All About License Renewal In California

By Ciprian Morariu Published: January 17, 2024

The state of California in the United States is one of the most dynamic and largest real estate markets. It has a desirable climate, a strong economy, and diverse geography which helps in contributing to its real estate appeal. 

To become a real estate agent in California, you must take the pre-licensing courses, clear the real estate examination of California, and apply for a license there. However, you must note that this license that you will get holds a validity Limited period and must be renewed as per stipulated rules. The renewal of a license is extremely necessary if you want to keep working as a real estate license in California or any other state of the US. 

In this article, you will learn the importance of renewing, how to renew a California real estate license, and all about the process of it. 

California real estate license renewal

Understanding the Validity Period of a Real Estate License

When we talk about the validity period of a real estate license, it generally means the time frame within which the license is considered. Active and legally allow the license holder to participate in real estate transactions and related activities. However, it must be noted that it is not the same in every state, the rules and regulations regarding the validity of the real estate licensees and its process varies from state to state in the United States. 

What is the Validity of a Real Estate License in California?

Talking about California, the real estate license is here typically issued for four years. Only after this time, the licensees are required to renew their licenses to continue practicing the profession of real estate within legal boundaries. There is a proper process that you have to follow which involves completing specific continuing education requirements and submitting a renewal application form along with fees. This will be discussed in detail further below in the article. 

Why Should You Renew A Real Estate License in California?

The importance of renewing a real estate license can be understood by the mention following points. You must know that it is a legal requirement to renew your license in most jurisdictions in the United States. Therefore, you should prioritise renewing your license at the earliest if not already done.

  1. Ensures continuity of business: you need a valid license to conduct real estate transactions legally. It will ensure that you can proceed to do interrupted business operations, continue representing your clients, facilitate property transactions, and earn commissions through property sales.
  2. Basic legal requirement: to operate real estate operations with an expired real estate license is considered illegal in most US jurisdictions. If you practice without a valid license, you may face fines, penalties disciplinary actions, including suspension and revocation of your license. If you don't wish that upon yourself, then you must be aware of your license expiration date and take action accordingly.
  3. Ensures professional credibility: your credibility as a professional real estate agent will be enhanced if you can provide a valid real estate license in your name. The industry stakeholders like buyer-seller clients, investors, banks, etc., expect to be able to have trust in you as a professional. You will be trusted more to adhere to ethical and legal standards while showing a commitment to your profession, you will be much more wanted to deal with.
  4. Increased marketability: if you have a valid working real estate license, it allows you to actively market your services, join real estate associations, and participate in networking events. Doing this will contribute to expanding your client base and business opportunities. This will in turn enhance your marketability as a professional in the industry.
  5. Risk mitigation: if you don't want to get tied up in legal proceedings and eventually in jail then you must renew your license at the earliest. Why do I say this? If you practice without a valid license, it exposes you to legal risks in case of disputes or a legal challenge. 
  6. Access to resources: you will be granted valuable resources and tools provided by real estate associations, Multiple Listing Services (MLS), and other industry organizations. This accessibility is essential for staying competitive and providing the best services to your clients.

Consequences of an Expired Real Estate License

The consequences of an expired real estate license are usually similar in all jurisdictions with small differentiations. However, if we're talking about California in particular, you can face the following major consequences in case you practice with an expired license.

  1. You can be subject to penalties and serious legal actions if you are caught practicing without a valid real estate license.
  2. You may be issued orders by regulatory authorities, instructing you to stop practicing real estate immediately until the license is renewed. 
  3. Your license to practice can be suspended or revoked. If found you are continuously operating without a renewed license. This can have long-term consequences which can affect your marketability reputation and image in the real estate market.
  4. An invalid or enforceable real estate license will make you face a substantial loss of commission as you will not be legally entitled to receive compensation for transactions completed during the period of your license expiration. This can have substantial effects on your income.
  5. Without a valid license, you are not permitted to legally represent any client interested in doing real estate transactions. This will naturally lead to a loss of business opportunities and put you into legal proceedings that can be very complex and mentally exhausting.
  6. After a license has expired, it is sometimes a cumbersome process to reinstate it. It is because it involves additional requirements such as completing continuing education courses again, paying additional fees, and addressing any outstanding issues. The whole process of reinstatement can be more complicated and time-consuming than regular license renewal.

The whole process of reinstatement of an expired license is more complicated and time-consuming than a regular license renewal process. 

Here is a breakdown of how this process works.

Firstly, you must know that the licenses in California for real estate practice or issued by the California Department of Real Estate. It is the authority responsible for issuing licenses based on how you have performed in the real estate examination, and whether you clear the background checks and other criteria or not. 

The process of renewing an Expired Real Estate License is explained in an easy step-by-step method below for your clear understanding. 

  1. You must first confirm the current status of your real estate license whether it is expired or not if yes, then you'll have to follow the reinstatement process.
  2. In some states, there is a grace period provided after the license expiration date within which you can still renew without facing additional penalties. So you must check if you fall in the grease period or you have exceeded it.
  3. You can choose any CA real estate license renewal course online and must complete the continuing education requirement as part of the renewal process. This includes a 45-hour coursework to make sure you fulfill all continuing education requirements set by the California Department of Real Estate.
  4. The next task is to obtain the renewal application form from the Californian Department of Real Estate website. You can also contact them directly and complete the application form accurately and thoroughly.
  5. In the next step, you must pay the renewal fees as required. However, the fee amount can vary and the Californian Department of Real Estate will specify the amount you need to pay for your specific situation.
  6. You must submit documentation as required. You may be asked to submit additional documentation. In case you have made any changes to your personal information. To prove this, you may need to provide updated details of the same.
  7. In almost all states and even in California background, check is done as part of the renewal process. So you have to comply with any such requirement if applicable.
  8. After you have submitted the renewal application and all necessary documents, you must wait for your renewal process to start this processing time. Every so you must submit your renewal application well in advance of the expiration date.
  9. The last step is to check the California Department of Real Estate’s website and contact them to verify your renewed license status. You must ensure that your license is active and has good standing.

You must note that you must initiate the renewal process of your license as soon as possible. If your license has expired, you may face unnecessary complex legal proceedings that are difficult to get out of.

Renewing Real Estate License in California

What Are the Total Expenses for Getting a Real Estate License in California?

How much is a real estate license in California?

The average expenses to get a real estate license in California range between $500 and $1,000. The costs include license fees, the price of quality state-approved pre-licensing coursework, exam fees, and other minor expenses.  

When you take the pre-licensing course to qualify for a real estate salesperson examination, the cost of the course depends on the provider that you choose. This can range from $120 to $750 approximately. 

Talking about the application fee, you can expect to pay a sum of $60 as an examination fee to the Californian Department of Real Estate.

If you choose for continuing education course from a ghost provider, the cost estimated is relatively low there are some course providers with a package for around $60. 

Getting a background check done is a mandatory criterion for you to get one step ahead in securing your license. Therefore, you must pay a $60 fee directly to the service provider who will do the background check for you.

In the end, the Californian Department of Real Estate’s real estate licensing fee is capped at around $250. 

What Other Expenses are there to consider?

To stay competitive, you may have to pay certain fees that will be worth the cost. However, these below-mentioned fees are not required but are still paid by some for better professional outcomes. 

  1. Multiple Listing Service Fees- it is a database for real estate listings, which is widely used by agents. Access this service cost per month is between $20-$50.
  2. California Association of Realtors fees- the yearly fees come to around $185 with additional fees attached to the application. 
  3. National Association of Realtors fees- it is a non-profit organization where you get a chance to build your expertise and reputation as a real estate professional who has ethics and follows a code of conduct. The be required to become a member is around $150.
  4. Brokerage fees- the broker will charge at the time when an agent like you makes a commission from a sale. The deal is usually 50-50 but can be negotiated if you are a seasoned agent.

Understanding Return on Investment

In the industry of real estate return on investment is often used to calculate the probability of property investment. To calculate this, certain factors are considered such as property, appreciation, cost, rental income, and expenses to know the overall return on the investment made initially. It is expressed as a percentage and is commonly used in the real estate industry to assess the performance and efficiency of a property investment over a specific period. 

In conclusion, the renewal of a real estate license in California is not only a basic legal requirement but also a critical aspect of maintaining professionalism and trust within the community. Therefore, you must prioritize renewing it if you plan to work in this industry for the long run.