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Why You Should Get Licensed in Multiple States

For some agents, getting licensed in more than one state makes perfect sense. Agents who work in Kansas City or St. Louis, Missouri may often find themselves crossing state lines into Kansas or Illinois on a daily basis, for example. But if you’re miles from the state line, does it still make sense to hold a Real Estate Salesperson license in more than one state? Here are some things to consider.

Important note: You should consult legal counsel before becoming involved in a transaction in another state. Failure to observe the law may result in loss of commission or even jeopardize your license. The following guide is for informational purposes only and is not meant to be taken as legal advice.

You Might Get More Than Expected

While many states license their real estate agents on an individual state basis, many states allow for licensing reciprocity, meaning that while you have to apply for that state’s license (and usually take the state test), you won’t have to retake the coursework.

Other states have what is called portability, meaning that you can work as an agent in their state to some extent, but this can vary from requiring you to have a co-brokerage agreement with a broker licensed in that state (Cooperative States) to only allowing you to remotely help your client while you’re located in the state you’re licensed in (Physical Location States). Having more state licenses opens up more states you are able to work in.

It Frees You Up to Move

Being licensed in multiple states gives you more freedom to move yourself. Sure, if you decide to make a planned move you can always choose a state with reciprocity or pay to go through the licensing process in your new state, but that can cost both time and money. This can be especially useful for practicing real estate professionals who have seasonal homes where they live in one area for 4-6 months and another for the rest of the year. Rather than taking a hiatus from real estate (and the income it provides), being licensed in both states allows you to continue working while living the lifestyle you want in the location of your choice.

You Can Work in Turf States

There are four US states that do not allow out of state agents or brokers to conduct any business in their state either in person or remotely. These include Nebraska, New Jersey, Pennsylvania, and Utah. The only way to work with a client in these states is to refer them to an agent/broker who is licensed in that state or to be licensed there yourself.

Things to Consider

Nothing about being licensed to practice real estate in another state prepares you for paying income tax in another state. As an independent business owner, you already know how important a good tax professional is, so you’ll want to consult a knowledgeable professional before you get started to save yourself future headaches.

Some states have more reciprocity than others. California does not allow licensed agents from any other state to apply for a California real estate license without completing California coursework, but Colorado is the opposite by allowing reciprocity for an agent from any US state to apply. Some states allow just neighbors, while others have scattered reciprocity states through the country.

Real estate is a great career path for those looking to create their own opportunities and set their own schedules and being licensed in multiple states can help to further that goal.

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