How to Get a real estate license in Michigan
Starting your real estate career in Michigan might seem challenging, but with the right guidance, it’s a clear and manageable process. This detailed guide will take you through each necessary step, ensuring you’re fully prepared to launch your real estate career in Michigan. Let’s begin your journey to becoming a licensed real estate agent.
We'll walk you through 6 easy steps
Understand the Basic Requirements
Before getting into the specifics, it’s crucial to grasp the basic requirements for obtaining a real estate license in Michigan. These are the essential criteria you need to meet:
Age Requirement
To apply for a real estate license in Michigan, applicants must be at least 18 years old. This ensures that individuals have reached the required level of maturity and legal responsibility needed for the profession.
Residency and Identification
You do not need to be a Michigan resident to apply for a real estate license, but you must provide a valid Social Security number. This is essential for conducting background checks and ensuring compliance with state regulations. Non-residents must meet the same standards as Michigan residents.
Honesty and Integrity
Integrity is critical in the real estate profession. The Michigan Department of Licensing and Regulatory Affairs (LARA) will conduct a comprehensive background check. Any criminal convictions could lead to the denial of your license. Being transparent about any past legal issues and showing evidence of rehabilitation can strengthen your application.
Step 1: Take a Real Estate Pre-Licensing Course
In Michigan, you must complete 40 hours of pre-licensing education. This course covers crucial topics such as real estate principles, practices, and Michigan-specific laws.
Course Breakdown (40 hours)
The required course to get your Michigan license includes 4 hours on federal and state civil rights laws, ensuring comprehensive legal knowledge. Additionally, 36 hours cover essential real estate topics like finance, agency laws, and property transactions, preparing you for all aspects of the profession.
Civil Rights Law - 4 Hours
This category fulfills the state-mandated requirement by dividing the 4 hours evenly between federal and Michigan-specific civil rights laws. The federal portion covers major laws like the Civil Rights Acts, Fair Housing Act, and Equal Credit Opportunity Act, as well as issues like redlining and steering. The Michigan portion addresses state-specific laws such as the Elliott-Larsen Civil Rights Act, the Persons with Disabilities Civil Rights Act, and details on filing Fair Housing complaints.
Additional Required Real Estate Topics - 36 Hours
This category comprises 36 hours of instruction across 16 levels, covering essential real estate topics. These include foundational knowledge of real estate, principles of finance, agency laws, property condition disclosures, purchase contracts, and the processes of closing and escrow. Each level varies in length depending on the complexity of the subject.
Choosing the Right Real Estate School
Selecting the right real estate school is crucial. Look for accredited schools that offer flexibility, especially if you have a busy schedule. Online courses can provide the convenience of studying at your own pace.
Research and Reviews:
Start by researching various real estate schools and reading reviews from past students. Look for schools with high pass rates for the real estate exam and positive feedback on their teaching methods.
Online vs. In-Person:
Decide whether you prefer online or in-person classes. Online courses offer flexibility and convenience, allowing you to study at your own pace. In-person classes provide direct interaction with instructors and peers, which can enhance your learning experience.
Course Materials and Support:
Evaluate the course materials and support services provided by the school. High-quality textbooks, interactive lessons, and access to instructors for questions can significantly impact your success. Some schools also offer additional resources like exam prep courses and study groups.
Study Tips
Daily Study Schedule:
Create a daily study schedule that covers all exam topics, ensuring regular review sessions. (Asana provides a great FREE task manager)
Flashcards:
Utilize flashcards for key terms and concepts to enhance memorization. (These Quizlet Flashcards may be helpful)
Practice Tests:
Regularly take practice tests to gauge your understanding and get familiar with the exam format. (Free Florida Real Estate Practice Exam)
Step 2: Submit Your Michigan Real Estate License Application
After completing your pre-licensing coursework, you’ll need to submit your license application to the Michigan Department of Licensing and Regulatory Affairs (LARA).
Steps to Submit Your Application
Complete the Application Form: Fill out the online application form available on the LARA website.
Gather Required Documents: Ensure you have proof of completed pre-licensing education and necessary identification documents ready to submit.
Submit Your Application: Submit your application and required documents online through the LARA online services portal.
Complete the Application Form: Fill out the online application form available on the LARA website.
Application Processing Time
The DBPR will take several weeks to process your application. During this time, they will review your transcripts and verify that you meet all the requirements. Make sure to double-check your application for completeness to avoid any delays.
Tracking Your Application
You can track the status of your application online through the DBPR’s website. Regularly checking the status can help you stay informed about any issues or additional requirements. If there are delays, contacting the DBPR directly can provide clarity and expedite the process.
Step 3: Pass the Michigan Real Estate Exam
The exam is a 3.5-hour test with 100 multiple-choice questions. You need to score at least 75% to pass. Each attempt requires a new application and a fee of $37.
Salesperson Examination Content
Real Estate Fundamentals
- Ownership of Property
- Regulations and Land Use Controls
- Market Analysis and Valuation
- Real Estate Financing
- Principles of Agency
Transactional and Legal Practices
- Property Conditions and Required Disclosures
- Contractual Agreements
- Title Transfer Procedures
- Real Estate Mathematical Calculations
- Specialized Areas of Practice
State-specific Portion of the Exam
- Property Conditions and Required Disclosures
- Contractual Agreements
- Title Transfer Procedures
- Real Estate Mathematical Calculations
- Specialized Areas of Practice
Preparation Tips
Review Course Materials:
Go over the textbooks and notes from your pre-license courses. Revisiting these materials can reinforce your understanding of key concepts. Focus on areas where you feel less confident to ensure a well-rounded preparation.
Practice Exams:
Take as many practice exams as possible. This helps you get familiar with the exam format and identify areas where you need more study. Practice exams can also help you manage your time effectively during the actual test. (Free Michigan Real Estate Practice Exam)
Study Groups:
Join or form study groups. Discussing topics with peers can enhance understanding and retention. Study groups provide a platform to share knowledge, ask questions, and support each other.
Exam Prep Courses:
Consider enrolling in an exam prep course for additional support and structured study. These courses often include practice exams, study guides, and expert instruction. Investing in a prep course can increase your chances of passing the exam on the first attempt.
Exam Day Tips
Arrive Early:
Ensure you arrive at the exam center early to avoid any last-minute stress. Arriving early gives you time to settle in and focus before the exam begins. Check the location and travel time in advance to plan your journey.
Bring Required Identification:
You’ll need a valid photo ID to enter the exam. Make sure your ID is current and matches the name on your application. Having all necessary documents ready can prevent any issues at the exam center.
Stay Calm and Focused:
Read each question carefully and manage your time wisely. Staying calm and composed can help you think clearly and avoid mistakes. Take deep breaths and stay positive throughout the exam.
Exam Room Etiquette:
Follow all instructions given by the exam proctors. Adhering to the rules ensures a smooth and fair testing experience for everyone. If you have any questions or issues, ask the proctors for assistance.
Step 4: Complete the Fingerprinting Requirement
After passing the exam, you must fulfill the fingerprinting requirement for a background check. This is a mandatory step to ensure you meet the honesty and integrity standards set by the Michigan Department of Licensing and Regulatory Affairs (LARA).
How to Get Fingerprinted
Use a Live Scan service provider approved by the Michigan State Police (MSP). Live Scan is an electronic fingerprinting process that is quick and secure. Locate a service provider near you and schedule an appointment (Costs typically range from $10 to $77).
Fill out and submit the required form along with the fingerprinting fee. The Live Scan service provider will electronically transmit your fingerprints to the MSP. Keep a copy of the form and receipt for your records.
Be prepared to pay the fingerprinting fee, which varies by provider. The fee generally includes the cost of the Live Scan service and the background check. Confirm the total cost when scheduling your appointment.
LARA will conduct a background check using your fingerprints. This check ensures you meet the honesty and integrity standards necessary for a real estate license in Michigan. Any issues identified during the background check may need to be addressed before your license is granted.
Addressing Background Check Issues
If any issues arise during the background check, you may need to provide additional documentation or explanations. Demonstrating honesty and taking responsibility for past actions can positively influence LARA’s decision. If necessary, seek legal advice to navigate any complex issues.
Step 5: Submit the Salesperson License Application
The next step is to submit your Salesperson License Application to confirm that you have passed the exam and completed the fingerprinting requirement.
Application Checklist
Complete LARA Application Form:
Fill out the Salesperson License Application form available on the LARA website. Ensure all sections are accurately completed. You can access the form online.
Attach Exam Results:
Include proof that you passed the Michigan real estate exam. This documentation is essential for LARA to verify your eligibility. Keep a copy of your exam results for your records.
Include Fingerprinting Proof:
Attach your Live Scan Service form as proof that you have completed the fingerprinting requirement. Ensure all required signatures and details are included.
Pay the License Fee:
As of 2024, the fee for the Salesperson License in Michigan is $88. This fee must be submitted along with your application. Keep a copy of your payment receipt for future reference.
After submitting your application, you can track its status online through the LARA website. Regularly checking the status will keep you informed about any updates or additional requirements. If there are delays, contacting LARA directly can provide clarity and expedite the process.
Step 6: Find a Real Estate Broker to Sponsor You
Once you pass the exam, you need to find a sponsoring broker to activate your license. Look for a brokerage that aligns with your goals and offers the support you need.
Considerations
Find a supportive and collaborative environment. The right culture can significantly impact your job satisfaction and success.
Understand the financial arrangements. Different brokerages offer different commission splits, so choose one that suits your financial goals.
Choose a broker who provides ample training and mentorship opportunities. Early career support is crucial for your development and success.
Questions to Ask Potential Brokers
17 Brokerage Interview Questions
- What training programs do you offer for new agents?
- How does your commission split work, and are there any additional fees?
- What kind of support and resources will I have access to?
- Can you provide references from other agents in your brokerage?
Choosing the right broker is crucial as it impacts your early career significantly. Consider top-rated brokers like eXp Realty, Keller Williams, Coldwell Banker, and Compass.
Why Join Smart Agent Alliance at eXp Realty?
When you join Smart Agent Alliance, you get double the value because you’re also automatically a Wolf Pack member. Together, Smart Agent Alliance and the Wolf Pack provide the tools, support, and expertise to elevate your business to new heights.
Smart Agent Alliance Benefits:
At Smart Agent Alliance, we prioritize organization, clarity, and efficiency to help our agents succeed. We provide essential onboarding resources, customizable presentations, business automations, client checklists, business assets, social media content, YouTube support, a growth plan, quality lead generation, production know-how, website support, and top-notch organizational tools.
Wolf Pack Benefits:
The Wolf Pack team at eXp Realty offers expert-led courses like Social Agent Academy 3.0, the Wolf Pack Hub, and the Investor Army for property flipping. We provide tailored assistance for new agents, developing agents, top producers, team leaders, and broker owners. Key resources include lead generation, production know-how, social media content, and YouTube support.
eXp Realty Benefits:
eXp Realty offers a comprehensive range of benefits for agents, focusing on top pay structures, low fees, and free stock options. Agents get an 80/20 commission splits that cap at $16,000 annually, with opportunities to earn 100% commission, receive annual stock awards and gain income through Revenue Share. Additional resources include 24/7 agent support, affordable healthcare, live training, and advanced tech tools like kvCORE and customizable IDX websites.
Financial Planning
Starting a career in real estate involves some initial costs and financial planning. Understanding these costs and planning accordingly will help you manage your finances effectively.
All stated fees are subject to change.
Starting Costs
- Initial Expenses: These include licensing fees, marketing expenses, office supplies, and technology tools needed to start your career. For example, initial expenses may include:
- Pre-Licensing Course: $100-$300+
- Exam Fee: $79 per attempt
- Application Fee: $88
- Fingerprinting Fee: Roughly $10–$77
- Marketing Materials: Business cards, signage, and online advertising costs
- When you join a brokerage in Michigan, many will require you to become a member of the National, State, and Local Associations of Realtors. You’ll also need to budget for fees related to the Multiple Listing Service (MLS) and Supra Key services.
- National Association of Realtors (NAR):
- Membership Fees: For 2024, the annual dues for NAR are $156, plus a $45 special assessment fee for the Consumer Advertising Campaign, bringing the total to $201 per year.
- Michigan Realtors (State Association):
- Membership Fees: The annual dues for Michigan Realtors in 2024 are approximately $183. This fee is separate from the NAR dues.
- Local Association of Realtors:
- Membership Fees: Local association fees in Michigan can vary depending on the specific association. For example:
- Greater Metropolitan Association of Realtors (GMAR): The annual dues are typically around $240 to $300.
- Ann Arbor Area Board of Realtors (AAABoR): The fees usually range from $225 to $275 per year.
- Multiple Listing Service (MLS):
- Fees: MLS fees in Michigan also vary depending on the region. For instance:
- Realcomp MLS, serving a large part of Michigan, charges approximately $396 annually.
- Other local MLS services in Michigan might have similar fee structures.
- Fees: MLS fees in Michigan also vary depending on the region. For instance:
- Supra Key Fees:
- Fees: Supra Key services in Michigan typically include an initial setup fee, around $50, and a monthly service fee ranging from $20 to $25.
- National Association of Realtors (NAR):
These fees are approximate and may vary slightly depending on your specific location and the associations or MLS you join. It’s always best to confirm the exact fees with the local associations or MLS for the most accurate and up-to-date information.
Budgeting Tips
- Create a Budget: Track your expenses and forecast your income. Plan for slower months to ensure financial stability.
- Emergency Fund: Set aside an emergency fund to cover unexpected expenses or slow periods in the market
Income Management
- Commission Structure: Real estate agents typically earn commissions from sales. Understand how your brokerage’s commission structure works and how to manage irregular income streams. Commission splits can vary widely, typically ranging from 50/50 to 70/30 or higher, depending on the brokerage.
- Tax Planning: As an independent contractor, it’s important to plan for taxes. Keep track of deductible expenses, make estimated tax payments, and maintain good record-keeping practices. Consulting with a tax professional can help ensure compliance and optimize your tax strategy.
Frequently Asked Questions
What are the requirements to get a Michigan real estate license?
To get a Michigan real estate license, you must be at least 18 years old, complete 40 hours of pre-licensing education, pass the Michigan real estate exam, submit fingerprints for a background check, and file your application with LARA along with the $88 fee.
How much does it cost to get a real estate license in Michigan?
The cost to get a real estate license in Florida typically ranges from $377 to $544+. This includes the pre-licensing course ($200-$300), application fee ($88), background check fee ($10-$77), and exam fee ($79)
How long does it take to get a real estate license in Michigan?
It typically takes 3 to 6 months to get a real estate license in Michigan. This timeframe includes completing the 40-hour pre-licensing course, passing the exam, submitting fingerprints, and waiting for the Michigan Department of Licensing and Regulatory Affairs (LARA) to process your application.
What is the pass rate for the Michigan real estate exam?
The pass rate for the Michigan real estate exam varies, but generally, it is around 58-64%, depending on the source and the exam preparation provider. For example, some providers report a pass rate of 64%, while others have lower rates for different portions of the exam.
What happens if I fail the Michigan real estate exam?
If you fail the Michigan real estate exam, you can retake it. You’ll need to reschedule the exam and pay the exam fee again. There is no limit to the number of times you can retake the exam, but it’s essential to review the areas where you struggled before attempting the test again.
How do I renew my Michigan real estate license?
To renew your Michigan real estate license, complete 18 hours of continuing education, including 2 hours of legal updates each year. Then, submit the renewal application and pay the fee online through the LARA website before your license expires.