What Do Real Estate License Reciprocity & Portability Mean?


Do you have a real estate license and want to move to another state? Or maybe you live on the border of two states and would like to practice real estate in both? Most states offer some sort of real estate license reciprocity and/or portability. This means you may be able to practice real estate in a different state without having to retake the pre-licensing class.

However, you may have to retake the real estate exam. If you’re nervous about retaking the real estate exam, it’s best to do some test preparation. Aceable Real Estate School's real estate license courses will help you prepare for your test regardless of when you’ve taken your last one.

Let’s dive right in to discover what real estate reciprocity and portability mean.

What Is Real Estate License Reciprocity?

Real estate license reciprocity is an agreement between the states. As a real estate agent, it allows you to transfer your license without passing pre-licensing exams easily.

Since all states are different, there are different types of reciprocity. In some states, you can do your job without retaking licensing exams. In other states, you may have to take just a part of the exam.

Still, real estate license reciprocity helps you save quite a lot of time and money when you’re looking to move from one state to another. 

What Is Real Estate License Portability?

Real estate license portability is an agreement between states. It allows out-of-state real estate agents to perform real estate transactions in their home state.

There are three classifications of real estate portability laws. These include cooperative, physical location, and turf.

1. Cooperative State

A cooperative state lets out-of-state real estate agents and brokers engage in real estate transactions physically. These transactions include showing property, performing closings, and other stages of a transaction.

However, if you happen to be an out-of-state agent, you must co-broker with another real estate agent or brokerage in that state. 

Let's look at an example to see how this works. Say you’re helping a buyer from New York to purchase a new house in Rhode Island, a cooperative state. The home must be listed with a Rhode Island-licensed agent, and you'll need to partner with an in-state brokerage to help your buyer complete the purchase.

2. Physical Location State

Unlike a cooperative state, physical location law allows you to represent your client in an out-of-state sale or purchase. But you must do it remotely. You must not be located in the state in which you want to conduct a transaction.

Say your client from New York wanted to buy a house in Rhode Island. They’ve then changed their mind and want to buy a house in Vermont, a state with physical location laws. You can help them in any way, including sending them to see the house, making offers, and negotiating on their behalf. But you can't help them in person.

3. Turf State

States with real estate portability turf laws don’t allow anyone outside the state to conduct real estate transactions in their state.

Let's imagine your client has considered buying a house in New Hampshire and Oklahoma. But after analyzing everything, they’ve decided they don’t want to be so far away from home and now consider buying a house in New Jersey. Since New Jersey is a turf state, you can’t help them there directly. You can only refer this client to a licensed real estate agent in New Jersey to help them complete the transaction.

Key Takeaway

If you have an opportunity to work with clients in different states, make sure to review real estate license reciprocity laws and agreements in your state.

To refresh your knowledge and do your best on your exam, we highly recommend you to take real estate license courses relevant to the state you’re moving to.

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