How to Get a Real Estate License in South Dakota

In order to kickstart your real estate career in South Dakota, it’s essential to obtain a South Dakota Real Estate License. However, despite the fact that the application process is mainly completed online nowadays, many applicants can still find it quite confusing and complicated.

For this reason, this How to Get a Real Estate License in South Dakota article will break down the main steps involved in the licensing process, covering everything from educational requirements to exam preparation and having your fingerprints taken.

South Dakota Real Estate License

In order to get your South Dakota real estate license and start working in the real estate industry, there are several key steps you’ll need to complete. These include:

1. Ensuring You Meet the Licensing Eligibility Requirements
2. Completing the Mandatory Pre-Licensing Education
3. Passing the South Dakota Real Estate Exam
4. Passing the Background Check
5. Obtaining Errors and Omissions (E&O) Insurance
6. Finding a Qualifying Broker
7. Submitting a License Application

In the sections below, we’ve explored each of these steps in more detail.

Step 1: Meet the South Dakota Real Estate License Requirements

Before continuing ahead with your application for a South Dakota real estate license, you’ll first need to confirm that you’re actually eligible for it by ensuring you meet the following prerequisites per South Dakota Codified Law (SDCL) Chapter 36-21A-30:

• You must be at least 18 years old
• You must be a citizen of the United States or a South Dakota resident
• You must be of “reputable character”
• You must not have had any real estate license application rejected in the year prior to the date of your application or revoked within five years of the same date

According to SDCL 36-21A-33, the South Dakota Real Estate Commission (SDREC) can reject applicants for a broker associate license on the basis of convictions for felonies and certain misdemeanors as well as deliberate untruths or omissions made on their application (among several other reasons).

In South Dakota, the starting real estate license is called a “broker associate” license. This can lead to some confusion because the term “broker” denotes a more advanced license in the majority of states. In South Dakota, it’s simply used to refer to the role of a real estate agent or salesperson.

Note: For the purposes of the above license eligibility requirements, failing the real estate exam is not counted as a rejection or revocation. This means that you won’t be prevented from applying again on this basis within a year of this rejection.

Step 2: Complete the Mandatory Pre-Licensing Education

In addition to the general requirements outlined above, there are certain educational prerequisites you’ll be expected to meet in order to be able to apply for a South Dakota real estate license.

In particular, you’ll be expected to complete a minimum of 116 hours of pre-licensing education that’s been approved by the SDREC per SDCL 36-21A-30.1. It doesn’t matter if you complete these hours through online courses or in a classroom setting as long as they’re done with an approved real estate instructor/course.

Once you complete this coursework, you’ll receive a Certificate of Completion that you must present at the exam site in order to take the state licensing exam.

Step 3: Pass the South Dakota Real Estate Exam

The next step you’ll need to complete is to pass the South Dakota real estate exam. This 4.5-hour exam, which is administered by PSI, includes 142 multiple-choice questions spread across two sections: a national and a state-specific section.

The national section has 90 questions that you’ll have 150 minutes to complete while the state-specific section has 52 questions you’ll need to answer in 120 minutes. In addition to these scored questions, you’ll also have to complete between five and 10 unscored “experimental” questions.

In order to schedule your real estate exam, you’ll need to head over to the PSI website and make an online reservation as well as pay the $98 exam fee. If this is your first time using the platform, you’ll be required to create an account, after which you’ll be shown step-by-step instructions on how to complete the reservation.

In order to pass, you’ll need to obtain a minimum score of at least 75% on both portions of this exam. Immediately after finishing this exam, your score will appear on screen and a report that breaks down your performance will be emailed to you.

Importantly, you’ll only have 60 days from the date of your passing exam report to complete the rest of the application process. If you exceed this time limit, you’ll have to retake the exam.

Note: You can find out more information about this exam in PSI’s Real Estate Broker Associate Examination Candidate Information Bulletin.

Step 4: Pass the Background Check

In accordance with SDCL 36-21A-151, you must undergo both state and federal criminal background investigations prior to licensure.

In order to do this, you’ll need to request a set of Division of Criminal Investigation (DCI) and FBI fingerprints cards from the SDREC.

After filling them out according to their instructions (including signing and dating the back of each card), you must return them to the SDREC along with a check for $43.25 addressed to the DCI. Applicants generally do this alongside submitting their license application (see Step 7).

The SDREC will then forward these fingerprint cards to the DCI to carry out the relevant background checks. Once complete, the DCI will send the results of these checks back to the SDREC to inform its decision whether or not to grant you a license.

The SDREC states on its website that it recommends completing the fingerprint cards at a fingerprint office or local law enforcement agency to minimize the chances of mistakes (and the delays that would follow).

Step 5: Obtain E&O Insurance

At this point, if you completed all of the above steps, you’d technically be able to submit your licensing application right away. However, the SDREC would only grant you an “inactive” license that wouldn’t allow you to practice real estate until you complete a couple of additional steps.

The first of these steps is to obtain E&O insurance as per the statutory requirement laid out in SDCL 36-21A-119.

This is a type of professional liability insurance that financially protects you from any claims your future clients may make against you for negligence or mistakes you may make while carrying out your professional duties.

You can either obtain this insurance from the state’s official partner, Rice Insurance Services Center (RISC), or enroll in another E&O insurance policy. We generally recommend the former option because it’s more convenient. If you select another provider, you’ll have to submit a certificate of coverage alongside your license application.

Step 6: Find a Qualifying Broker

The final step you’ll need to take before you can submit an application for your real estate license is to find a qualifying broker. This is a licensed real estate professional who supervises and mentors you, ensuring you comply with essential legal and ethical standards.

While it’s a legal requirement for new real estate licensees to work under a qualifying broker in South Dakota, it’s important you don’t treat this as just a rule you need to follow. This is because these real estate brokers provide essential training, support, and access to valuable networks that will help you to learn the industry, avoid pitfalls, and grow your real estate business effectively.

After you choose a broker, you’ll then need to get them to fill out the “Qualifying Broker” section of the application form you’ll complete for the next step.

Step 7: Submit a License Application

After passing the state real estate exam and satisfying all other licensing requirements, you’ll be ready to move onto submitting your license application.

You can do this by mailing a completed Application for License Resident Broker Associate to:

South Dakota Real Estate Commission
217 W. Missouri Ave.
Pierre, SD 57501 

In addition to a $225 application fee, this paper form must also be accompanied by all of the following documents:

• Certificate of Completion for your pre-licensing education
• Your original exam score reports for the licensing examination
• Your completed DCI and FBI fingerprint cards (and a check for $43.25)
• Your E&O Certificate of Coverage

As mentioned above, you must submit your licensing application within 60 days of the date of your passing exam score report to avoid having to retake this test.

Step 8: Application Review

If you’ve managed to get this far, congratulations! With your application submitted and all the other licensing requirements satisfied, in most cases your application should be processed by the SDREC within two to four weeks.

Be sure to take some time to celebrate your accomplishment. You’ve put in a lot of work and effort and deserve a celebration!

Note: If you’re not sure what’s happening with your license and it’s been longer than expected, you can contact the SD Real Estate Commission by phone or email.

South Dakota Real Estate License Renewal

In order to keep your license valid and continue working as a real estate sales agent, you’ll need to renew your license every two years.

In order to renew your broker associate license, you must first complete a minimum of 24 hours of continuing education (CE) with at least 12 hours in the following mandatory subject areas:

• Real Estate Contracts
• Real Estate License Law
• Fair Housing
• Ethics
• Environmental Issues
• Antitrust
• The Americans With Disabilities Act
• Brokerage Services

Additionally, all newly licensed broker associates must complete a total of 60 hours of post-licensing education spread evenly across two “post-license periods.” This means you’ll have to complete 30 hours of post-licensing education in each of these two periods.

When you first get your license, you’ll enter Post-License Period 1 – a time that lasts until the end of the next license year. You’ll then enter Post-License Period 2, which starts on Jan. 1 of the following year and lasts for two more license years.

We always encourage our readers to think of the post licensing course they take as an investment in their future career — higher quality, more reliable course content is a central part of ensuring you continue to grow professionally.

South Dakota Department of Labor and Regulation

Mailing Address:

South Dakota Real Estate Commission
217 W. Missouri Ave.
Pierre, SD 57501

Phone: (605) 773-3600

Fax: (605) 773-7175

Email: dlr.realestate@state.sd.us

Website: https://dlr.sd.gov/realestate/default.aspx