Real estate reciprocity: should I do it?

Let's talk real estate reciprocity.

Getting a real estate license is a different process for each state. Some states recognize real estate license reciprocity. It’s known as mutual recognition and is an agreement between states that allows you to get a license in another state usually by taking the reciprocal state’s exam. Kentucky has reciprocal agreements with Ohio and Tennessee. Missouri recognizes all states for reciprocity. These agreements provide for taxpayers to be taxed by their state of residence, and not the state where income is earned. When you have a dual license, you must pay double fees for each state. You have double post-licensing courses and continuing education requirements.

Now that we know what reciprocity is, we need to determine when it’s a good choice to have a dual real estate license. People that live on a state border, travel for business in another state or have family in a state near them should consider getting dual-licensed. The rule of thumb is if you can close one or two deals each year then it’s worth it for you to carry the extra fees. If you are in a bordering state, then it’s possible to have different real estate brokers hold your license for each state. You can also have one hold both, but they must have their broker’s license in each state where you are practicing real estate.

The perk of reciprocity agreements are that you don’t have to start the entire education and licensing process from scratch to obtain your license in another state. You just take the national portion of the real estate license process and just skip to the state-specific laws and regulations. Once you pass a reciprocal course, you can sit for the state exam and just take the state-specific portion of the exam. The next steps are just like any licensing process, you need to pass the exam and send in your application to the real estate commission. Then, you get signed up with a broker.

Now that you are licensed in two states instead of one, you need to know how to leverage this opportunity. First, you want to make sure that every agent in your office is aware that you have your license in another state. If they run into clients or business that needs to be taken care of in a state where they don’t hold a license, they will know that you are a resource. Let them know what kind of referral fee you are willing to accept and give them your contact information.

If you have a lot of family or friends in another state, make sure that they are receiving regular contacts from you so that you are top of mind whenever they have any real estate-related needs. At the end of the day, you are opening yourself up to be able to serve more people in more markets. If you have time and energy or are on the border of two states, go for it. You can always put one of the licenses back in escrow if it’s too much.

For more specific step-by-step instructions on how to obtain your Kentucky Reciprocity Real Estate Sale License click here. If you would like to sign up for the number one Kentucky Reciprocity course statewide click here to enroll.

To find out more information on how to obtain your Missouri Reciprocity Real Estate Sales License click here. If you would like to sign up for Missouri Reciprocal courses click here.