What is Real Estate Reciprocity?
How to Take Advantage of Real Estate License Reciprocity
How to Take Advantage of Real Estate License Reciprocity
Jacqueline Kyo Thomas
Are you planning to move to another state? Or would you simply like to expand your real estate business beyond your current borders? We have good news for you. You may be able to take advantage of an interstate agreement known as real estate reciprocity.
In this guide, we’ll share what real estate reciprocity can mean for the future success of your real estate business. Let’s get started.
Real estate license reciprocity gives agents the ability to work in multiple states without the need to take multiple real estate state licensure exams.
Every state has different rules regarding real estate reciprocity. It can be confusing to sort through all of the real estate license reciprocity laws, so we'll narrow in on Massachusetts because that's our specialty. However, we will also take a broader look at real estate reciprocity as a whole, just to give you a better understanding.
In Massachusetts, the state's Board of Registration of Real Estate Brokers and Salesmen can issue licenses to individuals who have previously received their real estate broker or salesperson license from a different state or jurisdiction. Such individuals are not required to take additional state-specific education and they won't need to sit for another real estate exam. Instead, they are able to bypass the typical requirements and apply for a reciprocal license.
Massachusetts is a state that offers partial real estate reciprocity. This means that your original license must be from a state that is included in Massachusetts' reciprocity agreement. Those 11 states include:
Massachusetts also has limited reciprocity with the following four states:
For a detailed list of all of the states that have a real estate license reciprocity agreement with Massachusetts, check out this list.
You may be wondering why Massachusetts doesn’t have real estate license reciprocity agreements with every state in the country.
Real estate laws vary, sometimes quite dramatically, from state to state. The Massachusetts Board has selected the above states for reciprocity due to their state's similarity to the real estate laws in Massachusetts. Because the states in the reciprocity agreement have similar guidelines, you can feel confident to draw from the real estate education you received in one state to do your business in another.
While it’s a rewarding experience, taking a real estate exam doesn’t usually make for a fun day out. Test taking is one of those experiences that you probably only want to do once, if you can manage it.
This is the number one reason why real estate reciprocity is such a game-changer. Instead of having to take a very similar exam over again once you move to a new destination, the state of Massachusetts recognizes what you've already done in another state.
Here are two of the major benefits you will receive by taking advantage of real estate reciprocity:
Reduce Stress - Even though you already know most of it, you probably haven't retained all of it. If you move to a new state and that state requires you to sit for another exam, you’ll definitely need to study just to brush up on facts you’ve forgotten. That's stressful because you already know how to sell real estate.
Save Time - If you’ve already taken the real estate exam, you can save time by taking advantage of a real estate reciprocity agreement. You won't need to study or sit for another exam. Instead, you’ll bypass the typical requirements and simply apply with the necessary fees.
Taking advantage of real estate reciprocity isn't a one-size-fits-all process because requirements change from state to state. We're focusing in on Massachusetts, but keep in mind that these requirements do vary based on the state that you're moving from. Let's break it down based on the state that you originally received your license from:
Colorado, Georgia, Iowa, Mississippi, Nebraska, New Mexico, Oklahoma, Pennsylvania, Rhode Island, Tennessee, West Virginia - If you were originally licensed as a real estate agent in any of the above states, you must remit a Certified Record of License History from your state's real estate commission. This record should include your current license along with a cover letter that shows your name, address, and date of birth. You should also be prepared to pay a non-refundable application fee of $31 for salespersons or $52 for brokers.
For salespersons and brokers licensed in Oklahoma, you must have retained your license for a minimum of two years to have complete reciprocity.
Maine, Nevada, New Hampshire - In addition to applying for an educational waiver, you must take the Massachusetts state portion of the exam. However, you are not required to complete the Massachusetts pre-licensure education. You will also need to remit a Certified Record of License History that shows your current license and a cover letter with your name, mailing address, and request for an educational waiver. Waivers are good for two years.
New York - You must be a licensed broker in the state of New York to apply for complete reciprocity. As an applicant, you must remit a Certified Record of License History from your state's real estate commission. This record should include your current license along with a cover letter that shows your name, address, and date of birth. You should also be prepared to pay a non-refundable application fee of $52.
For more information, check out this post: Massachusetts Real Estate License Reciprocity.
Real estate license portability is different from real estate license reciprocity.
Real estate license portability refers to how the state deals with out-of-state agents or brokers who want to do real estate business within the state.
Portability laws affect agents who may wish to help a client who wishes to sell or purchase property in a different state. In this scenario, the agent may not want to obtain a real estate license for a new state because they have limited business dealings. Instead, they may only want the option to work on a one-off basis. Fortunately, for many of these scenarios, real estate licenses can be portable.
There are three types of real estate license portability:
Cooperative - For states that have a cooperative real estate portability agreement, an agent who is licensed in one state can do business in another state without payment restriction. That said, the agent will need to co-broker the transaction with an agent who has a license in the state.
Physical Location - States that have a physical location real estate portability agreement allow agents who are licensed in a different state to represent clients for real estate transactions. However, the agent is not allowed to work physically with the client. Instead, they must conduct the transaction remotely. Massachusetts is a physical location state. If you don't have a Massachusetts real estate license but want to take advantage of the real estate portability law, you are able to help clients buy or sell in Massachusetts but you must do so remotely.
Turf - Turf states do not allow any out-of-state agent or broker to do real estate business in their state. This includes both in-person transactions and remote transactions. In these states, you must refer a client who wishes to buy or sell to a real estate agent who's licensed in the turf state.
If you're hoping to bring your real estate business to another state, take advantage of real estate license reciprocity. It's a great way to get up and running in a new state without having to sit for another exam.
Check out these additional links before you go: - Additional Information on Applying For a Reciprocal Broker's and Salesperson's License - Massachusetts Real Estate Board: Reciprocal Licensure, Attorney Licensure And Educational Waivers