Real Estate License Portability and Reciprocity
What is Difference Between Portability & Reciprocity?
Portability is the ability to use a real estate license earned in one state for transactions in a different state.
Reciprocity is the ability to transfer your current real estate license or education requirements to another state in order to more easily satisfy the requirements to obtain a real estate license in that state.
What Is Real Estate License Reciprocity?
Real estate reciprocity is the ability of a real estate license earned in one state to be transferred to other states. Since real estate license reciprocity states vary. Here are five classifications for real estate reciprocity that are crucial to understand:
1. Full Real Estate Reciprocity
States that offer full real estate license reciprocity allow you to transfer your real estate license from any state in the country upon the completion of the state-specific portion of the real estate exam for your target state.
2. Partial Real Estate Reciprocity
For states that offer partial real estate reciprocity, only specific states are included in their reciprocity agreement. If your home state is included in a partial reciprocity agreement, that means you’re able to transfer your real estate license from your home state to the target state upon the completion of limited state-specific education and examination requirements. For example, Oklahoma is one of eight states that hold a reciprocity agreement with Ohio. Oklahoma agents looking to practice in Ohio would benefit from their limited reciprocity agreement, though an agent from a state outside of the agreement would have a different set of requirements to earn their Ohio real estate license.
3. Mutual Real Estate Reciprocity
This type of agreement is very similar to partial reciprocity. Mutual reciprocity means only agents from specific states can transfer their education and experience to their target state. In these circumstances, agents from both states could benefit from the reciprocity agreement. If your home state is included in a mutual real estate reciprocity agreement, you’re able to transfer your real estate license from your state to the target state upon the successful completion of their state-specific educational requirements and exam. For example, a Connecticut agent looking to move to Colorado would benefit from those states’ mutual reciprocity agreement in the same way that a Colorado agent would benefit if they were moving to Connecticut to practice real estate.
4. Limited Real Estate Reciprocity
Exactly as it sounds: If one state has a limited reciprocal agreement with another, only residents of that specific state are allowed to transfer their real estate license upon the completion of state-specific educational and examination requirements. However, these agreements are limited, meaning that they don’t go both ways. For example, Louisiana has a partial reciprocity agreement with Mississippi, so agents looking to transfer their license from Mississippi to Louisiana benefit from the agreement. However, Mississippi doesn’t offer license reciprocity, so agents moving from Louisiana to Mississippi would need to take additional steps to practice real estate in the Bayou State.
5. None
If a state doesn’t offer real estate reciprocity with any state, that means non-residents cannot transfer their real estate license to practice in the target state. Though these states hold no formal reciprocity agreements, some will permit experience or education to count toward your license in the target state.
What Is Real Estate License Portability?
As a real estate agent, you want to know where you can work, grow your brand, and reach new customers. Real estate license portability lets you know where you can and cannot practice real estate beyond your home state. There are three classifications for real estate license portability that are defined below.
1. Cooperative State
When one state has a cooperative agreement with another state, you can practice real estate in both states. However, out-of-state agents need to have a co-brokerage agreement with a local brokerage in the target market before they can do business.
2. Physical Location State
This law won’t allow you to physically enter the state to represent your client if you’re an out-of-state agent. You must work remotely to assist with the purchase or sale in markets where this law is enacted.
3. Turf State
This is the most cut-and-dry of the three real estate license portability laws. Under Turf State Law, some states don’t allow anyone with an outside real estate license to do business in their market. There are currently six turf states in the U.S.: Kentucky, Missouri, Nebraska, New Jersey, Pennsylvania, and Utah.