How to Pass the Real Estate Exam
Taking the real estate license exam is your opportunity to show what you know about your state’s real estate industry. Whether you want to work with clients to find their next home as a real estate salesperson or become a broker with a team working for you, the first and most important milestone is to get your real estate license.
Before you are ready to see your face on a “For Sale” sign, you must pass a real estate license exam to get your real estate license. These tests can be daunting, but with a helpful study plan and pre-licensing education, you can be ready to pass in no time.
Real Estate Exam Study Plan
Step 1: Take a week to write up a schedule that works for you. Set aside some time over the next few months to study. It can be tempting to dive right into your study materials, but one of the best things you can do to ensure your success is to make and stick to a study schedule.
Consider your other commitments, such as upcoming holidays, vacations, or family milestones, and make realistic plans for your time. The majority of your pre-exam prep should focus on practice tests and reviewing the real estate courses you have already completed.
It can help to develop a consistent study routine. Find the time of day that works best for you, such as first thing in the morning, during your lunch hour, or after dinner. Block out that time every day on your calendar and use it just for studying for your real estate exam.
Step 2: Complete practice questions, review your pre-licensing course materials and take practice tests. You should have already completed your real estate education courses. In fact, some states require this documentation before you can even register for your exam.
You may consider a specific exam prep course, in addition to your required coursework. Real estate exam prep courses often come with additional free real estate license exam practice tests, content questions, and access to instructors to answer questions to help you be as prepared as possible.
The length of your exam prep course can range from a weekend cram class to a more thorough course spanning a few weeks.
Look through your notes and assignments, review your past quizzes and tests, and most importantly, take practice tests. The real estate license exam is a culmination of all of your real estate education courses. A practice test is the best way to become familiar with the format and types of questions you will see.
Step 3: Take more practice tests. Practice tests can give you an idea of how prepared you are for the exam, build up your confidence as you see your practice scores improve, and increase your familiarity with the test. To make the most of your real estate practice exams, treat them just like the real thing and put away all study materials.
Some test-takers find that they need more or less time to prepare for the real estate license exam. Do not skip steps or rush through practice exams. It is better to spend more time preparing if it means you will pass the exam. If you plan to spend more time preparing, make sure that you continue to take practice exams through your test prep course or online resources.
Step 4: Get plenty of rest during the week leading up to test day. A good night’s sleep and a hearty breakfast will ensure that you are ready to recall all of the knowledge you spent so much time learning. You should also make a plan to get to the testing center early to avoid test day jitters and stress.
Studying for the Real Estate Exam
Unlike other licensing processes, such as insurance licensing, most states require that you complete three courses approved by the state authority, such as the Department of Real Estate, to be able to take your real estate license exam. These must be done through an accredited institution and will likely take six months or longer.
Completing your required pre-license education is a lengthy process, while concentrated studying for the real estate exam can be done in just a few weeks leading up to the test. Think of the required courses as a steady marathon in real estate knowledge and your study plan as the last mile when you give it your all to get to the finish line, your real estate license exam.
Review your notes, handouts, and assignments from your real estate courses. The courses are required before the real estate license exam because you need to learn this information to do well on your exam. Take advantage of the hard work you already did and use your class materials to study.
Required Courses for the Real Estate Exam
Most states require college-level courses for the real estate license process. You can complete these classes at any accredited state university, private university, community college, or real estate education program. Your state’s Department of Real Estate is a great place to find a list of approved institutions.
Real Estate Principles: These courses are usually around 45 credit hours total.
Real Estate Practice: These courses are usually around 45 credit hours total.
Real Estate Elective Course: These courses are usually around 45 credit hours total. You are able to choose from among a list, such as the following options.
- Property Management
- Real Estate Appraisal
- Real Estate Finance
- Real Estate Economics
- Legal Aspects of Real Estate
- Real Estate Office Administration
- General Accounting
- Business Law
- Mortgage Loan Brokering and Lending
- Computer Applications in Real Estate
- Common Interest Developments
Taking courses through a real estate education program can help you structure your course load, as well as connect you with industry professionals as part of your network. Most places offer the required courses through in-person or distance learning.
What Is On the Real Estate Exam?
The real estate license exam is state-specific, but most cover the same main topics. In California, the real estate exam is divided into seven areas.
- Property Ownership and Land Use Control and Regulations (15% of exam)
- Laws of Agency and Fiduciary Duties (17% of exam)
- Property Valuation and Financial Analysis (14% of exam)
- Financing (9% of exam)
- Transfer of Property (8% of exam)
- Practice of Real Estate and Disclosures (25% of exam)
- Contracts (12% of exam)
Within each section, the state content outline goes over the main topics that you should know and understand to pass the real estate exam. Keep in mind that the state outline just covers the major topics and may not include every detail on the test. Going over the topics in more detail is how a test prep course, practice test, and other study materials can help you prepare.
Property Ownership and Land Use Control and Regulations
This section covers the main aspects of property ownership, as well as the designations to different kinds of property and how it can impact a real estate purchase or sale. Topics include:
- Classes of Property
- Property Characteristics
- Types of Ownership
- Descriptions of Property
- Government Rights in Land
- Public Controls
- Environmental Hazards and Regulations
- Private Controls
- Water Rights
- Special Categories of Land
Laws of Agency and Fiduciary Duties
As a licensed real estate agent, you need to work on behalf of your client, including disclosing certain information about your professional role and the property itself. This section tests your understanding of the responsibilities you have as a licensed real estate agent.
- Law, Definition, and Nature of Agency Relationships, Types of Agencies, and Agents
- Creation of Agency and Agency Agreements
- Responsibilities of Agent to Seller/Buyer as Principal
- Disclosure of Agency
- Disclosure of Acting as Principal or Other Interest
- Termination of Agency
- Commission and Fees
- Responsibilities of Agent to Non-Client Third Parties
Property Valuation and Financial Analysis
One of the most important tasks you complete as a licensed real estate agent is to help your clients understand the value of their home or the home they want to purchase. You need to be able to analyze the local and national real estate market, including understanding the financial value of a certain home or neighborhood features.
- Methods of Estimating Value
- Financial Analysis
While you will work with other real estate professionals that will specialize in financing, such as the lender or loan officer, you will still need to have a working knowledge of real estate financing. A great real estate agent can answer questions about all aspects of a real estate transaction, including options for financing.
- General Concepts
- Types of Loans
- Sources of Financing
- Government Programs
- Mortgages/Deeds of Trust/Notes
- Financing/Credit Laws
- Loan Brokerage
- Types of Loan Originators
Transfer of Property
Most real estate transactions go through a lawyer or title company to complete the actual transfer of property. As the real estate agent, you will be the first person that a client comes to with questions about this process. While this is often the shortest section of the exam, it is still a critical part of your knowledge.
- Title Insurance
- Tax Aspects
- Special Processes
- Transfer through Court Supervision
- Types of Vesting
Practice of Real Estate and Disclosures
This is the longest section of the test because it accounts for the majority of your work and professional expertise as a licensed real estate agent. It can vary by state, as the laws and disclosures required in each state are unique. In California, this section includes:
- Trust Account Management
- Fair Housing Laws
- Truth in Advertising
- Record-Keeping Requirements
- Agency Supervision
- Permitted Activities of Unlicensed Sales Assistants
- DRE Jurisdiction and Disciplinary Actions
- Licensing, and Continuing Education Requirements and Procedures
- California Real Estate Recovery Fund
- General Ethics
- Property Management
- Commercial/Industrial/Income Properties
- Specialty Areas
- Transfer Disclosure Statement
- Natural Hazard Disclosure Statements
- Disclosure of Material Facts Affecting Property Value
- Need for Inspection and Obtaining/Verifying Information
- Servicing Diverse Populations
As a licensed real estate agent, you are responsible for the contract between your client and the buyer or seller, as well as you and your client. There are multiple kinds of contracts, each with their own requirements and formats.
- Listing Agreements
- Buyer Broker Agreements
- Offers/Purchase Contracts
- Promissory Notes/Securities
- Purchase/Lease Options
- Advanced Fee
National and State-Specific Information
Some states divide the real estate license exam into two sections: national knowledge and regulations and state regulations. For example, the Texas real estate license exam consists of an 80-question national portion and a 30-question state portion. The exam time is divided between the two sections.
Taking a real estate license exam prep course specific to your state is one of the best ways to prepare, as it takes the test format into consideration. Your practice tests will be geared toward the state that you plan to become licensed in, making them that much more valuable as part of your real estate license exam prep.
Real Estate Exam Study Tips
As you near the end of your required pre-licensing education, it is time to focus your studying on exam preparation. These tips will help you make the most of your efforts and be ready to pass on test day.
Take Practice Tests
The importance of real estate exam practice tests cannot be overstated. Not only will it help you become more familiar with the format of the test, every practice test that you complete gives you more exposure to the types of questions on the real estate license exam.
Set a time limit and turn off your electronics to really simulate the test environment. You may want to go to a quiet location, such as a library or bookstore to avoid distractions at home. If you aren’t happy with your practice test scores, focus your studying on the areas that are giving you the most trouble and try again.
Work with a Professional
A test prep course can help you concentrate your studying, especially if you have taken a couple of practice tests and aren’t seeing improvement. If you liked your real estate pre-licensing education school, ask if they have any additional courses that are specifically geared toward preparing for the real estate exam.
Many real estate schools offer discounts to repeat students. Veterans and military spouses may also qualify for reduced rates.
Try Job Shadowing
A lot of the concepts in real estate can be confusing until you see them in practice. Meeting with a licensed real estate agent and going over some of the documents on the test, such as contracts or disclosures, can help make them clearer. If you are a hands on learner, spending the day shadowing a real estate pro can be a great way to learn.
Include Sleep in Your Study Plan
No one learns well when they are exhausted, so make sure to include time to get some rest in your study schedule. If you have another job or responsibilities, try to fit your studying in during the morning or afternoons. Avoid the temptation to study late into the night. Being well-rested is critical for success on test day.
General Real Estate Exam Information
The length of the real estate exam varies by state, but most fall between 100 and 150 questions. The exam does have a time limit, often between 3.5 and 5 hours. The exam is a computer-based multiple-choice exam.
Some states offer a combined exam and license application. You will still need to pay the fees for both the exam and license, but it does cut down on required paperwork and makes processing smoother. Once you complete this combined application, you will have up to two years during which you have to pass the exam.
Fees range from $37-$130 for the real estate license exam. If you choose to pay for both the license and exam at the same time, you can expect to pay between $215-$400 total.
You will need to show a current, unexpired photo ID at the testing center. Accepted forms of photo identification include a driver’s license or DMV ID card, passport, or military ID.
The testing center will provide you with a list of prohibited items when you register for the exam. These things should not be brought into the testing center. If you have to bring them, such as your car keys, you can check them into a provided locker during your exam. Electronics must be powered down and you will not be able to access them, even on break.
Prohibited items include cell phones, purses, wallets, keys, backpacks, briefcases, study materials, food, drink, tablets, laptops, calculators, watches, cameras, pens, and others. You will be provided with a basic four function calculator to work on the math problems on the exam.
You must meet a minimum percentage of questions answered correctly, usually around 65-75%, to pass. When you pass, you will be notified of your PASS results. You will not receive a detailed score, but your results will be provided to your licensing authority.
If you fail the exam, you will get a more detailed report that includes your percentage in each of the subject areas. This can help you focus your efforts before taking the exam again.
How Long Should You Study for the Real Estate Exam?
Most test-takers spend around one month studying for the real estate exam. Keep in mind that this concentrated studying is done after the completion of the required pre-licensing courses, which often take much longer. The courses are a good foundation for your real estate career, while the final few weeks of studying are best used to get familiar with applying your knowledge on the test.
How Many Times Can You Take the Real Estate Exam?
There is seldom a limit on the number of times that you can take the real estate exam if you fail. However, some states require that you retake your pre-licensing education if you fail the exam multiple times. Your overall application may expire if you do not pass the exam within a designated time, often one or two years. You will then need to begin a new application, pay another application fee, and possibly resubmit or retake your pre-licensing education courses.
How Hard Is It to Pass the Real Estate Exam?
Most states require a minimum passing score between 65-75%. Because the pre-licensing education requirements are extensive, most test-takers go into the real estate exam with a lot of knowledge. Understanding the format of the test and being prepared can help you reach that minimum passing score.
Passing the Real Estate License Exam
Earning a passing score on the real estate license exam is a major milestone! You are now on your way to becoming a fully licensed real estate agent. Whether you dream of becoming a trusted pro in your neighborhood or opening your own brokerage, passing the real estate license exam is the first step on your path as a successful real estate agent.
Information on this page has been gathered by a multitude of sources and was most recently updated on December 2020.
Any Information on this site is not guaranteed or warranted to be correct, accurate, or up to date. StateRequirement and its members and affiliates are not responsible for any losses, monetary or otherwise. StateRequirement is not affiliated with any state, government, or licensing body. For more information, please contact your state's authority on insurance.
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