The 10 Steps to Becoming a Real Estate Agent (and the Costs)

Step 1: Meet the basic requirements to become a real estate agent

All applicants must:

• Be 18 years of age;
• Have attained a high school diploma or GED;
• Education documentation requirements:
  • When you apply for your license, you will need a copy of your high school diploma, GED, high school transcript, or a copy of a college degree or transcript from a college or university showing completion of at least twenty (28) credit hours. Information printed from a website is not considered acceptable proof.⁴
  • If diploma or transcript is in a language other than English, it must be an official transcript. This documentation must be accurately translated and include a certification stating that the translation is true, accurate, and complete. The applicant must also submit a letter to the commission indicating that the curriculum of the proffered education is equivalent to a high school diploma or GED. This comparison shall be made by an education credential service provider with membership in the National Association of Credential Evaluation Services: www.naces.org.
• Completed all real estate pre-license courses prior to taking the real estate examination; (See Step 2)
• Have completed either six (6) credit hours in real estate courses from an accredited college or ninety-six (96) classroom hours in real estate classes from an approved proprietary school.⁵
• Completed FBI criminal background check; (See Step 3)
• Take and pass the Kentucky Sales Associate exam; (See Step 4)
• Must apply within sixty (60) days of passing their exam; (See Step 7)

Reference: KREC New Application Overview
https://krec.ky.gov/newstatic_info.aspx?static_id=201

Step 2: Complete real estate pre-license courses ($199+)

Applicants for the Sales Associate License must:

Have completed either six (6) credit hours in real estate courses from an accredited college or ninety-six (96) classroom hours in real estate classes from an approved proprietary school.⁶

The fastest way to complete the pre-licensing educational requirement is to complete a pre-licensing course.

Approved Pre-License Providers in Kentucky:
https://oop.ky.gov/education.aspx

The course will teach you real estate principles (terms like “lien,” “escrow,” and “encumbrance”), real estate practices (like how to determine a property’s value), and the legal aspects of the business.

Pre-licensing courses can be taken in person or online, so consider your learning habits before deciding where to enroll.

Most pre-licensing courses provide students with sample tests, and many real estate commissions publish sample questions online.⁷

Step 3: Request FBI Criminal Background Check ($18 – $51.25)

The FBI report must be requested prior to taking the licensure exam and active when you take the exam. Failure to do so will result in the exam being voided and you will have to retake the exam.

• All FBI reports expire 90 days from the date of issuance.
• Individual must have a social security number or Alien Registration Number. An ITIN will not allow the person to complete the FBI criminal background check.
• The license cannot be issued without the FBI report.⁸

Reference: National Criminal History Checks (Background Checks)
https://krec.ky.gov/newstatic_info.aspx?static_id=209

FAQs for Applicants:
https://krec.ky.gov/

Step 4: Take the licensing exam ($100)

The Kentucky Real Estate Commission has contracted with PSI Services LLC (PSI) to conduct the examination testing. PSI provides examinations through a network of computer examination centers. PSI works closely with the State to be certain that examinations meet local as well as national requirements in basic principles and examination development standards.⁹

Contact PSI to register for an examination: http://www.psiexams.com/ or 800-733-9267

Lexington Testing Centers:¹⁰ (Subject to change)

Louisville Testing Centers:¹⁰ (Subject to change)

The exam is divided into two portions: National and State.¹¹

• The National portion consists of 80 questions covering real estate laws and general real estate principles.
• The State portion consists of 40 questions.
• These multiple-choice questions include math questions that require you to use a calculator (e.g., prorating taxes for a specific property). The testing site allows candidates to bring/use “non-programmable calculators that are silent, battery-operated, do not have paper tape printing capabilities, and do not have a keyboard containing the alphabet.”¹²

Reference: Candidate Testing Information
https://krec.ky.gov/newstatic_info.aspx?static_id=205

Many people don’t pass their real estate license exam the first time around. In general, though, about 69 percent of people pass the national portion of the exam the first time, and only 51 percent pass the state section on their first try.¹³

Beginning JULY 1, 2015, candidates who pass one portion of the exam (national or state law) and fail the other portion may retake the failed portion within four (4) months of passing the first portion. After four (4) months of the initial testing date, both portions must be retaken.¹⁴

Step 5: Join a brokerage (cough, CENTURY 21 Simpson & Associates!) (No cost)

In order to legally practice real estate, you must work under a supervising broker. Brokers are licensed by the state to oversee real estate transactions and ensure that real estate salespeople (that’s you!) are adhering to the required legal and ethical standards.

Don’t expect to waltz in and collect an hourly salary: Most brokerages pay their agents only by commission. In other words, you get paid only when you complete a transaction, and you won’t receive benefits. Due to this pay structure, brokerages are typically eager to welcome new agents, since it comes at no cost to the company. So be sure to find a brokerage you like, one that is open to taking you on so you can receive some on-the-job training.¹⁵

Why CENTURY 21?   Kantar Group Limited Study

Why CENTURY 21 Simpson & Associates?

We are a low drama, family real estate agency. We opened in 1985 and joined CENTURY 21 in 1992. We’ve won the prestigious CENTURY 21 Quality Service Award each year since 1993. Ask us about our many other accomplishments that make us one of the top CENTURY 21 companies in the Kentucky. We have a competitive commission structure and offer the following without extra fees:

Step 6: Errors and Omissions (E&O) Insurance ($160+)

Errors and omissions insurance, E&O for short, is the name used to describe a type of malpractice insurance coverage for real estate professionals.

When you have E&O insurance coverage, the insurance company defends the claim and pays any settlement or judgment against you up to the limits of liability stated in the policy. The coverage protects real estate professionals against financial losses from lawsuits filed as a result of their work in the real estate profession.¹⁶

Talk to your Broker about E&O coverage. While the Kentucky Real Estate Commission (KREC) contracts each year with an insurance provider for a group policy, your broker may provide coverage through a private carrier.

E&O: Kentucky Real Estate Commission’s Group Policy
http://www.risceo.com/states/kentucky-2/

E&O FAQ:
http://www.risceo.com/resources/faq/

Step 7: Activate your license ($130 – 2-year period)

To activate your license, compile all the documentation from the previous steps and mail them with the application fee to the Kentucky Real Estate Commission. Note that your application will be provided to you at the testing center immediately after successfully completing your licensing exam.

Step 8: Consider becoming a REALTOR®

In order to become a full-fledged Realtor—a licensed agent with the ability to use that widely respected title—you need to be a member of the National Association of REALTORS®. No exceptions. So what’s the advantage?

Membership in the NAR offers a number of benefits, including access to real estate market data, discounts on education courses, and transaction management services. And being able to use REALTOR® on your business card and your marketing materials also adds credibility.¹⁷

NOTE: Bluegrass REALTORS® membership includes National Association of REALTORS® membership. (See Step 9)

Step 9: Join a Multiple Listing Service ($3072 – prorated & split*)

Membership in your local MLS is essential since you must use the system to list properties, which are then dispersed to websites like realtor.com®, zillow.com, and trulia.com. The service also enables you to easily pull a property’s tax information, analyze market trends, and see listings before they go on the market.

Bluegrass REALTORS® is the second largest local real estate associations in the state serving 30 counties and remains one of the largest and most influential associations in the Central and Southern Kentucky area.

Visit https://www.lbar.com/pages/become-a-member/ to apply for REALTOR® membership.

*The initial fee is prorated based on the month joined. See dues proration guide for exact amounts (subject to change):

https://www.bluegrassrealtors.com/clientuploads/Join_Bluegrass_REALTORS_Information/2025_Dues_Chart_PDF.pdf

Most of these fees are tax deductible. 35% of your National Association of REALTORS® (NAR) dues and a percentage of your Kentucky Association of REALTORS® (KAR) dues go for lobbying and are not tax deductible.¹⁸

Bluegrass REALTORS® Onboarding Requirements:

Applicant must complete the Association Orientation Program within 180 days after making application for membership in the Association. Any exception to this rule must be approved by the Board of Directors. If the applicant fails to take the courses within the prescribed time limit, all services of the Association will be suspended until such requirements are satisfied.¹⁹

Step 10: Complete required continuing education (Free and Paid options)

Post-License Education Overview²⁰

• On March 30, 2015, HB 149 became law. Under this law, post-license education is now required in Kentucky. Pursuant to this law, post-license education in Kentucky will require new sales associate licensees to complete forty-eight (48) hours of post-license education courses within two (2) years of obtaining a real estate license. The law is codified in KRS 324.085 and goes into effect on January 1, 2016.

As a benefit of membership, Bluegrass REALTORS® offers its members unlimited educational courses.²¹

Learn more about Kentucky Real Estate Commission Continuing Education:
KREC YouTube video (3:07)  https://youtu.be/gd8BlR_eqto

The 48 Hours Post-License course curriculum consists of 32 Mandatory hours and 16 Elective hours. The Mandatory hours must cover the following topics as listed below:

References