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California Real Estate Exam: Everything You Need to Know
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Making an offer to buy a home can be intimidating — it’s often one of the most significant purchases most people will ever make! To protect themselves, buyers will sometimes add contingencies to the contract.
Understanding this tool and how it affects real estate transactions is crucial. Read on to understand what a contingency is, and the common types you’ll see on a contract.
A contingency is defined as a “future event or circumstance which is possible but cannot be predicted with certainty.” In real estate, this refers to a specific action or item in the contract that must happen for the contract to become legally binding.
While most sellers prefer to receive a contingency-free offer from a buyer, they can be valuable tools for both the buyer and seller to back out of the contract. They provide buyers an out if conditions aren’t met.
There are tons of contingencies, but the four most common are appraisal, inspection, loan, and home sale.
An appraisal contingency ensures that your home’s appraisal is in line with your purchase price. This helps confirm that the buyer is purchasing the home for the appropriate fair market value; if not, they can back out of the contract.
If the appraisal comes back higher than the purchase price, there is generally no issues for the buyer or the bank. But if the appraisal determines the home is not worth the purchase price, there can be issues for the buyer.
Lenders will often not loan money for more than a home is worth. Therefore, a low appraisal can mean the seller might have to decrease the property’s price, or the buyer will have to pay the difference in cash between the appraisal and purchase price.
However, the buyer can back out of the contract if there is an appraisal contingency. It can also stipulate that if the appraisal comes in lower, the seller will reduce the price to the appraised value.
A home inspection contingency is often the most common real estate contingency. The National Association of Realtors® estimates that about 80% of buyers include a home inspection contingency in their contract.
This contingency gives the buyer a window of time to inspect the property professionally by a third party and determine if there are any issues with the house. They will review the exterior and interior structures and systems during this process. This includes things like HVAC, electricity, plumbing, roofing, and more.
If the inspection comes back with major issues, the inspection contingency clause will allow the buyer to back out of the contract, or potentially negotiate with the seller to have the issues fixed before closing on the property. If your seller is unwilling to address the problems, the contingency will allow you to terminate the contract while receiving your earnest money deposit back.
An inspection contingency is crucial to ensure that you’re not stuck purchasing a defective property riddled with problems.
A loan contingency, sometimes called a mortgage or financing contingency, states that the contract is contingent on the buyer getting their financing approved from a lender.
Often a buyer will get pre-approved before starting their home search, which indicates a lender has already taken an initial look at their finances and determined if they are eligible for a loan. But, once the underwriting process begins, there can be problems finalizing or securing the loan.
A loan contingency allows the buyer to back out of the contract and receive their earnest money deposit back if they can’t qualify for a loan by a specific date. This usually gives 30 to 60 days to finalize the loan with a lender.
This contingency can also benefit the seller, allowing them to cancel the contract if the buyer hasn’t gotten financing approval by the set date. If this happens, the seller will have to put the home back on the market and try to find a new buyer.
If a buyer is prepared to purchase a home with cash, they will waive a financing contingency since they don’t need to secure a loan to go through with the purchase. A cash offer is often seen as more appealing to a seller who doesn’t have to worry about the buyer getting a loan to purchase the property.
If a buyer is trying to sell their old home before purchasing a new home, they can include a home sale contingency — otherwise known as a concurrent closing.
This ensures that the buyer is able to close on their old home, and move forward with purchasing the new home. The buyer might need the proceeds from the sale of their old home or want to avoid paying two mortgages at once.
With almost half of buyers already owning a home, this contingency is extremely common if the buyer has a home to sell. Before accepting an offer contingent on the sale of the buyer’s home, the seller might want to consider a few things, like if the house is already on the market or under contract.
If the buyer’s home doesn’t sell or get under contract within the specified time, the seller can walk away and put the home back on the market or negotiate with the buyer to extend the contract.
Sometimes a “kick out” clause is included in this contingency, which allows the home to stay publicly on the market while the buyer tries to sell their home. In this case, the seller could accept another offer and move forward with that contract instead.
If there is an offer with contingencies, the buyer and seller generally have 30-60 days to ensure the contingencies are met. This is also known as the “contingency period.” This time frame can be shorter or longer depending on the terms agreed on but time is of the essence when contingencies are included.
If the buyer doesn’t take the necessary steps to ensure the contingencies are met, the contract could fall through and they could lose the home. This also means that sellers will have to put the home back on the market — something that no one wants to happen!
Contingent vs Pending in Real Estate
A home that is under contract can be a contingent or pending offer. In the case of a contingent contract, the seller can keep the listing active in the MLS if the buyer's contingencies aren’t met. But if the property is listed as “pending,” it means there weren’t any contingencies in the offer or all the terms were met.
During the contract negotiations, a seller might accept a contingent offer but still continue showing the property or even accept other offers — like the “kick out” clause explained earlier.
Final Thoughts Contingencies in Real Estate
Many different types of contingencies can be included in your home purchase contract. While these can help protect the buyer, sellers often see these stipulations as hurdles to selling their house.
A great real estate agent can guide clients through the offer process and ensure the right contingencies are in place to protect their best interests.
When you see a home listed as contingent, it means there’s an accepted offer with contingencies that still need to be met. The seller may keep showing the property or accept backup offers.
If a home is pending, the contingencies have either been met or waived, so the sale is closer to final.
A: Yes, sellers can refuse or counter offers with contingencies—especially if they receive multiple offers. They might prefer an offer with fewer contingencies to reduce the risk of the deal falling through.
A: Absolutely. If your inspection uncovers issues, you can request repairs, a lower purchase price, or a seller credit. If the seller refuses, you can typically walk away without losing your earnest money.
A: With a financing contingency in place, you can back out of the contract and keep your earnest money. The seller may also decide to walk away if you’re unable to secure a loan within the agreed timeframe.
A: Home sale contingencies are still used, but in a competitive market, sellers might be less willing to accept them. If you must include one, make your offer as strong as possible in other areas—like a higher earnest deposit or flexible closing date.
If you want a career as a real estate agent, it all starts with getting your license.
Remember that getting a real estate license is a privilege. As with any license, it comes with rules and regulations that you must adhere to.
If you break rules there will be consequences. Some of those consequences can result in more than a fine. You can be subject to having your license suspended and, in some cases, revoked.
It is crucial to your career to understand what actions may put your license at risk. First, let’s define these terms in more detail. We will then discuss potential resolutions to reverse a suspended or revoked license.
A suspended real estate license means that the licensee is prohibited from conducting real estate.
A real estate agent will still hold their license, but they are not allowed to do business. Like a driver's license suspension, the person still has their license but can't drive.
Some circumstances will lead to a license getting suspended.
A real estate license is suspended based on the condition. This is also known as a “conditional suspension” and can be reversed when those conditions are met.
This occurs when the licensed party must complete requirements to maintain their license, such as education. For example, after the 4-year mark, you are required to complete your continuing education.
If you don’t prove that you fulfilled the condition to the DRE before the expiration date then your license status is under “conditional suspension” until completed. Once these terms have been met, the suspension is lifted.
A revoked real estate license means that you are no longer authorized to conduct real estate or real estate-related activities.
This happens if the licensee is in multiple violations of the Business and Professions Code. Each case is different and is investigated by the Department of Real Estate to determine whether or not the actions warrant revocation of a license.
Yes, a real estate license can be revoked for a multitude of reasons. The answer to which actions lead to revocation is complicated and depends on many factors.
Instances are not limited to one particular area. But, licensees who violate one or more regulations concerning finances are more at risk of losing their real estate license.
The Business and Professions Code Section 10176(g) allows the Real Estate Commissioner to temporarily suspend or permanently revoke a real estate license if the licensee is found guilty of claiming or taking any secret or undisclosed amount of compensation, commission, or profit.
One of the most common reasons for revocation while licensed is the “non-disclosure of an action” that violates the Business and Professional Code.
For example, if you get a DUI. A first offense DUI is considered a misdemeanor. This is not grounds for having a license revoked, it can be if you fail to report it to the DRE. Here is the section outlined in the code:
ARTICLE 3. Disciplinary Action [10175 - 10186.9] ( Article 3 added by Stats. 1943, Ch. 127. )
10186.2. (a) (1) A licensee shall report any of the following to the department:
(A) The bringing of a criminal complaint, information, or indictment charging a felony against the licensee.
(B) The conviction of the licensee, including any verdict of guilty, or plea of guilty or no contest, of any felony or misdemeanor.
(C) Any disciplinary action taken by another licensing entity or authority of this state or of another state or an agency of the federal government.
(2) The report required by this subdivision shall be made in writing within 30 days of the date of the bringing of the indictment or the charging of a felony, the conviction, or the disciplinary action.
(b) Failure to make a report required by this section shall constitute a cause for discipline.
There are more than 50 disciplinary actions listed by the Department of Real Estate.
First, let’s talk about how to reinstate a suspended license.
Here is how you can reinstate your California suspended real estate license. When a license is suspended, it’s due to a condition that needs to be satisfied. When you satisfy those conditions, the DRE will reinstate your license.
Reinstating a revoked license is different. In all cases of revocation, you are required to wait one full year before requesting reinstatement. Here are the general steps in the process:
During this investigation, the DRE may review your criminal, court, and employment records. The Commissioner will also examine your behavior and conduct an interview with you since your disciplinary action.
From this investigation, the Commissioner will evaluate if you have made the necessary changes in your behavior to prevent future offenses. They will then submit a recommendation to the DRE, who will then decide whether your petition is granted or denied.
If the DRE grants your petition for reinstatement, they will send you some final terms and conditions to satisfy.
The request for reinstatement can get complicated. It would be in your best interest to hire legal assistance to help navigate you through the process. This will also ensure that all the documentation gets properly submitted.
Whether you have your license suspended or revoked, don’t despair. Nobody is perfect. Remember, there are procedures in place to help you get your license reinstated.
But, be proactive and don’t put your real estate license at risk. Be an informed agent. When you follow all the rules and regulations, you can avoid suspension or revocation of your license.
A real estate agent means more than being a real estate agent.
It also means you can become a leasing agent in California.
Leasing agents have the responsibility of finding new tenants for their properties, providing customer support for them, and handling the signing of leases.
Let’s talk about what you need to do to become a leasing agent in California.
Leasing in California falls under the property management category. You don’t need a real estate license to act as a property manager or lease agent for your properties. But there’s a catch.
There are specific leasing or property management activities that require either a real estate license or a broker license.
Here’s a list of leasing activities that require a license:
Leasing agents have more power and freedom with a real estate license. They can’t compete in the market without it.
The first step of becoming a leasing agent in California is to get a real estate license. This guide gives you instructions on how to get your real estate license and become a leasing agent.
To become a licensed leasing agent, you need to:
If you meet these requirements, you can get hired at a real estate brokerage and practice leasing.
An accredited real estate school is required to fulfill your pre-licensing education before getting a real estate license. A real estate school will provide three required courses for students:
Each course will help you understand real estate as a practice and efficiently do this job.
After you pass an accredited real estate class you get a certificate of completion, which will serve as proof of completion. To schedule your California real estate exam, you need to collect all three certificates.
This is your final step before getting your real estate license. Schedule and pass the California real estate exam. Students must apply for the exam before scheduling it.
The application must include:
After putting together the paperwork above, you can mail your application to the DRE (Department of Real Estate).
Leasing agents must hang their license with a brokerage, which simply means committing to work with a brokerage. After passing the state exam, the DRE will mail your real estate license. The license is required to sign with a brokerage.
If you don’t want to sign with a real estate brokerage and represent yourself, you can get a real estate broker license instead.
The next step you need to follow is to get a leasing agent certificate in California. This is how you become an accredited leasing agent. A certificate is proof of proper educational training and accreditation.
Getting your leasing agent certificate requires more schooling. You also need to have six months of leasing experience, which can be obtained while taking the course as well. You must pass the examination within 6 months of declaring candidacy.
Leasing agents are hired without experience and they receive the training they need from the brokerages. This experience will be needed to get the leasing agent certificate as well.
The additional on-the-job training leasing agents receive helps them learn the specific skills and systems they will need to use in their careers. This training is often part of the leasing agent’s hiring process at a new job. On-the-job training can last anywhere between a few weeks to months.
Customer services and sales experience is handy when becoming a leasing agent.
The average salary of a leasing agent in California is $17.79 per hour in 2021 according to Indeed, and you can find full-time and part-time positions as well.
Leasing agents have many responsibilities.
They meet with prospective tenants and take them on tours of the units, highlighting the benefits of the property.
Leasing agents also deal with preparing and executing lease documents, conducting credit and background checks of potential tenants, and collecting payments such as monthly rental payments from existing tenants and security deposits from potential tenants.
They also have the role of informing residents of any upcoming issues with the property or changes of their rental agreement and monitoring the use of common areas and community facilities.
Leasing agents create promotional materials to advertise vacant units on the properties they manage.
Becoming a leasing agent is a long process that requires a lot of work. But the results you get in the end are fulfilling.
If you always wanted to be a leasing agent and land a job in this field, now it’s your opportunity. Getting your leasing agent license involves schooling and on-the-job experience, but you can build a career that is both rewarding and well-paid.
As a real estate agent, you can’t go completely alone. If you want to help people buy and sell properties, you need to have a broker.
You might be wondering what is the best real estate brokerage firm for new real estate agents.
Choosing a broker is one of the biggest decisions in a real estate agent’s career, and it’s not an easy choice to make. Simply looking at company websites is not going to make things clear.
Brokerages are very different from one another, but they share some similarities. So, how do you choose the right type of brokerage?
Let’s evaluate the differences between national franchise, boutique, and virtual brokerages to help you determine which one you prefer.
National brokerages are large national companies (franchises) that sell the rights to use their branding, business model, and name to brokers. Some examples are brokerages like Century 21, RE/MAX, and Keller Williams.
The broker that buys the franchise has to pay a set percentage for every deal they close in the office. And while many franchises are independent businesses, all of them follow regulations and rules set by the head office.
You get instant credibility working with a trustworthy and familiar brokerage name.
You get access to hundreds or thousands of offices all over the country, which means you can use those in the states that are better suited for clients.
National franchises give you access to discounted transaction management software, website-building software, and CRM software. You also get plenty of prepared marketing solutions such as website building tools, direct mail, and online advertising templates and drip campaigns.
Another important advantage of a national franchise brokerage is the training you get. Many franchises have developed incredible training programs for new agents to help them achieve success faster.
Some new agents find large franchises more impersonal and they don’t feel valued as they would feel in a boutique brokerage. There’s also a lot of competition for leads, as they are often distributed by management.
And since we are talking about a corporate office, big decisions take a long time to process and creative freedom is limited. Making positive changes or reaching someone in management is very difficult.
Boutique brokerages are typically owned by one small company and managed by one broker. Examples include Bayside Real Estate in Los Angeles, Webb Realty in Northern California, and Core Real Estate in Manhattan.
Even if boutique brokerages are much smaller than a franchise brokerage, they are not limited in earning potential. Some of the most successful brokerages in the country are boutique brokerages, pulling the highest numbers in sales per year.
An individual agent’s contribution is much more important for a boutique brokerage, therefore the brokers spend more time nurturing and coaching new agents.
You have less competition for leads since there’s a small number of brokers and agents. Experienced agents will often let newer agents handle the majority of new leads.
Another great advantage of boutique brokerages is teamwork. Everyone helps each other for the benefit of the brokerage, and that makes every agent feel like a valuable part of the team.
Having no corporate office makes room for quick and easy decisions. Best practices and policies can be changed overnight. And all agents get more creative freedom when it comes to advertising and marketing compared with national brokerages where there are always strict creative rules.
One disadvantage of boutique brokerages are smaller marketing budgets and lower online traffic to websites that bring leads. That can make things hard for new agents.
You also have no brand recognition outside your immediate town and no discounted access to technology that you need to use for lead generation and follow-up systems.
The invention of SaaS real estate software and the reliance on online advertising has made virtual brokerage a viable option for experienced and independent real estate professionals.
You don’t need to walk into a brokerage office anymore, you can handle your real estate work from your computer.
One of the biggest advantages of virtual brokerages is the attractive commission splits. Since they don’t pay for expensive office spaces, they can offer between 70% to 100% to agents.
The absence of a desk fee can also mean you can put that money towards marketing. An extra few hundred dollars in Facebook Advertising or Zillow Premier Agent can have a great return on investment.
Virtual brokerages also come with better real estate tools. You get access to integrated transaction management tools, CRM tools, and websites.
One last advantage of virtual brokerages is the independence you get. There are no more weekly sales meetings, training sessions, or social outings that you need to participate in.
when going virtual, there’s less potential for networking. While with a boutique brokerage you get the opportunity to build a network and get leads from other professionals, this option is not available for virtual brokerages.
You also get fewer training opportunities since you won’t be in contact with more experienced agents to grow your expertise.
And working alone can be isolating and it’s not for everyone. Dealing with all the highs and lows of this profession by themselves might be too stressful for some agents, while an office culture can give them moral support.
There is no perfect solution for all agents and therefore choosing the right type of brokerage comes down to the professional goals and skill sets of each individual agent.
National brokerages come with the reputation, training, and technology access advantage of being a franchise. But it can also be a competitive, inflexible, and impersonal environment.
Boutique brokerages are more personal, and they offer a great team environment with creative freedom. But, they don’t come with a national reputation or big budgets for marketing or software.
Virtual brokerages come with high commissions and instant access to all the software you need. But working alone from the computer might not be ideal for everyone and you can’t get training from more experienced agents.
If you analyze the pros and cons of all types of brokerages, you can figure out which one suits you better before making the next move in your career as a real estate agent.
Did you know that one of the scariest things for real estate agents is filling out contracts? Contracts means legalities and there's nothing more stressful than putting your client into a legal quagmire. Some of the contract terms that agents mix up are "valid," "void," and "voidable."
Whether you're learning about contracts for the first time or studying for the real estate exam, knowing the difference between these terms is vital! So, let's clear up the confusion so you don't find yourself in a legal situation down the road.
By the way, this video below is a great explanation of void and voidable, how they're different, how they're the same. I recommend you watch it for a quick and easy understanding of the two terms.
Let's first start with the valid contract. A valid contract is an agreement between two parties that creates mutual legal obligations. The legal obligations are enforceable by law.
The contract can be oral or written, however oral contracts are much harder to enforce and they should be avoided. Making the valid contract written and clear with all the terms and conditions is the best way to make sure the agreement is respected if you need to enforce it by law.
There are 5 important elements that all valid contracts should have to be legal:
1. The parties signing the valid contract have to be of legal capacity
That means the required legal age and mental capacity to sign a contract.
2. Must have an offer
One of the parties must make an offer in the contract.
3. Offer acceptance
The offer made in the contract must be accepted.
4. The valid contract must have a legal purpose
No illegal activity can be used in a contract.
5. Adequate consideration
Consideration means that both parties agree to provide something of value in the agreement they sign (money, car, property, manual labor, etc.). For example, I give you a car and you give me money for it. I give you property and you give me another property in exchange.
That means gifts can’t be legally enforced even if you sign a contract, because they are offered in generosity and that’s not legally binding. If you offer someone a gift in exchange for manual labor, that will be legal because there is something of value offered in return.
A void or null contract means a contract that cannot be enforced (unenforceable) by any of the parties. That happens when one of the elements required for legal contracts has not been met.
A void contract is considered not executable by design.
A simple example would be to include something illegal in the contract, like giving drugs in exchange for property. That contract is void because it is illegal. There are many situations when the contract is void from the start.
However, a contract can be valid when signed and then become void due to changes in law or some situations that make the contract impossible to fulfill. For example, you could sign a contract that is legal, but before fulfilling the contract the law changes and makes the contract illegal, and therefore it becomes void.
A voidable contract is a contract in which one of the parties has the option to reject or enforce the contract when the terms of the agreement are not accurately respected or represented. That could mean the information in the contract was not accurate in the beginning or one of the parties didn’t respect the deal entirely.
One party has the option to void the contract or to keep it valid while the other party doesn’t have this option. A voidable contract is valid and legal until revoked or canceled.
One simple example would be John buying a house from Mark. John likes the house as it is, especially the way the garage was turned into a home gym. The contract states the house should remain as it is, but Mark turns the home gym back into a garage. Now the contract is voidable, and John has the option to void the contract and cancel the deal or keep it valid and accept the new garage.
Another example would be signing a contract with one of the parties under the legal age. The minors can enter into contracts but they can breach the terms without legal repercussions since they don’t have the legal age. When it comes to light that one party was under the legal age at the moment of signing the contract, they can choose to ratify the contract when they are legally capable or void it.
Contract ratification means signing new terms that both parties agree that correct the issue which made the contract voidable.
To clarify the major differences, void contracts are invalid from the start, while voidable contracts can be canceled or kept as they are by one of the parties. Valid, on the other hand, are perfectly legal contracts.
Neither of the parties can enforce a void contract, while one of the parties can enforce a voidable contract if they choose to.
Void contracts don’t give anyone an option, they are invalid no matter what the parties do. Voidable contracts are valid until one of the parties decides to cancel or revoke them for legal reasons.
Valid, void, and voidable can be confusing when it comes to contracts, but there are some things that can help you remember the difference.
In other words, void means null. It means it’s not valid from the start, and it could be illegal or not to respect all the elements that make contracts valid.
Voidable means it COULD be void, and it also means one of the parties has the option to void it or keep it as it is.
Void contracts give no option to both parties while voidable contracts give options to one of the parties. This should make it easy to remember the difference.
If you have a California real estate license can you transfer it to another state? What about if you have an out-of-state real estate license and want to transfer it to California?
Does this mean you have to go through an accredited real estate school, pass the state exam, and sign with a real estate brokerage?
Not entirely.
Let’s explore California’s reciprocity laws so you can learn about how to transfer your real estate license.
So, what is a real estate license reciprocity? Real estate license reciprocity allows people, with active real estate licenses, to skip the education step of another state they wish to get their real estate license in.
In other words, you are eligible to take another state’s real estate exam to get a real estate license, given they have reciprocity.
For example, if you’re an active real estate agent moving from Alabama to Louisiana, you are eligible for a Louisiana real estate license exam, which means you don’t have to complete an accredited Louisiana real estate school.
You still have to take the state exam, pass, and hang your license with a brokerage!
Keep in mind, that your license must not have any suspensions or revocations. Before you get a real estate license in another state, you should resolve all issues with your current license.
Reciprocity rules are different from state to state and some states don’t offer any reciprocity.
Speaking of states that don’t offer any reciprocity, let’s talk about California’s real estate license reciprocity.
Unlike some states, California does not offer license reciprocity. This means that even if you're licensed elsewhere, you’ll need to meet California’s specific requirements.
That means, if you have an active license in another state, you still have to complete a California-accredited real estate school, pass the state exam, and sign with a brokerage.
Bummer.
But, there’s some good news...
If you have a California real estate license, you can transfer it to another state. Some states offer full reciprocity. That means no matter which state you have your license in, you are eligible for the real estate exam.
The states with full reciprocity are:
Also, Massachusetts offers real estate license reciprocity for good-standing license holders from California.
You don’t need to live in California to practice real estate. Although, it certainly helps.
You can get a California real estate license and still live outside of the state. That’s the case with other states as well.
Typically, real estate agents will weigh the pros and cons of getting a real estate license in California to see if it’s a worthwhile investment. If you foresee future clients who are interested in buying or selling California real estate, then it could be smart to get your real estate license.
If you have a client interested in purchasing a California property, but you don’t have a California real estate license, you can still help. As a real estate agent, you can refer your client to a trusted agent in California and still get a referral fee.
This is an effective way to bring value to your client, connect them with a trusted agent, and collect some money along the way.
This works great if you have one client moving to California, but if you foresee more clients doing deals in the Golden State, then consider getting a real estate license.
Real estate license reciprocity makes practicing real estate in other states easy. But, you have to remember that some states don’t offer reciprocity.
Also, if you choose to use reciprocity, then you need to guarantee your license is in good standing with your current state.
One last thing, if you can go the reciprocity route, then remember that you still have to pass the state exam! So, freshen up on those exam topics and don’t get discouraged.
Real estate exams? Live Scans? Mailing addresses? How does any of this work?
Submitting your real estate exam application to the Department of Real Estate (DRE) can stress you out! There’s a lot to include in your application.
And getting your application rejected because you forgot to add something can feel devastating. Not to mention the time you have to wait to get it re-approved.
We want to give you all the information you need to send in an amazing real estate exam application that will get you accepted.
So, let’s start with the requirements. What do you need to do to be eligible for the California real estate exam?
To be eligible to take the California real estate exam, you must first:
The most important thing to remember is the 3-course certificates. You cannot take the California real estate exam without first completing your pre-licensing program.
Those certificates are proof that you completed your pre-licensing education and that you’re ready to take the next step.
Recently, the Department of Real Estate has made it simple to apply for the California real estate exam online.
All you have to do is create your own eLicensing account and follow the instructions on your screen to complete this process. But, keep in mind, you can only do this if you collect all 3-certificates within 1-year of your pre-licensing school enrollment date.
If you received your 3-certificates over the course of more than 1-year, you will have to apply by mail.
To apply for the real estate exam, you must send in an application to the Department of Real Estate containing:
This part confuses a lot of people. So, we want to clear the air.
Live Scan is a digital fingerprinting process that replaces traditional ink fingerprinting in states where it's available. An applicant's fingerprints are securely transmitted to a government agency, which performs a criminal history background check using an Automated Fingerprint Identification System (AFIS).
To properly fill out the Live Scan Service Request Form RE 237, you must make 3 copies. One copy is kept by the Live Scan service provider, one copy is kept by you, and one copy is added to your real estate exam application.
That way, everyone has a copy and there is no confusion. The last thing you want in this application process is confusion!
As of August 2024, the original salesperson exam fee is $100 and the real estate license fee is $350. So, if you use RE Form 435, you should cut a check for $450.
But, if you want to know the total price, typically you can expect to pay $495 altogether. This is because the typical Live Scan service fee is $45. The final total price will come out a little higher if you include shipping fees.
Also, if you would like to reschedule your exam testing date, it will come at an additional cost of $45.
Once you applied for the real estate exam, all you have to do is wait for your application to get accepted. Once it is, you will be eligible to schedule your real estate exam date.
This step is simple and takes only a few minutes. When ready, the DRE will send you an email informing you that you can schedule your real estate exam date. Then, all you have to do is follow the instructions in the email to reserve your date.
We recommend doing this as soon as possible when you get the email notification. Everyone is eager to get their real estate license, so seats fill up fast.
After you send in your application, it takes around 2-months for the DRE to accept or reject your real estate exam application.
A good indicator of when the DRE is about to email you is when they withdraw the application fee from your bank account.
At that point, you can expect an email within the next week to two weeks.
When you schedule your testing date, you will notice that the DRE will give you a few location options for where you can take the real estate exam. These locations are:
Please arrive 30-minutes early to when your exam starts. That way you can take your time finding parking, collecting yourself, and to get comfortable.
Some people wonder if you can take the real estate exam online. Unfortunately, you cannot take the real estate exam online. It must be done at one of the approved locations throughout California.
Now that you have a date and location picked out, it’s time to pass the real estate exam.
Preparing for the real estate exam takes a lot of effort, but it can be done. The most important thing to remember is to not give up.
The California real estate exam has 150 questions with a time limit of 3 hours, as of August 2024. You must score a 70% or higher to pass the real estate exam.
The real estate exam will test you in the following categories:
According to the DRE, in July 2024, there were 4,599 examinations administered and only 1,305 licenses issued. If we were to take this at face value, this data implies that the California real estate exam has a 28% passing rate – yikes!
But, it's important to know that you can pass the exam and not be issued a license because you have not sent in your real estate license application. Historically, the passing rate is around 55%. Still a tough exam!
To make sure you pass the very first try, I recommend that you join our exam prep and real estate crash course program.
When you join, you will get access to our online student portal, which let's you use our unlimited customizable mock state exams, 1,000's of digital vocab flashcards, an eBook study guide, video explanations, and 2,000+ question & answer videos from our expert exam trainers.
Our crash course is a 2-day (8-hours per day) cram session taught by one of our expert exam trainers who will review the concepts, vocabulary, math, laws, and historical events on the California real estate exam.
This is the quickest, most affordable, and easy-to-use way to make studying and passing the exam easy.
There’s a lot to include in your real estate exam application. That’s why it’s important to keep a checklist when you’re assembling all the materials. By taking your time now, you can save yourself a headache and a lot of waiting in the future.
Best of luck studying! If you need additional studying help, remember that CA Realty Training is the #1 real estate school in California and offers crash courses and study prep to help you pass the real estate exam on your first attempt.
You may be asking yourself, “Why would I need to know how to do this?”
Well, there is valuable information that is linked to a real estate license number. If you are a consumer looking to work with an agent, it is important to know how to access this information.
First and foremost, you can make sure that the agent you’re about to work with is legitimate. There are other pertinent details that you can also find out about the agent simply by looking up their license number.
We’ll go more into detail in a moment.
First, let’s talk about where you can find the real estate license number.
Every agent receives a real estate license number when they are licensed and it’s issued by the Department of Real Estate.
Because the Department of Real Estate, also known as the DRE, wants to make sure that the information is easy to locate, you will find access to it right on the homepage.
You can look up a real estate license number in California by following the steps below:
Now that you know how to find the DRE license number, let's talk about the other pertinent information that you can learn about the agent or broker you are researching.
Of course, verifying that the agent is legitimate may be the initial reason you may be looking up an agent’s license number. Here is some of the other information that you will find on the Public License Information page:
Along with the license number you can also check the expiration date. While it’s important to verify that the agent can legally practice real estate, it’s just as important to make sure their license hasn’t lapsed.
If the agent is licensed and active you will see “LICENSED” under this area. Here are a few common real estate license status types you’ll find, although the DRE has even more listed on their website:
An agent holding a “Restricted License” is still allowed to practice real estate. Although, because the license is probationary, they are more at risk of it being revoked if another disciplinary action is filed.
Occasionally, an agent may have practiced under a different name before legally changing it. This can verify the validity of the agent.
All agents are required to “hang” their license with a brokerage. This confirms what office they are affiliated with. This does not apply to agents that have their broker licenses.
Another valuable piece of information that you can get from the DRE license number is disciplinary actions taken against the agent.
This is also found on the Public License Information page. It is listed as “Comment” and it is usually the last item on the page.
Agents are held to a Code of Ethics and standards by the Department of Real Estate. If an agent has broken any of these Ethics or basic rules and regulations, they can be subject to disciplinary actions.
If the agent is in good standing you will see it as:
Comment: NO DISCIPLINARY ACTION
There are many practicing real estate agents in the field. There is nothing wrong with doing some due diligence before you decide to enter into a legal contract with an agent.
When you are ready to work with a real estate professional, looking up their license number is a good start. This resource is an easy and convenient way to confirm that they are licensed and in good standing.
One of the requirements to get your real estate license is to attend and complete an accredited real estate school.
That’s where you learn important concepts, terminology, and practices to help you become an ethical real estate agent.
But, what exactly do you learn in a real estate school or pre-licensing program?
There’s a lot to unravel! But, first, let’s explore what a real estate school or pre-licensing program really is.
An accredited real estate school is a Department of Real Estate approved pre-licensing program. In the pre-licensing program, students are taught a curriculum that will make them eligible to take the real estate exam.
Each real estate school has its own curriculum that has been accredited by the Department of Real Estate. This curriculum is given to students to help them learn the material that is covered on the Real Estate Exam.
By completing the real estate school’s pre-licensing program, students will receive certificates, also known as proof of completion. These certificates are needed to qualify for the Real Estate Exam.
In California, students must complete 3 courses to get their salesperson license and complete 5 more courses to get their broker’s license.
So, now what should you expect to learn in a real estate school? In California, you can expect to take real estate practice, real estate principles, and one elective of your choice.
Real estate practice teaches you how to build a successful real estate practice. This means you can learn topics from disclosures to marketing to taxation. Along with this is a comprehensive understanding of ethical practices and upholding your integrity as a real estate agent. The course content includes:
Real estate principles will dive into the nitty-gritty of how real estate works. You can expect a lot of terminology in this course because you will learn about property types, ownerships, and escrow and title companies. The course content includes:
When you enroll in an accredited real estate school, you will take an elective course. So, how do you decide which elective to pick? Each one will focus on one subject that will help you in your career. That’s why you should pick an elective that you think will come in handy later in your career.
If you’re unsure what will be helpful later on, we recommend real estate finance. Money is a common concern with homebuyers and sellers. Real estate is the biggest investment that anyone will make, so understanding the finance side of the business will let you speak your client’s language and help you communicate your points in ways that make sense.
Lots of people ask whether or not real estate school is hard. The answer is: it depends. As long as you focus, take time out of your schedule to study and review, and attend class, you will find success in real estate school.
There are methods you can take to make real estate school easy. But, the most important part is to remember to take your time with studying. Some people want to breeze through the program, but that ends up hurting them more in the long run. Alternatively, some people won’t make time to review their notes, do the required reading, or focus in class. That, of course, will make it harder to learn the material.
The best course of action: when it’s time for real estate school, make sure you take time for it.
The real estate exam will cover everything you learned in your pre-licensing program. Each question will be specific to an area of study, so understanding how the concepts work will help you more than memorizing the concepts.
The real estate exam in California covers:
The majority of the concepts you will learn, if not all, will be in the two required courses. So, when you finish your pre-licensing program, make sure you review your notes to help yourself prepare!
Most people will have to enroll in an accredited real estate school to get their real estate license. But, you don’t have to enroll in a real estate school if you had an equivalent learning experience. Some college courses will satisfy the educational requirement.
So, if you believe your college courses have fulfilled your educational requirement, contact the Department of Real Estate to confirm. This could save you some time and money when you get your real estate license.
You will learn a lot when you enroll in a real estate school. There’s no way around it. It might seem intimidating at first, but when you take your time to learn how the concepts work, that’s when you succeed.
Most people will want to memorize terminology or concepts, but that will only get you so far. When you take the time to learn and understand, you can recall information much better and outsmart the real estate exam.
Also, remember that not every real estate school goes the distance that CA Realty Training does. They will teach you the required material only and stop there. CA Realty Training will not just give you the required material, but train you for a successful future as a real estate agent. We will show you how to synthesis what you learn by putting it into practice.
If you’re curious about our program, you can try it for free, from anywhere in the world. Attend a free intro training and see how it works yourself.
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 $60 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 $245. 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.
The California Association of Realtors® (CAR) is a nonprofit association that helps develop programs and services to enhance a member's business ability through competency and integrity.
To join, you must be working under a broker that is a REALTOR® member. Yearly dues are just under $184, but there are additional fees associated with the application, including your national membership dues, and other related expenses, including new member fees
Being a member of the National Association of Realtors® (NAR) is a nonprofit organization that gives agents the chance to build their expertise and reputation as ethical real estate professionals.
As a member of NAR, you enjoy member benefits such as continuing education opportunities and discounts. To be a NAR member, you must first join your state or local association of Realtors®. The cost to be a member of NAR is $150.
According to Indeed, 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 more accessible and affordable than you think. With a little bit of schooling most people can become an agent within 6 months. Not only that, but a career in real estate requires less start up costs than other careers.
But is a real estate agent's job hard?
In this article, we’ll show how hard it is to become a real estate agent and whether or not this is a challenging career.
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 amount of hours changes from state to state. Usually students are expected to complete 100-200 hours of pre-licensing education. Some states require additional education after getting a license.
The quickest way is through an online program, which lets you take the courses on your own time, not dependent on other schedules.
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.
The real estate exam is tricky, and the questions are designed to trip you up. Between 2023 and 2024, around 50-60% of the people who take the exam passed.
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 exam changes from state to state, you can expect the it to be around 2-3 hours long with 150-200 questions. To pass the exam, applicants must score a 70% or above.
How hard is to be a real estate agent? If like me, you’ve watched Selling Sunset, Selling the OC, Owning Manhattan, or one of the seemingly hundreds of real estate reality shows, you might have a skewed idea of how difficult this career is. Let me explain.
These are flashy, luxury and commercial agents who work with high profile clients. They represent a very… very small portion of all agents. It’s not impossible to get to their status, but it is uncommon. Most agents will make around $60-110k a year.
This happens when you establish yourself as an agent. Let’s explore how hard this is:
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.
To become a real estate agent, one must first get their real estate license. That's great!
But, what even is a real estate license?
This post will tell you exactly what a license for real estate is and how you can get one.
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 is 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 is $800,000, up 16.1% compared to last year.
According to Realtor.com, San Diego County is a seller's real estate market right now, which means more buyers than active listings.
If you've been thinking about obtaining your San Diego real estate license, there has never been a better time than right now, as these trends should continue in 2022.
To become a real estate agent in San Diego, you'll need to get your California real estate license. The licensing process is relatively easy, affordable, and well worth the time, effort, and expense, especially considering the opportunity to build a lucrative career in the San Diego real estate market.
This article will explain, in detail, the steps you will need to take to obtain a San Diego real estate license.
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 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. 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 up to six weeks to process. So, you can save two and four weeks on the entire process by applying for both simultaneously.
According to Indeed.com, the median yearly salary of a San Diego real estate agent is $94,776.
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 ($800,000), 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 $725,000, which slightly lower than the median home price in San Diego ($800,000).
Also, indeed notes that the median salary for an agent in California is $99,550, 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 it comes to buying and selling your own property.
But what if you don’t want to work with another agent and instead, are looking to represent yourself in a real estate transaction? While it is often legally allowed, if you’re considering getting a real estate license so you can buy and sell a property without working with another agent, there are some things to understand first.
The simple answer is yes – as a licensed agent, you can represent yourself in buying or selling real estate for yourself, so long as you disclose that you representing yourself upfront in the deal. But it’s not as easy as just getting your real estate license!
Just having a license is not enough to buy or sell your own property – you have to make sure you also are affiliated with a brokerage. To begin that process, you need to find a local real estate company, interview with them, and subsequently, get hired to hang your license there. Keep in mind that a brokerage will often take a percentage of the commission you receive in exchange for being affiliated with them.
If you’re planning to represent yourself, it’s important to look into each state’s legal requirements around buying and selling your own real estate as a licensed agent. Almost every state has laws that require agents to disclose their role and relationship to the property if they are planning to purchase it for themselves. Ensure that you fully understand what laws are in place so you can avoid any legal trouble during the process.
Despite the logistics and legal requirements, there are certainly benefits to representing yourself when buying or selling real estate.
Buyer’s agents generally split a 6% commission with a seller’s agent. When acting as your own buyer’s agent though, that 3% commission would go directly to you, resulting in potentially thousands of dollars back in your pocket instead of another agent.
Keep in mind that by being associated with a brokerage, you will have to split your 3% with the commission based on the agreed split and also finance brokerage related fees.
Another benefit to representing yourself is cutting out the middleman to guarantee you have full control over the transaction.
Generally, the paperwork, listing appointments, negotiating and more would funnel through your buyer’s agent.
But by representing yourself, you can directly communicate and coordinate without relying on another agent who might be juggling multiple clients. Handling this on your own can be valuable if you are an effective communicator, and comfortable with the process.
Even if you qualify to handle your own transaction, it’s not as simple as having a real estate license. Here are key factors to keep in mind:
Your real estate knowledge and familiarity with the market play a huge role in a successful transaction.
If you're new to the industry, consider partnering with a more experienced agent. By splitting a 3% commission, you can learn from them while still earning—preparing yourself for future transactions.
Even if you’re a licensed agent, buying or selling in an unfamiliar area can be risky.
If you're purchasing in a new market, working with a knowledgeable agent can help you make informed decisions and avoid costly mistakes.
Buying a home is one of the largest financial investments you can make, and emotions often play a role in the process.
Even if you have real estate experience, working with another agent might still be beneficial. An outside perspective can prevent emotional attachment from influencing pricing, negotiations, or the overall transaction.
There are certainly pros and cons to getting your real estate license with the sole purpose of buying or selling your own property. Aside from saving money, you can also grow your network and potentially discover a new career path.
If you’re ready to make the time and money investment into getting your license, consider how this will benefit you not only right now, but also in the future. Once you’re licensed and affiliated with a brokerage, you’re able to represent yourself, but also you can assist family and friends when they’re ready to buy or sell a property.
One thing to remember is that there are fees associated with keeping your license active. Unless you’re generating a regular influx of commission annually, having your license may be costing you more than it’s worth. If you’re going to go through the process of studying and passing the licensure exam, consider whether you want to explore this as a new career path!
Representing yourself in a real estate transaction can be a great opportunity to save money and take control of the transaction. If you’re considering getting your real estate license for this purpose, understand that while there are many benefits, it’s important to invest the time and energy to ensure you are properly educated and prepared for the transaction.
With the right experience and mindset, representing yourself in the real estate process is a rewarding way to utilize a skillset and potentially discover a new career path!
An easy way to remember critical concepts on the exam is with real estate acronyms. These are short, brief words that reminds you how a concept works.
The most important acronyms to know for the real estate exam are:
This article reviews acronyms that will help you during the exam. These are useful tricks and tips that you deploy whenever you need it. With that said, let's jump in.
U.P.T.E.E. is an acronym that you can use to remember the five rights associated with a buyer’s bundle of rights:
The term “bundle of rights” refers to a set of legal privileges (U.P.T.E.E.) afforded to a buyer, which comes with the transfer of title.
To have value, a property must possess four essential characteristics:
These characteristics need to be present for a property to have value, but they are also used to determine that value.
Since most people fund investments through mortgage financing and because most buyers borrow money to purchase property, lenders want to know what the property is worth before they loan money to the buyer.
M.A.R.I.A is a real estate acronym used to remember the elements that determine if something is a fixture:
When a person vacates a property, their personal property goes with them, and the real property that goes with the real estate is left behind.
A fixture is a term used to define a personal property that later becomes real property. It may have once been associated with the owner (personal property), but it is now part of the real estate transfer because of its association with the property.
A great example would be a hanging chandelier or a toilet.
P.I.T.T. refers to the four factors used to determine joint tenancy:
Joint tenancy is a type of ownership in which more than one individual enters into an ownership agreement through a property deed.
The parties involved in the joint tenancy may be relatives, friends, or business associates.
You can remember a real estate agent’s fiduciary duties using the O.L.D.C.A.R. acronym:
Agents are expected to follow a set of ethical rules, also known as fiduciary duties. They are outlined in the OLD CAR acronym.
That may involve disclosing all material facts to a client, including bringing all offers to that client and refraining from dual representation in a single transaction, among other things.
P.E.T.E. is a real estate acronym you can use to remember the four powers government has over property:
The four central government powers outlined in the P.E.T.E acronym allow the government to control certain aspects of real estate, including how structures are built and where and the government’s ability to levy taxes on a property.
This one comes in handy when you're answering questions about townships. On the real estate exam, you will need to know how many square feet are in an acre. The answer: 43,560 sq ft.
Here's an easy way to remember it: 4 old ladies driving 35 mph in a 60 mph zone. This paints a funny image in your head or maybe it's so corny that you'll remember it?
Either way, this a helpful way to remember how many sq ft are in an acre.
The yearly interest rate plus other charges such as points, origination fees, underwriting fees, and broker fees.
A database established by cooperating real estate brokers to provide data about properties for sale.
A financial term used by lenders to express the ratio of a loan to the value of an asset purchased.
Real estate term for a property that is being sold directly by the owner.
A mortgage with an interest rate that changes over time.
The components of a typical mortgage payment.
A U.S. government department that administers federal housing and urban development programs.
Property owned by a lender, typically a bank, after an unsuccessful sale at a foreclosure auction.
An estimate of a property's value compared with similar properties.
A government agency that provides mortgage insurance on loans.
A loan in which the lender agrees to lend a maximum amount within an agreed period.
Insurance that protects the lender if the homeowner defaults on a loan.
A deposit made to a seller showing the buyer's good faith in a transaction.
An organization in a subdivision, planned community, or condominium that makes and enforces rules for the properties in its jurisdiction.
The date when a property transaction is considered officially completed.
An estimated value of a property as determined by a real estate broker or other qualified individual.
A personal finance measure that compares an individual’s debt payment to their overall income.
A mortgage with a fixed interest rate for the entire term of the loan.
A national organization of real estate sales agents.
A measure used to evaluate the efficiency of an investment.
When it comes to preparing for the real estate exam, acronyms can be extremely useful in helping you to remember key concepts that you will need to learn in order to pass your exam.
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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.
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 Statista, the United States is home to a massive mortgage market, valued at $11.9 trillion in 2021.
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 75% of all home buyers financed their home purchase in 2021. 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:
The mortgage investors ultimately keep the market going as they provide funds and the lenders’ guidelines.
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.
The Federal Reserve also plays an essential role in mortgage rates. While the Fed does not set mortgage rates, they set short-term interest rates based on economic forces.
Because mortgage rates fluctuate based on these same forces, Fed rates and mortgage rates typically move in tandem.
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 offers a lot in the way of prime property and is definitely one of the top areas of attraction real estate-wise. Now, you would expect that given such a back story, property taxes would be through the roof.
You would be wrong. California home/property owners pay way below the national average.
So, how do property taxes work in California?
Your tax is determined using the purchase price of the property since the purchase price usually equates to the assessed value. From here on out, your assessed value sees an increase annually based on the inflation rate.
The inflation rate comes from changes in the California Consumer Price Index.
In simple terms, property taxes are government-imposed levies on real estate ownership. Taxes are mainly levied at state, county, and local levels. By way of some ancient history, property tax has been for the longest time and can be traced back to the 6th century B.C.
In the U.S., property taxes were levied even prior to income tax. All states, as well as Washington D.C., levy a property tax while certain states do not even levy an income tax.
Owning real property in California implies that you would mandatorily have to pay real property taxes. It really doesn’t matter if you own rental property or if you got the property as a gift, you would pay property tax all the same.
Similarly, payment of property tax isn’t designated by property price. In other words, whether you have a $60,000 or a $6,000,000 property, you would still pay based on the respective home values.
There is a possibility that you purchase property mid-year, and when this happens, your real estate agent would likely negotiate to split the real property tax payment for that calendar year with the seller.
To confirm whether this is the arrangement made, review your mortgage interest statement.
Use our free calculator to find out how much taxes are paid on a property.
Assessment of property and calculation of property tax is determined by California's Proposition 13, passed in 1978. The basic principle for calculating is that you multiply the tax assessed value of your property by the tax rate.
Example: If you buy a home for $500,000, your property tax will be approximately $5,000 per year (1%). The assessed value can only increase by a maximum of 2% annually, barring significant property changes.
Tax day comes around pretty fast and if you’re not careful, it might meet you unprepared. In addition to filing your income taxes, you should keep an eye on your property taxes too. The State of California’s fiscal year begins on July 1st and runs through to June 30th.
Property taxes are assessed and collected by the county your home is located in.
First off, it is essential to remember that there are two installments due, as well as recall the date of these installments.
The first installment runs from July 1st through December 31st and tax payment is slated for November 1st, and only becomes delinquent on December 10th. Failure to make a payment by 5 p.m. on the delinquent date attracts a penalty of 10%.
The second installment is due by 1st February and becomes delinquent on 10th April. To recall, just have the mnemonic “No Darn Fooling Around” (representing the first letter of each month) ringing in your head and you would remember for sure!
Remember that failure to pay property taxes as at when due see your penalties rising consistently.
If you pay your property taxes alongside your mortgage, you would not have any unpaid balance by November 1.
Now, this is a question that many property owners ask. What happens to all the property taxes that you pay? Well, your property tax is what keeps the state and local governments functioning. They comprise a bulk of the revenue that goes into funding public safety, infrastructure, public schools, as well as the county government.
Particularly for public schools, it is easy to find that the best public schools are located in municipalities that have highly-priced homes and as a result, significant property taxes.
County projects are funded by some states, while others leave the counties to carry out the levying and tax use without interfering. This implies that the county has only property taxes as its source of funding.
Here’s a summary of public services that your tax dollars go towards funding:
You've probably heard the terms property taxes and real estate taxes used multiple times, and you're wondering if there's a difference?
Well, the key difference between property taxes and real estate taxes is that there is no difference. They are identical and used interchangeably. So, next time you hear these terms being used within the same frame of conversation, you know that it's pretty much the same.
Property taxes are necessary for running the county and state by extension, and this is why they are so important. You can easily calculate your property tax ahead of time and now you know exactly where these funds go. And if you ever forget the dates, remember, No Darn Fooling Around!
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.
Before you become a real estate agent in Florida, you have to apply for the Florida state exam.
Only after you pass the exam will you be rewarded your real estate license.
So, how do you apply to the Florida real estate exam?
This article is your guide on what you need to do to apply for the exam and which forms to include in your application.
Let's show you everything you need to know about your application.
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, you have to score at least 70% in the Florida real estate exam. If you fail the test on the first trial, you will be allowed to take a second attempt the test within 30 days and 1 year after the original test.
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.
The real estate market in Georgia is nothing short of a booming one. To work in this market as a real estate agent, you need to pass the Georgia real estate exam.
There are certain eligibility requirements to take the exam: you have to be at least 18 years old, complete pre-license coursework, complete a background check, and finally, apply for the exam.
In this article, we will consider all the steps you need to apply to the Georgia real estate exam.
We will also take a look at a few other tips you should consider ahead of the exam. If you are looking to apply for the Georgia real estate exam, this article covers everything you need to know.
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.
When applying for the Georgia real estate exam, there are some necessary documents that must be included in your exam application:
Keep in mind that cash, company checks, and personal checks are not accepted, so avoid including them in your application.
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 have to answer at least 75 out of 100 questions right. 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.
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