License Reciprocity & License Recognition

Quick Takeaways

License Reciprocity occurs when one state chooses to honor the official real estate license of another, lessening the time effort of completing a multi-state transaction
Every state has different license reciprocity rules and regulations, and it is necessary to check the laws before engaging in even a single transaction.
There are three types of real estate license reciprocity: cooperative, physical location, and turf.

Source: Real Estate License Reciprocity & Portability (The Close, Jun. 28, 2023)

Reciprocity in real estate applies to the functionality of real estate licensure from state to state. Many states do accept licensure from other states, especially neighbors. The National Association of REALTORS® has a "Broker and Salesperson License Reciprocity and Portability" from the State Issues Tracker* (National Association of REALTORS®, November 2019) *Requires nar.realtor username/password.

Various organizations, including the U.S. Bureau of Labor Statistics and the National Conference on State Legislators, regularly conduct research on reciprocity law in each of the 50 states. These reports provide current and reliable information on the reciprocity legislation for all to access.

California created a new law aiming to expedite to reciprocity process for veterans and military spouses – Bill AB 107. The law, one of the newest advances in reciprocity law, recognizes the challenges military spouses face in relocation, often having to move quickly and without enough time to receive a new license that they have already acquired in their current state. New Hampshire welcomed license reciprocity, but other states still feel it is far in the future.

See References for more information.

References

NAR Library & Archives has already done the research for you. References (formerly Field Guides) offer links to articles, eBooks, websites, statistics, and more to provide a comprehensive overview of perspectives. EBSCO articles (E) are available only to NAR members and require the member's nar.realtor login.

What Is License Reciprocity?

See "Broker and Salesperson License Reciprocity and Portability" from the State Issues Tracker* (National Association of REALTORS®, November 2019) *Requires nar.realtor username/password.

Surveys on License Reciprocity

Real Estate License Reciprocity Guide — 2023 Updated — All 50 States (Fit Small Business, Mar. 29, 2023)

“Keep in mind that a reciprocity agreement doesn’t necessarily allow a real estate salesperson or broker to take part in real estate transactions in a reciprocal state without a license in that state. Most commonly, it means that the requirements for licensing are reduced. For example, agents might need to take a few hours of classes from an accredited online real estate school like Real Estate Express to secure a license in a new state. Check with your state’s licensing board for specific requirements.”

Real Estate License Reciprocity Portability 2022 Guide (The CE Shop, 2023)

“Real estate reciprocity is the ability of a real estate license earned in one state to be used in other states. Since real estate license reciprocity states vary, and it can be incredibly confusing to navigate on your own, this guide explains how to transfer a real estate license to another state and lists the states that offer real estate reciprocity. Before we break down each state, there are five classifications for real estate reciprocity that are crucial to understand.”

Occupational Licensing Legislation Database (National Conference of State Legislatures, Dec. 1, 2022)

The National Conference of State Legislation (NCSL) and the U.S. Department of Labor have collaborated to create the Occupational licensing Legislation Database. The database features legislation from 50 states and over 34 occupations, and also features state specific legislation as it relates to license reciprocity.

50 State Comparison Report: A Comparison of State Licensure Requirements and Processes (Pennsylvania Department of State, Aug. 17, 2021)

“Over the past several decades, the share of U.S. workers holding an occupational license has grown sharply. In the 1950s, just five percent of U.S. workers were required to hold an occupational license – meaning they completed additional schooling or training and passed an exam to be licensed to practice their trade or profession in a certain state. Today, the U.S. Bureau of Labor Statistics estimates that nearly a quarter of full-time workers (43 million people) hold an occupational license. This uptick in licensed workers is directly correlated to the growth of occupational licensing laws. In the early 1990s, 800 occupations required licenses in at least one state. According to the National Conference of State Legislatures, that number is currently over 1,100 occupations.”

Recent Advances

Universal Occupational Licensing Far Off, Lawmakers Say (Indiana Capital Chronicle, Sep. 14, 2023)

“In its first meeting Wednesday, a committee charged with considering the idea heard calls for an exhaustive analysis of the impacts on the dozens of industries whose licensing the state regulates. And members of several industries asked to be left out of any universal licensure recognition efforts. Committee chair Sen. Linda Rogers, R-Granger, said she would “probably not” pursue such a proposal “in the near future,” though she didn’t rule it out in the long-term.”

New Hampshire Law Allows Out-of-State Professionals to Easily Get Licensed in New Hampshire (NHPR, Jun. 29, 2023)

“The new law requires the state to issue an occupational license to anyone who holds the same license somewhere else, provided that state has similar requirements to New Hampshire and the license holder remains in good standing. During a signing ceremony at the State House, Sununu said the change will make it easier for out-of-state workers to come to New Hampshire, and help businesses struggling to hire, by eliminating an unnecessary barrier.”

Universal Licensing Recognition: Why Not Michigan? (Mackinac Center for Public Policy, Jun. 13, 2022)

“Michigan’s southern neighbor, Ohio, is on the verge of passing a nearly universal licensing law. Companion bills that recently passed both the Ohio House and Senate would have Ohio recognize occupational licenses from other states for nearly all of Ohio’s licensed occupations, lessening the regulatory burdens on someone moving into the state who already possesses a license for a given occupation.”

California Lawmakers Pass Bill for License Reciprocity for Military Spouses (Travis Air Force Base, Oct. 18, 2021)

California passed a new law regarding easing license reciprocity requirements and restrictions for military spouses on October 8, 2021. Bill AB 107, which was signed into law by Governor Gavin Newsom, grants veterans and spouses of active-duty military an “expedited, temporary authorization to practice while meeting state-specific requirements for a period of at least one year.”

Mutual Recognition vs. Reciprocity (One Blue Real Estate School, Oct. 4, 2020)

Mutual Recognition and Reciprocity can both be of help to REALTORS® who are looking to move or expand their business, but there are important differences between the two. Reciprocity refers to the acceptance of the actual license, while Mutual Recognition occurs in a situation when a state chooses to recognize the education and experience that a licensee has obtained in another state. In a Mutual Recognition situation, an educational certificate might be honored, not the license.

Is Occupational Licensing a Barrier to Interstate Migration? (American Economic Journal: Economic Policy, Aug. 2020) E

“Occupational licensure may limit the interstate movement of workers because it adds to the cost of moving between states. We analyze the interstate migration of 22 licensed occupations, proxying for the difficulty of the regulations by comparing state-specific licensed occupations to those with national licensing exams. Our empirical strategy also uses individuals who move a long distance, removing the influence of occupation characteristics and self-selection of migration-averse individuals into licensed occupations. Our estimates show that occupational licensing reduces interstate migration, but the magnitude of the effect can only account for a small part of the overall decline in recent decades.”

Organizations to Contact for More Information

Association of Real Estate License Law Officials (ARELLO)
150 North Wacker Drive, Suite 920
Chicago, Illinois 60606-1682
312-300-4800
http://www.arello.org

Real Estate Educators Association
7739 E. Broadway, #337
Tuscon, Arizona 85710
(520) 609-2380
http://www.reea.org

eBooks & Other Resources

eBooks.realtor.org

The following eBooks and digital audiobooks are available to NAR members:

Real Estate License Exams for Dummies® (eBook)

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