The real estate industry relies on trust and integrity, and making sure that your real estate business has the right business licenses and permits is a crucial way to demonstrate your trustworthiness. When home buyers and sellers are trying to manage one of the most costly and complex transactions of their lives, they need to know you’re a reliable professional who will keep your promises and provide trustworthy advice. Getting the right business licenses and permits for your real estate business is one of the ways to enhance your credibility and expand your professional influence within the real estate industry.
Starting a business as a real estate agent includes a variety of steps: setting up an LLC, taking any necessary real estate licensing exams, and finding a brokerage to work with as you get started in the profession are a few. But another important aspect of starting your real estate business is making sure you have the right business license. Getting a business license for your real estate business—along with any necessary permits—is one of the most important ways to make sure your real estate business is legitimately able to operate in your state and local municipality.
Here are a few tips on how to make sure you get the right real estate business licenses and permits.
Pass Your Real Estate License Exams
One essential element of becoming a real estate agent is passing the state and national real estate license exams. This is different from getting a business license, but still very important! Getting certified as a real estate professional who knows the required skills and expertise of the trade will give you the credibility to start doing real estate deals.
It usually costs at least $200 to prepare for the real estate license exams and pay for license fees after passing the exams, but these fees will pay off if you’re successful in a potentially lucrative new real estate career. Looking for more information on the real estate license exam and how to prepare for it? Check out the book, “Real Estate License Exams for Dummies.”
Do I Need a Federal, State, or Local License?
Depending on which type of business you own, you might be required to get a business license at the federal, state and/or local levels. For example, you might need a federal business license if you are in a highly specialized or high-liability business such as selling firearms, distributing alcohol or transporting live animals across state lines. Real estate agents typically are not regulated at the federal level (other than paying federal taxes, of course), but it’s still good to do your research to figure out what business licenses you may need.
Different states have different requirements for business licenses—some states might require a formal state-level real estate business license, while others just expect you to set up an LLC or other legal corporate entity for your business.
Local governments also tend to have their own rules and requirements for business licensing, depending on what industry you are in and how you want to operate your business. For example, there might be limits on how you can do business from a home office, and there are often local municipal permits required for various types of business expansion and other business activities.
Get a Business License
Once you have set up an LLC for your real estate business and passed the real estate license exams, you may need to go one step further and get a business license from your state or local regulatory authorities. There are usually some additional fees involved with getting your business license, but it’s worth it! Why? Because licensed real estate businesses have added credibility in the marketplace. Getting your business license can make it easier to be accredited by independent rating agencies like the Better Business Bureau.
Getting your business license also helps show the world that you’re a legitimate real estate professional who cares about doing things the right way. It’s a sign that you’re a serious business owner who’s committed to your community and plans on being in business long-term—not merely a “fly by night” speculator in the real estate market. Real estate buyers and sellers want to work with real estate professionals they can trust! Getting a business license for your real estate company is an essential step in building trust with your customers, regulators and professional colleagues.
Get Local Permits
Getting your real estate business license is not the final step in the journey. Depending on how you want to operate your real estate business, you might need local municipal permits for such things as building a brick-and-mortar location for your business, expanding an existing site, designating street parking for visitors to your business or even putting up an exterior sign with the name of your business on it.
City permits can be complex and time-consuming, so it helps to do your research upfront before you end up in a costly situation. Checking in with your local Small Business Administration office is an easy way to get started on this research.
Order a Business License Research Package
Are you ready to find out more about how to get your real estate business license and otherwise manage the details of local permits for your business? Sign up for an Incfile Business License Research Package! Depending on your location and business type, we can help you determine exactly which business license(s) and permits you need to be in good standing with the regulatory authorities in your area.
Business licenses can be a complex topic, and it can be beneficial to get help from experts. Tell us more about your real estate business and where you’re located, and we can help you get started with a list of essential business license and permit details in just a few days.