry. However, if you feel you have what it takes to go solo and meet your clients, go for it!
You can keep the leads you get from hosting another agent's open house. One of the best ways to stay busy as a new agent is by offering to do an open house for a thriving listing agent in your brokerage. Any potential future clients you get in the process are a bonus and yours to keep.
The answer to this is no. You are not obliged to use your brokerage's preferred service providers. Instead, as an autonomous contractor, you are allowed to determine what works for you and your business, including the choice of who provides your services, such as escrow officers, mortgage lenders, etc.
No, you are not required to go to your office every day. The best place for a real estate agent is outside their office to find more opportunities to meet potential new clients.
However, it is crucial to keep your ears to the ground to know when special events such as masterclass training are being held. Brokerages offer events, classes, and training to help agents improve. So, you don't want to miss out!
As an aspiring real estate agent, a mentor is not required. But, if you can afford the commission split, you may want to find one. Mentors help shorten the learning curve and guide you through problems you might not know how to fix.
Generally, having a mentor will cost you 20% of every commission check. But, this can vary depending on the contract.
Yes, you can represent yourself in purchasing or selling your property once you have passed the real estate state exam and received your license.
No, printing your license is not required. Typically, the Department of Real Estate sends you two copies of your license:
The most important thing is to save these documents for reference purposes.
Yes, you can obtain a real estate license, even with a criminal record. The first step is to contact the Department of Real Estate to inform them.
When explaining your criminal history, be honest and specific. If the DRE finds the information you hide, you will look suspicious and untrustworthy.
Criminality is a significant factor in deciding a person's eligibility because trust is a cornerstone of a real estate agent's fiducial duty.
Staying motivated throughout the process of getting a real estate license is a vital key to passing the exam. To stay motivated, you must remember your reason for embarking on the journey. Your "why" can be financial freedom, independence, or providing for people you care about.
Also, experts recommend studying small volumes. Studying small volumes makes the material less daunting and helps you learn faster.
Becoming a real estate agent is an important decision and should be treated as one. Research and ask all the necessary questions before beginning the process of obtaining your license.
Furthermore, consider this an upfront investment and prepare to make several expenses such as pre-licensing education fees, real estate exam fees, application fees, etc.
San Jose's median home sale price sits around $1.48M. That means a single commission check — on one side of one deal — can net you $37,000–$44,000. But it also means roughly 8,000–9,000 licensed agents competing for Bay Area listings.
This guide walks through exactly how to get your California real estate license, step by step. It also gives you an honest look at the San Jose market — competition, earning potential, and realistic timelines — so you can make an informed decision before you enroll.
Getting a real estate license in California requires completing 135 hours of pre-licensing education, passing the California real estate exam, and signing with a licensed brokerage. The full process takes 3–5 months from enrollment to licensed.
Ready to get started? Enroll in the California pre-licensing course and complete your 135 hours online at your own pace.
California's baseline requirements are straightforward. You must be at least 18 years old, have a valid Social Security number, and be able to pass a background check. No college degree is required.
Most people qualify without issue. If you have a criminal history, the California Department of Real Estate (DRE) evaluates cases individually — a past conviction doesn't automatically disqualify you, but review the DRE's guidelines before you invest time and money in coursework.
California requires three courses totaling 135 hours before you can sit for the exam:
For the elective, Real Estate Finance is the strongest choice. It covers material that appears heavily on the state exam — mortgages, lending, financing instruments — and it's practical knowledge you'll use with clients from day one.
All three courses can be completed online. You're not required to attend a school physically located in San Jose. US Realty Training's California pre-licensing course lets you work through the material at your own pace, which matters if you're still employed while you study.
You'll need official transcripts when you apply to the DRE, so make sure you're enrolled with a DRE-approved provider from the start.
Once your coursework is complete, you'll submit an exam application to the DRE. Here's what you need:
Per the DRE's current processing timeframes, exam applications for salesperson candidates currently take 5–7 weeks. Check that page before you submit — processing times shift. This window is one of the main reasons the full licensing timeline is 3–5 months, not 2 weeks. No school can speed up the DRE.
The California real estate salesperson exam is 150 multiple-choice questions. You have 3 hours to complete it. You need to answer 105 questions correctly — a 70% passing score.
According to the California DRE, the statewide first-time pass rate is approximately 51%. Roughly half of all test-takers fail on their first attempt. This is not an exam you can wing by skimming the coursework.
The exam covers six topic areas: property ownership, laws of agency and fiduciary duties, property valuation and appraisal, contracts, financing, and transfer of property. If you fail, you can retake it — but you'll pay the fee again and wait for a new testing date. One focused attempt beats two.
For a full breakdown of what to study and what to expect at the testing center, read our guide to the California real estate exam. Results are delivered the same day at the testing center.
You cannot practice as a real estate agent in California without hanging your license with a licensed broker. Once you pass the exam, this is your next step — and it deserves more thought than most new agents give it.
Interview multiple brokerages before you commit. In a market like San Jose, your brokerage determines how quickly you learn, what support you get, and whether you close your first deal in month 3 or month 18. Look for mentorship, training quality, and a fair commission split — in that order. A 70/30 split with no support is worth less than a 60/40 split with a seasoned mentor.
Many pre-licensing schools have brokerage connections. Ask your school for introductions. For help knowing what questions to ask, read our guide to finding the right brokerage.
The San Jose real estate market is one of the most competitive in California — and you should go in with clear eyes about what that means.
Roughly 8,000–9,000 licensed real estate agents work the Bay Area. To be precise: approximately 6,000 of those are REALTORS® — members of the National Association of REALTORS (NAR). A REALTOR® is a licensed agent who belongs to NAR and is bound by its Code of Ethics; not every licensee is a REALTOR®. The broader pool of Bay Area licensees is the competitive set you're entering.
What this means practically: you need a differentiated approach to get started. The agents winning in San Jose are the ones with a clear niche — tech employee relocation, first-time buyers, a specific set of neighborhoods — backed by strong mentorship from a brokerage that knows the local market. Hanging your license with the first brokerage that calls you back is a recipe for a slow first year.
San Jose's median home sale price was approximately $1.48M as of mid-2025 — one of the highest in the country. (Verify this figure against current Santa Clara County MLS or Zillow/Redfin data before publishing.)
Real estate agents in San Jose can earn well above the California statewide average on a per-transaction basis — but annual income depends entirely on transaction volume.
According to the U.S. Bureau of Labor Statistics, the mean annual wage for real estate sales agents in California is approximately $72,870. That figure reflects the full state, including lower-priced markets. In San Jose, a single commission on one side of a $1.48M transaction at 2.5% is $37,000 — before the brokerage split. Two deals like that in a year puts you well past the state average.
The honest reality: most new agents don't reach their full earning potential in year one. Building a client base takes time. The Bay Area's high prices create high upside, but they don't shortcut the relationship-building that real estate runs on. Treat your first 12 months as an investment in your pipeline, not a sprint to high income.
Getting your California real estate license realistically takes 3–5 months from start to finish.
Here's how the timeline breaks down:
If you see a school advertising a path to licensure "in as little as 2 weeks," they're describing the theoretical minimum study pace — not a realistic timeline. The DRE's processing window alone is 5–7 weeks. No one skips that.
For a full timeline breakdown, read our guide on how long it takes to get licensed.
Getting your California real estate license takes 3–5 months. The exam is a real challenge — about half of first-time takers don't pass. And once you're licensed, you're entering one of the most competitive markets in the country.
None of that is a reason to walk away. The Bay Area's price points create some of the highest per-transaction income potential in California. But it rewards agents who treated exam prep seriously, chose their brokerage carefully, and built a plan for year one before they ever got their license number.
Start Your California License — complete your 135 hours online at your own pace and take the first step toward working in one of California's strongest real estate markets.
Real Estate Vocabulary Quick Answer
Real estate vocabulary includes the legal, financing, appraisal, contract, and transaction terms used in real estate practice.
The most important terms to learn first include real property, personal property, fixture, lien, easement, escrow, appraisal, amortization, contingency, title, and closing disclosure.
Real property is all things attached to the surface of the land, the ground below, the air above, and all the legal rights to them. It is used to refer to things that are typically immovable. This includes the building itself and other appurtenances, such as landscaping, walkways, and other structures.
Personal property is a real estate vocabulary word that refers to any tangible and moveable objects such as gadgets, furniture, vehicles, machinery, and so on. This simply means that personal property would be any property that does not qualify as real property. Another difference between real and personal property is the mode of transfer. A deed is used to transfer real property from an owner to a buyer, while a bill of sale is used to transfer personal property.
A fixture is any item that was once personal property but has become real property by way of permanent attachment to real property. Examples of fixtures include kitchen cabinets, ceiling fans, chandeliers, and window treatments.
The bundle of rights is a term that describes a collection set of legal rights that is generally vested in an owner of real property upon purchase and receipt of a title deed. The bundle of rights consists of five rights. These rights may be held by the titleholder alone or may be shared with other parties.
The right of use allows a titleholder to use their property in any way that suits them as long as it is not illegal. This could include things like hosting guests, renting out the property, or even making changes to the property.
Keep in mind that this right can be somewhat restricted in practice by HOA regulations, and local, state, and federal laws where applicable.
The right of possession gives a titleholder the freedom and power to choose who may or may not enter their property. This right may be limited in the instances of search warrants, easements, or rental properties.
The right of transfer guarantees the right of a titleholder to dispose of a property. This means they can transfer the ownership of their property to another party by selling it, willing it, or gifting it. Exclusion to this right exists in cases of mortgages and liens.
The right of encumbrance means that the title owner has the right to take out a loan on the home. By building and using the home’s equity, they can finance development projects to raise the home’s value.
This right permits a titleholder the freedom to engage in any activities of their choice on their property and enjoy the property as they see fit, as long as the activities are not illegal.
A good way to remember the bundle of rights ahead of your exam is the acronym “UPTEE.” It stands for Use, Possession, Transfer, Encumber, and Enjoyment.
Zoning is the division of land by the local government. These laws are local regulations that dictate how the land can be used. These decisions are based on a master plan for the district and consider a variety of factors like economic development, traffic concerns, noise or light levels, and protecting local resources. There are multiple zoning classifications, but some of the most common include commercial, residential, agricultural, hospitality, or industrial. Zoning laws can impact property value and what type of building or structure can be built on a property.
Eminent domain is the power that the local, state, and federal government has to acquire private property from a person for public use. This is usually done in exchange for fair compensation from the government. For example, if the government wants to expand a highway, they may need to purchase and demolish buildings close to the highway to facilitate the widening.
The Latin phrase ad valorem means “based on value.” In terms of real estate, an ad valorem tax is a tax based on a property’s value — often in the form of a personal property tax. These taxes are generally instituted by local governments and are assessed annually by the jurisdiction. These are usually the primary source of income for municipal governments and are essential to consider when purchasing a home.
Acreage is a real estate term that refers to a large expanse of land that is yet to be divided into small lots for residential purposes. An acreage is made up of 43,560 square feet. A section is made up of 640 acres and a survey township is made up of 36 sections.
Trade fixtures outline personal property items that a tenant would install or use to operate their business in commercial real estate. For example, restaurant booths inside a restaurant would fall under trade fixtures that the tenant installed to conduct their business.
Condos, or condominiums, are individually owned units within a larger residential complex. Unlike traditional single-family homes, condo owners share ownership of common areas and amenities, such as hallways, gyms, and pools, with other residents. Condos offer a low-maintenance lifestyle, as the condominium association typically handles exterior maintenance and repairs. Owners pay monthly dues to the association for upkeep and management of shared spaces.
"As is" is a term used in real estate to indicate that a property is being sold in its current condition, with no guarantees or warranties provided by the seller regarding its quality or condition. When a property is sold "as is," the seller is not obligated to make any repairs or improvements before closing, even if issues are discovered during the inspection process.
An easement refers to the legal right of a person to access and use another person’s real property for a specific purpose. For example, utility companies hold easements that permit them to access power cables on a property. Here are a few terms that you should know to help you understand how easements work:
The servient tenement in an easement arrangement refers to the property that bears the burden of an easement.
A dominant tenement, on the other hand, is the property that benefits from the easement on another property.
Ingress, in easements, refers to the right of a person to enter a property while egress is the right to leave the property. In easements, these rights come to play when a property is landlocked. It invokes an easement by necessity so that a person can access their property even if it means crossing another person’s property.
A lien is a legal right to possess another person's property until their debt has been paid. Usually established by a creditor or legal judgment, a lien is meant to satisfy your obligation to pay off a debt or loan by using the property as collateral. There are many different types of liens, but general and specific are some of the more common types in real estate. In a general lien, all your property - including your house and additional personal property - can be seized to pay off a debt. However, a specific lien is used only to seize one specific property applicable to the debt - like a house. This does not cover all the personal property or items a debtor may own.
Created by Thomas Jefferson in the early days of our nation, a mechanic's lien is a legal document that ensures a supplier's or worker's right to enact a lien to ensure payment. A mechanic's lien can be used by subcontractors or builders who have done work on a property and are seeking the appropriate payment. A property with a mechanic's lien cannot be sold and must be settled before putting a house on the market.
A voluntary lien is placed on property with the consent of the individual receiving the lien. For example, a mortgage is a voluntary lien because the buyer consents to the lien through the bank. Or, if you wanted to get a secondary loan or a car loan, these are all voluntary liens because the buyer asked for the responsibility that comes with the loan.This differs from an involuntary lien, which someone else imposes, like a tax lien or a mechanics lien.
Clouds on title are any unresolved issues or disputes that cast doubt on the ownership of a property. These issues can include errors in public records, undisclosed liens, unpaid taxes, or legal claims. Clouds on title can prevent the transfer of property until they are cleared, as they create uncertainty about who legally owns the property.
If a property owner dies and there are no identified heirs or successors, a property can be reverted to the state upon an owner’s death. The state will be required to take ownership of the property, since the property can’t be sitting abandoned or in limbo without any owners.
If a person dies without a will, their estate is then categorized as intestate. Similar to escheat, this could mean that the individual’s property is turned over to the state to manage. While these laws vary from state to state, the lack of a will can turn a person’s estate over to the government.
A quitclaim deed is a legal document used to transfer property ownership without guaranteeing the property is free of liens or claims. It’s often used between family members or to clear up title issues.
A survey is a detailed map or description of a property’s boundaries and features, often used to confirm legal property lines. It helps prevent disputes and ensures accurate legal descriptions.
Title insurance protects property buyers and lenders from financial loss due to defects in the title, such as liens or ownership disputes. It provides peace of mind during real estate transactions.
A title search is a review of public records to verify the legal ownership of a property. It ensures there are no outstanding claims or liens on the property.
Encumbrances are legal claims or restrictions placed on a property that can affect its value or restrict the owner's ability to transfer it. Common examples include liens, easements, and deed restrictions. Encumbrances do not prevent property ownership but can complicate the sale or financing of the property if not resolved or understood properly.
Encroachments occur when a structure or improvement, such as a fence, driveway, or building, extends onto a neighboring property without permission. This can create disputes between property owners and may need to be resolved before a property can be sold or transferred. Encroachments can affect property values and lead to legal issues if not addressed.
Deed restrictions are limitations or conditions imposed on the use of a property, often by the developer or homeowner’s association (HOA). These restrictions are written into the deed and can govern everything from the type of structures that can be built to the color of paint used on the home’s exterior. Deed restrictions remain in effect even after the property is sold and are legally binding on future owners.
In real estate, a bilateral contract is a contract that involves two people, each with a contractual promise they must perform. As a result, each party is obligated to complete their tasks according to the contract. For example, a seller will give a deed to the property in exchange for money from the buyer. Both parties are held responsible for their side of the contract.
In a unilateral contract, only one person or party is obligated to perform their contractual duty. For example, if you lose your wallet and offer a reward for finding the wallet, they’ll only get the reward if they find and return the wallet. Only one person is contractually required to perform a duty.
In Latin, the phrase caveat emptor translates literally to “buyer beware.” For real estate, this means that when a buyer is purchasing a house, it is up to them to be familiar with the condition and inadequacies of the house. While the seller will provide their own disclosures about the condition, it is up to the buyer to also get their own data to inform their decision about the property. Usually, this means that a buyer will hire an inspector to provide a first-party report about the status of the house where they can have a full picture of the property, separate from that provided by the seller. From there, the buyer will be able to make their own decision with the knowledge they have.
A dual agency agreement is when a real estate agent represents two people or parties on the same deal. Usually, this will mean an agent is helping both the buyer and seller, and they’ll receive the full commission. While this is not always legal, it is in California. When you represent both the buyer and the seller on the same deal, you’ll have two principles. That means you earn the whole commission. This is different than a single agency, where the agent will only represent one party.
Fiduciary duties are the ethical and legal obligations that real estate agents and brokers have toward their clients. These duties include loyalty, confidentiality, full disclosure, obedience, reasonable care, and accounting. A fiduciary is required to act in the best interest of their client, putting the client’s needs above their own and being transparent and honest throughout the transaction.
A written contract in which a buyer hires an agent and sets the agent’s compensation up front. After the 2024 NAR antitrust settlement and new state laws (e.g., California AB 2992 effective Jan 1 2025), buyers must sign this agreement before touring homes.
A short-form addendum that specifies how—and when— the buyer’s agent will be paid if the seller offers zero cooperative commission. Required in many MLSs beginning in 2025 to ensure fee transparency.
A National Association of REALTORS® rule that requires a listing to be submitted to the MLS within one business day of any public marketing. Aims to curb pocket listings and promote fair housing.
In real estate, commingling occurs when an agent mixes their client’s funds with their own funds. Usually, these funds may be designated for different purposes and in some instances, the funds may be from different sources. An example of commingling is when the homebuyer provides the money to buy a home but the real estate agent deposits the money in their personal bank account. The money becomes mixed with the agent’s personal funds.
Steering is when a real estate agent discriminatorily influences the choice of a buyer by only showing them properties in certain communities. This discrimination is often based on factors like the buyer’s gender, race, sexual orientation, religion, or other protected factors.An example of steering would be showing a person of a race only properties that are located in communities or neighborhoods where their race is prominent while avoiding areas dominated by another race.
Kickbacks refer to illegal payments or incentives offered in exchange for steering business or influencing a real estate transaction. In real estate, kickbacks typically occur when a party, such as a real estate agent, receives undisclosed compensation from a service provider (e.g., a lender or contractor) for referring clients. These payments are illegal under the Real Estate Settlement Procedures Act (RESPA), as they can create conflicts of interest and unfairly increase costs for consumers.
A contingency is a condition included in a real estate contract that must be met for the transaction to proceed. Common contingencies include financing approval and satisfactory home inspections.
The Multiple Listing Service (MLS) is a database used by real estate professionals to list and access property information for sale or rent. It provides detailed descriptions, images, and pricing information about properties, helping agents and brokers collaborate and share information efficiently. The MLS is one of the primary tools used to market properties and facilitate real estate transactions.
An open house is an event where a property for sale is available for prospective buyers to view without scheduling appointments. It’s often hosted by the seller’s real estate agent.
A three-page disclosure that gives borrowers a good-faith estimate of interest rate, monthly payment, and closing costs. Lenders must deliver it within three business days of a completed application. It replaced the GFE in 2015 under TRID.
A five-page statement of all final loan and settlement costs, due to the borrower no later than three business days before consummation. It replaced the HUD-1 Settlement Statement for most closed-end consumer mortgages.
When you obtain a mortgage, the party benefiting from your payments is the beneficiary. In most cases, this is the bank or lender that you're borrowing money from to buy the house. This is because you promise to make payments back to the lender, and they, in turn, benefit from the payments, including the interest on the loan.
Equity is the difference between what you owe on a property and the house's current market value. Generally speaking, the more time that has passed since you bought a property, the more equity you'll have in the house. Then, when you go to sell the house, you'll be able to cash out on this value and benefit from your investment.
An FHA loan is a type of loan insurance that the Federal Housing Administration backs. This program was created in 1934 by the Housing and Urban Development department to make it easier for people to buy homes, as it requires a smaller down payment than conventional loans. Today, buyers securing an FHA loan only need a 580 credit score and 3.5% of the home's cost as a down payment. This is why FHA loans are ideal for first-time homebuyers, as they require less up-front cash and are better for people establishing their credit. However, all FHA loans require mortgage insurance to protect your lender against losses. So make sure to consider this added cost when considering an FHA loan!
An acceleration clause is a term in a mortgage agreement that permits the lender to accelerate repayments, usually only invoked when the borrower misses payments or is in violation of the loan agreement. Otherwise known as a mortgage acceleration, these standard protections are implemented to prevent the mortgage lender from defaulting on a loan. When enacted, the borrower is responsible for paying the amount owed, including any accumulated interest since your last payment. If not paid by a set date, your lender can begin foreclosure.
When you obtain a mortgage, your loan will go through a phase called underwriting. Once under contract on a property, a person called an underwriter will go through the process of assessing the risk of lending the borrower the loan. During this process, the underwriter will not only evaluate the borrower applying for the loan — but will also assess the condition of the property being purchased. The bank is looking to ensure that the borrower's and property's qualifications are up to standards and will consider the risk involved with loaning money for the purchase.The borrower must submit documents verifying their financial statuses, like bank statements, proof of employment, and tax returns. Additionally, the underwriter will use the appraisal to evaluate the property to ensure it is in appropriate condition and worth the amount of money you're purchasing it for.
A hypothecation agreement is when a borrower agrees to offer an asset as collateral in exchange for a loan. Used frequently in mortgages, while a borrower technically owns the house, a lender can seize a home as collateral if debts are not paid or the terms of the loan agreement are not met. While the bank owns the property, it cannot claim any income or cash flow generated from the home unless the borrower defaults on their loan.
Your debt-to-income ratio compares how much you earn every month versus how much you owe. This considers your wages pre-tax, then calculates expenses like rent, mortgage, car payments, student loans, or other types of debt. When purchasing a home, your lender will look at your debt-to-income ratio when determining how much you can afford.
A fixed-rate loan is a mortgage loan where the interest rate stays the same throughout the loan's lifetime. This can be beneficial because you'll always know how much you owe, as monthly payments won't change over the length of the loan. In addition, if interest rates are currently low, obtaining a fixed-rate loan can be an intelligent financial decision.
TRID stands for TILA (Truth in Lending Act) RESPA (Real Estate Settlement Procedures Act) Integrated Disclosures. This disclosure was specifically developed so that the lender has to be transparent in the purchase and provide two things. The first is a loan estimate that outlines fees and costs associated with a mortgage. Additionally, they must provide a closing disclosure listing exactly how they will charge and where each fee is allocated in the closing process.The Truth in Lending Act was developed in 1968 to protect the consumer and provide transparency throughout the lending process. Shortly after, the Real Estate Settlement Procedures Act was developed to prevent unnecessary settlement costs and promote transparency into each fee’s purpose. TRID wasn’t put in place until 2015, but now ensures all parties are providing the appropriate information and disclosures for both buying and selling.
A subordination clause in real estate is a provision found in a mortgage or lease agreement that establishes the priority of that mortgage or lease in relation to other potential claims or liens on the property. Essentially, it determines the order in which creditors will be paid in the event of a default or foreclosure. If a subordination clause is included, it means that the current agreement (e.g., a second mortgage) will be subordinated to any future loans taken against the property, such as a refinancing or construction loan. This clause is commonly used to protect the interests of lenders by ensuring that newer loans have a higher repayment priority over older ones, which can make it easier for property owners to secure additional financing.
A home equity loan allows homeowners to borrow against the equity they have built up in their property. It provides a lump sum of money with a fixed interest rate and is repaid over a set term. Home equity loans are commonly used for large expenses such as home renovations, debt consolidation, or medical bills, and they are secured by the borrower’s property, which means the home can be foreclosed upon if the loan is not repaid.
A HELOC, or Home Equity Line of Credit, is a type of revolving credit that homeowners can take out against the equity in their property. The loan is secured by the home and typically has a draw period during which the borrower can withdraw funds as needed, similar to a credit card. The draw period is followed by a repayment period where monthly payments must be made. HELOCs are often used for home improvements, debt consolidation, or other large expenses because they usually offer lower interest rates than unsecured loans.
Amortization refers to the process of gradually paying off a loan over time through regular, scheduled payments. Each payment covers both principal (the loan amount) and interest (the cost of borrowing), with the proportion going toward principal increasing and the proportion going toward interest decreasing over time. The goal of amortization is to completely pay off the loan by the end of the term. Mortgages, car loans, and personal loans are commonly amortized.
Pre-approval is a process where a lender evaluates a borrower’s financial situation—including credit score, income, debts, and assets—and commits to providing a loan up to a certain amount. Receiving pre-approval gives the borrower a clear understanding of their budget and makes their offer more attractive to sellers, as it indicates that the buyer is financially capable of purchasing the property.
Pre-qualification is an initial assessment by a lender to estimate how much a borrower might be eligible to borrow. It’s a less rigorous process than pre-approval, usually based on self-reported financial information. Pre-qualification gives potential homebuyers an idea of their borrowing capacity but does not involve a credit check or verification of the information provided, making it less reliable than pre-approval.
An origination fee is a charge by lenders for processing a loan application. It’s usually expressed as a percentage of the total loan amount.
The principal is the original amount of money borrowed in a loan, excluding interest. It represents the balance that the borrower must repay to the lender.
A deed of trust is a legal agreement where a third party (the trustee) holds the title to a property until the borrower repays the loan. It’s commonly used in states that do not utilize traditional mortgages.
A fixed-rate mortgage is a loan with an interest rate that remains constant throughout the loan's term. This predictability makes it a popular choice for borrowers.
Pre-approval is a lender’s conditional agreement to lend a borrower a specified amount for a home purchase. It shows sellers that the buyer is financially qualified.
Refinancing replaces an existing mortgage with a new one, often to secure a lower interest rate or better loan terms. It can help borrowers save money or access equity.
A VA loan is a mortgage guaranteed by the U.S. Department of Veterans Affairs. It offers favorable terms for eligible veterans, active-duty service members, and their families.
An appraisal is a third-party professional opinion on the value of the property. This is generally done to ensure that the value of the property is in line with how much it’s being purchased for and guarantees the bank that it’s being purchased for a fair price. The appraisal helps the lender protect itself against overfunding and ensures that the price is reasonable for the seller. Usually, the buyer will pay for the appraisal once under contract on the house. However, it’s generally not required for all cash offers unless the buyer specifically requests it.
A comparable, often referred to as a comp, is a valuation of a property according to a study of similar properties in the area that you’re looking to buy or sell in. A comp is used to determine the home’s value based on surrounding properties that have recently sold and can indicate the appropriate value of your property. For buyers, comps are helpful to ensure you’re putting in a competitive offer on the house. For sellers, they provide clear pricing parameters for how much your home is worth. Comps consider things like the size of the property, the year it was built, and the property’s features. Real estate agents use comparables to help sellers list their property at an appropriate price and help buyers make an appropriate offer.
A drive-by appraisal is sometimes used in real estate to determine the home’s value. While not as in-depth as a full appraisal, a drive-by appraisal mainly evaluates the house’s exterior. An appraiser will visit the house, make notes and take photos of the home’s exterior, and make a valuation call based on its street value. Depending on the current market and the property you’re purchasing, your lender may feel comfortable with just ordering a drive-by appraisal versus a full appraisal.
An appraisal report is the written overview of the appraiser’s findings. This generally includes detailed results of similar properties in the area that have sold, a valuation of the property, and how the neighborhood will impact the home’s future value. This overview will outline precisely how the appraiser came to their conclusions and cite the corresponding evidence associated with the report, like photos and data.
A sales comparison approach is a standard real estate appraisal practice that compares one property to other recently sold properties with similar characteristics. Many in the industry use this method to determine how individual features on the house make up the home’s overall value. The sales comparison approach considers factors like the size of the house, location, other sold listings, price per square foot, condition, and age of the house.
In the income approach, an appraiser determines the property’s value based on the income the property generates. This is frequently used in multi-family housing or investment properties and considers factors like occupancy rates, operating efficiency, and condition of the property. This is also called income capitalization.
Depreciation is the decrease of the home’s value. A few factors are considered when calculating depreciation — physical depreciation, functional obsolescence, and economic obsolescence. Physical depreciation refers to the decline of the property’s value over time due to time, elements, and usage. For example, natural weathering and decay would be considered physical depreciation. Functional obsolescence is when deficiencies or undesirable aspects of the building decrease its value, such as historic architecture or outdated facilities. Lastly, economic obsolescence is a decrease in property value due to a change in surrounding or local economics and often has nothing to do with the property itself.
A CMA is a professional evaluation of a property’s value based on the sale prices of similar properties in the area. Real estate agents use CMAs to help sellers set a competitive listing price.
Fair market value is the estimated price a property would sell for in an open, competitive market. It reflects what a willing buyer and seller agree upon under normal conditions.
Escrow, in real estate, is a legal arrangement between the buyer and the seller to have a neutral third party hold the funds temporarily until specific conditions have been met, usually a transfer of title. Once the set condition is met, the funds are transferred to the seller.Escrow typically assures the seller of the seller’s good faith and protects the buyer from a fraudulent transaction. Escrow companies typically serve as a neutral third party and they hold onto the deed and other related documents. Remember, escrow is a neutral third party that protects the integrity of the transaction.
A holdover tenant is a lessee who stays in the property longer than they are supposed to. Once their lease is up, they’re supposed to be vacated from the property. But a holdover tenant stays in the property past their intended time. Even if the tenant is paying rent but they’re past their lease, they can be sued for being a holdover tenant.
A real estate transfer disclosure statement, also called a TDS, is a document containing what items are included in the purchase of a home. This is the seller's opportunity to put in writing what is included in the purchase, including all the deficiencies listed and a checklist of items that come with the house like a microwave, furniture, or any other belongings. This is often the biggest disclosure a real estate agent will utilize when working with a buyer.
Foreclosure is the legal process through which a lender takes ownership of a property after the borrower fails to meet the terms of their mortgage loan, typically by missing several payments. The lender will seek to recover the remaining balance by selling the property, often at auction. Foreclosure can have serious consequences for the borrower, including loss of their home and a significant negative impact on their credit score.
A short sale occurs when a homeowner sells their property for less than the outstanding balance owed on the mortgage. The lender must approve the sale, as they are agreeing to accept a reduced payoff amount. Short sales are typically considered as an alternative to foreclosure and can help homeowners avoid the more severe financial repercussions associated with foreclosure proceedings.
An inspection is a thorough examination of a property’s condition conducted by a professional inspector. It typically includes a review of the structure, electrical systems, plumbing, and other critical components. Inspections are an important part of the home-buying process, as they can uncover potential problems that may not be immediately visible, helping buyers make an informed decision.
The Buyer’s Inspection Advisory is a document provided to prospective homebuyers, outlining the importance of conducting thorough inspections and investigations of a property before finalizing the purchase. It informs buyers about their right to inspect the property for any defects or concerns that could affect their decision to move forward with the transaction.
Closing costs are additional expenses incurred by buyers and sellers to finalize a real estate transaction. These include fees for loan origination, title insurance, appraisals, and other administrative services.
A home inspection is a thorough examination of a property's condition, typically conducted by a professional inspector. It identifies any potential issues or defects before the sale is finalized.
A walkthrough is the final inspection of a property by the buyer before closing. It ensures the property is in the agreed-upon condition and any requested repairs have been completed.
In real estate, GRM stands for Gross Rent Multiplier. It is a metric used to evaluate the potential profitability of an income-producing property. GRM is calculated by dividing the property’s price by its annual gross rental income. For example, if a property is priced at $300,000 and generates $30,000 in annual gross rent, the GRM would be 10 ($300,000 ÷ $30,000). A lower GRM indicates a better investment opportunity because it suggests that the property’s price is low relative to its rental income.
NOI is the total income generated by a property after deducting operating expenses. It’s a key metric for evaluating the profitability of real estate investments.
A REIT is a company that owns, operates, or finances income-generating real estate. Investors can buy shares in REITs to earn returns without directly owning property.
A 1031 exchange allows property investors to defer paying capital gains taxes by reinvesting the proceeds from a sold property into a similar investment property. It’s a popular strategy for growing wealth through real estate.
The post-settlement practice of negotiating the buyer-agent fee separately from the listing commission. Sellers may now list a property without offering any buyer-agent payout, shifting the cost to the buyer or a lender credit.
Mello-Roos is a special tax imposed on properties within a community facilities district (CFD) in California to finance infrastructure projects and public services, such as schools, roads, and parks. Homeowners in these districts pay Mello-Roos taxes in addition to regular property taxes, and the amount can vary depending on the development and services funded.
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