Considering moving out of state? Or want to help clients in other states? What does that mean for your broker or agent license? Can you transfer it to other states? And if so, which ones? Many states offer some level of license reciprocity or portability, but each state is different. For example, Virginia offers full reciprocity, whereas Vermont has none. This article will help you understand which states offer reciprocity, along with how much work you’ll need to put in to transfer your license across to other states.
What is Real Estate License Reciprocity?
Real estate license reciprocity is an agreement between states that allows real estate agents licensed in one state to become licensed in reciprocal states. In some cases, you only have to pass the reciprocal state’s portion of the real estate exam; e.g. if you’re based in any US state and wish to practice in Alabama. In other cases, you have to retake and pass the complete real estate exam; e.g. if you wanted to practice in Arizona.
What is Real Estate License Portability?
Real estate license portability governs how out-of-state agents or brokers may or may not conduct business in another state. There are three types of real estate license portability:
1. Cooperative State
A cooperative state allows out-of-state agents or brokers to enter their state to conduct real estate business in-person. However, out-of-state agents must have a co-brokerage agreement with a licensee of the cooperative state.
2. Physical Location State
A physical location state allows out-of-state agents or brokers to conduct real estate business in their state, but they must do so remotely. For example, you could negotiate and submit offers on behalf of your clients, as long as you stay in your current licensed location.
3. Turf State
A turf state does not allow out-of-state agents or brokers to conduct any business in their state, either in-person or remotely. In this situation, you can only refer your clients to a licensee of the turf state. There are six turf states: Kentucky, Missouri, Nebraska, New Jersey, Pennsylvania, and Utah.
State-Level Real Estate License Reciprocity
Each state has its own real estate laws and licensing requirements, including reciprocity agreements. Here’s where each one stands:
Full License Reciprocity
Some states offer full license reciprocity, which means you may only have to pass the new state exams rather than starting over again. However, there are a couple of conditions:
- You must have an active real estate license in your current state.
- You must be of “good standing” in your current state; i.e. there are no questions or concerns about your business practices and ethical standards.
The five states with full license reciprocity are:
No License Reciprocity
Some states don’t offer any license reciprocity, which means you’ll have to retake your real estate exams and get licensed again. The seventeen states with no license reciprocity are:
- New Jersey
- New Mexico
- South Dakota
Partial License Reciprocity
The remaining twenty-eight states offer what’s known as partial license reciprocity, which means they may offer license reciprocity for real estate agents from some states, but not all of them. For instance, some offer it to neighboring states, while some offer it to states with similar laws.