State Licensing

Which states require a real estate license?

Every state requires a real estate license for the sale of real estate, or real property – or, in fact, any interest in real property. The states that don’t require licensure for the sale of a business generally take the position that the lease is incidental to the sale of the business, or that the fee is not based on the transfer of the lease. Unlicensed business brokers in these states are not supposed to be involved in the lease, even the assignment of it.

The following list can change on a moment’s notice, but as of this writing, these states are the ones that, in our opinion, require a real estate license for the sale of a business.

  • Alaska
  • Arizona
  • California
  • Colorado
  • Florida
  • Georgia
  • Idaho
  • Illinois (Illinois does not actually require a license, but registration with the state securities commission is necessary.)
  • Minnesota
  • Nebraska
  • Nevada
  • Oregon
  • South Dakota
  • Utah
  • Washington
  • Wisconsin
  • Wyoming

The following states don’t currently require a license, but are on our watch list:

  • Hawaii
  • Kentucky
  • Michigan (Michigan recently required a real estate license, but a court case nullified it and the legislature might feel that they should act and require licensing for the sale of a business.)
What does BBP recommend regarding licensure?

Our recommendation to people entering the profession in those states that don’t require a license? If you are successful after 90 days or so, take the requisite coursework, get your real estate license, and then work to obtain your broker’s license.

What does it take to get a real estate license?

All states, to our knowledge, require so many hours of educational courses and the passing of an examination to obtain the basic sales license. Many states require a background check in addition. Further course work, experience, and the passing of another exam are usually required for the real estate broker’s license. Most states have their requirements on their Web site.

Check with your state’s Department of Real Estate for updated requirements.