To get a brokerage license, you complete pre-licensing education, pass a qualifying exam, submit an application with supporting documents, and clear a background check. The exact path depends on what you plan to broker. Real estate brokers are licensed state by state through a real estate commission, with each state setting its own education, experience, and exam rules. Securities brokers register nationally through the Financial Industry Regulatory Authority (FINRA), using a standardized exam system but requiring sponsorship by a member firm before you can even sit for most of the tests.
If you’re not sure which license you need, the simplest test is what you’ll sell. Physical property means real estate. Stocks, bonds, and other financial instruments mean securities.
Real Estate: Confirm You’re Eligible First
Before paying for coursework, make sure you meet the baseline rules in your state. Four categories cover most of them.
- Age. Most states set the minimum at 18, with a few at 19 or 21.
- Legal status. You must be a U.S. citizen, lawful permanent resident, or otherwise authorized to work in the United States, and you need a Social Security number.
- Experience. Nearly every state requires you to have worked as a licensed real estate salesperson before applying for a broker license. The requirement runs from one to four years of active practice.
- Character. Every state runs a criminal background check. Felony convictions and misdemeanors involving fraud, theft, or dishonesty can disqualify you, and some states also weigh discipline from other professional licensing boards.
The experience rule is where applicants most often stumble. States want proof you were actively working as an agent, not just holding the license. If your agent license sat inactive or lapsed, that time usually won’t count. Keep your transaction history and employment records, because you’ll have to document active practice when you apply.
Complete the Pre-Licensing Education
Every state requires a set number of pre-licensing education hours from an approved provider before you can sit for the broker exam. The required hours range widely, from around 40 on the low end to over 150 in states with heavier curricula. A few go higher once electives are counted. Coursework typically covers real estate law, finance, appraisal principles, brokerage management, and agency relationships.
The provider has to be on your state commission’s approved list. Taking courses from an unapproved school is one of the most common reasons applications get rejected outright, so check the commission’s website before you enroll. A bachelor’s or graduate degree from an accredited institution may cover some of the requirement in some states; the amount of credit varies, so confirm with the commission rather than assume.
Pass the Broker Licensing Exam
With your hours done, you can sit for the broker exam. Most states use a two-part format: a national portion on general real estate principles and a state-specific portion on local laws and practice. You have to pass both. Some states combine the two into a single sitting; others let you take them separately.
Passing scores generally fall between 70 and 75 percent. The national section leans on property ownership, contracts, financing, agency law, and federal rules like fair housing. The state section covers that jurisdiction’s licensing statutes, commission rules, and any local quirks in disclosure or property law.
Fail one section and you usually only retake that section. Most states allow multiple attempts, though some impose waiting periods or require additional coursework after repeated failures. Passing results are typically valid for 6 to 12 months, so don’t drag your feet getting the application in.
Submit the Application
Once you’ve passed, the application itself is largely paperwork. Most state commissions have online portals; some still accept paper. You’ll typically need to assemble:
- Personal identification, including full legal name, Social Security number, date of birth, and current addresses.
- Official transcripts or completion certificates from your approved courses.
- Your official passing exam score report.
- Documentation of your years of active practice as a licensed salesperson, often with employer confirmation or transaction records.
- Fingerprints for a state and FBI criminal history check, usually submitted electronically. Fingerprinting and processing typically runs $30 to $100.
- Disclosure of prior license revocations, suspensions, pending lawsuits, or administrative actions from other boards. Failing to disclose something the commission later finds on its own is far worse than disclosing it up front.
Application fees generally run $150 to $300, and some states tack on a separate license issuance fee. Many also charge a small recovery fund fee, usually under $150, that funds consumer protection against broker misconduct. Pay in full at submission; partial payments stall the review.
Processing typically takes four to eight weeks, longer if your background check hits a snag or the commission sends a deficiency notice. Approved licenses arrive electronically or by mail.
Securities: Get Sponsored, Then Pass the Exams
If you want to broker securities instead, the process runs through FINRA rather than a state agency, and the structure is national rather than state by state. That makes it more predictable in some ways, but the catch is sponsorship: you cannot complete the process without a FINRA member firm hiring you.
The Exams
The entry point is the Securities Industry Essentials (SIE) exam, a 75-question test covering fundamental industry concepts. It has a passing score of 70 and runs one hour and 45 minutes. You can take the SIE without sponsorship, and results stay valid for four years.1FINRA. Securities Industry Essentials (SIE) Exam
To actually register as a general securities representative, you also need to pass the Series 7. That exam has 125 multiple-choice questions, lasts three hours and 45 minutes, and has a passing score of 72. You must be sponsored by a FINRA member firm to sit for it.2FINRA. Series 7 – General Securities Representative Exam Passing both the SIE and the Series 7 gets you the General Securities Representative registration.
Form U4 and Your CRD Record
Your sponsoring firm files Form U4, the Uniform Application for Securities Industry Registration or Transfer, on your behalf through FINRA’s Central Registration Depository (CRD) system. The form collects your employment history, disciplinary record, and other background information. You’ll have to disclose criminal charges, regulatory actions, civil judgments, customer complaints, and financial events like bankruptcies, with a detailed Disclosure Reporting Page for every affirmative answer.3FINRA. Form U4
That record follows you. Most of it is publicly searchable through FINRA’s BrokerCheck tool, so a spotty employment history or prior regulatory trouble is not something you can quietly leave behind.
If You Want to Open Your Own Firm
Holding a personal broker license and running a brokerage firm are separate steps.
On the real estate side, you register the business entity with your state’s secretary of state and then apply for a firm license through the real estate commission. Every brokerage must designate a qualifying broker, a licensed individual with managing authority over all brokerage activity, who is personally responsible for supervising agents and ensuring compliance. If that person becomes inactive, dies, or loses their license, the firm usually cannot operate until a replacement is approved. The designated broker’s required role in the company depends on structure: typically a corporate officer in a corporation, a manager or managing member in an LLC, a general partner in a partnership. Some states require them to hold a minimum ownership stake or require the firm to carry a set amount of errors and omissions insurance.
On the securities side, opening a firm means registering as a broker-dealer with both the SEC and FINRA. The firm files Form BD, which also handles state registration where it plans to do business, and then submits a New Member Application to FINRA, which triggers a review including a staff interview. All qualification exams for the firm’s registered individuals must be completed within 90 days of filing.4FINRA. Applicant Registration Requirements
Insurance, Bonding, and the Costs After Licensing
The license is not the end of your financial setup. Roughly a dozen states require real estate brokers to carry errors and omissions (E&O) insurance, which covers claims from professional mistakes like missed disclosures or bad advice. Minimum coverage in those states typically runs $100,000 to $300,000 in annual aggregate limits. Most brokerages carry E&O even where it’s not required, because one negligence lawsuit can easily blow past those numbers. Where it’s mandated, you’ll usually need to submit a certificate of insurance with your application or renewal.
Some states also require a surety bond. Amounts vary by brokerage type and state, with mortgage brokers generally facing higher bonding requirements than real estate brokers. The bond protects consumers if a broker mishandles funds or violates licensing laws. You don’t pay the full face value; you buy the bond from a surety company for a percentage, typically 1 to 15 percent based on your credit and risk profile.
Renewing the License
A broker license is not permanent. Every state requires periodic renewal, almost always with continuing education attached. Renewal cycles are typically annual or biennial, and CE requirements vary widely. The courses cover updates to real estate law, ethics, and practice management.
Miss a renewal deadline and the consequences escalate. Most states offer a grace period where you can renew late with a penalty fee. Past that, your license may go inactive or expired, which usually means reinstatement by completing CE and paying additional fees. Let it lapse long enough and some states require you to retake the licensing exam or redo pre-licensing education entirely.
Securities brokers have their own continuing education through FINRA, split between a regulatory element assigned by FINRA based on your registration type and a firm element provided by your employer. Missing the regulatory element on time makes your registration inactive until you finish it.
Working Across State Lines
If you want to practice real estate in more than one state, you don’t always start from zero. Many states have reciprocity or mutual recognition agreements. Some offer full reciprocity where you only take the state-specific exam portion; others have partial agreements limited to licensees from certain states; a smaller number have no reciprocity at all. Even in reciprocity-friendly states, you’ll almost always need to pass a state-specific law exam, and sometimes a short state-specific course. Confirm with the commission where you want to expand before assuming your existing license transfers.
Securities licenses are more portable because the FINRA exams are national. You still have to register in each state where you do business, which your firm handles through Form U4 amendments. State registration fees and rules apply, but you won’t retake your Series exams.
Practicing Without a License
Brokering without a valid license is illegal in every state, and at the federal level for securities. Unlicensed real estate activity is typically a misdemeanor for a first offense, with repeat violations escalating to felonies in many jurisdictions. Fines can reach into the tens of thousands of dollars, and commissions earned while unlicensed are generally unenforceable, meaning you can’t sue to collect on deals you brokered without a license even if the transactions were otherwise legitimate.
For securities, acting as an unregistered broker-dealer draws SEC and FINRA enforcement, which can include permanent industry bars, disgorgement of profits, and substantial civil penalties. Even the appearance of acting as an unregistered broker, such as taking transaction-based compensation for referring investors, can draw regulatory scrutiny.