How to Become a REALTOR® in Iowa in 9 Steps

Submitting a background check should be done before any other part of the licensing process because it takes so long to complete. You will submit a fingerprint card, signed state and federal waivers and payment to the Iowa Real Estate Commission (IREC) through the Iowa Professional Licensing Bureau (IPLB)’s online portal.

Iowa Real Estate Commission (IREC)– The IREC is a government agency that: issues real estate licenses; conducts background checks on license applicants; maintains education requirements; monitors agents, brokerages, agencies and firms for legal compliance; and creates policies and regulations that are passed into state law. The IREC is made up of seven members who are appointed by the Governor and approved by the state Senate. 

Iowa Professional Licensing Bureau (IPLB)– The IPLB is the government agency that issues and renews professional licenses for a number of regulated industries, including real estate. The IPLB maintains the roster of approved pre-licensing courses, continuing education courses and course providers approved by the IREC. The IPLB does not administer real estate licensing exams.

A criminal background check is required by Iowa law for everyone applying for a real estate license. It can take 8-10 weeks to complete as the search goes through the Iowa Division of Criminal Investigation, the Federal Bureau of Investigation, Iowa Courts Online and the Iowa Sex Offender Registry. It does not need to be complete for you to work on the other steps in the licensing process. Once the background check is complete, it is only valid for 210 days so use that as your deadline to complete the other licensing requirements.

You will need to disclose any serious misdemeanor convictions, aggravated misdemeanor convictions or felony convictions. Any convictions of operating while intoxicated (OWI) must be disclosed. In this case, a conviction is defined as a guilty plea, a deferred judgment prior to discharge and/or a finding of guilt by a judge or jury. All of your convictions must be disclosed, regardless of when they happened or whether your record has been expunged. 

If you were a minor at the time of conviction, you may have a little leeway. Most minor rulings are called an adjudication (instead of a conviction) and are outside the IREC’s inquiry. However, in some cases, a minor can be convicted and charged as an adult. If you’re in doubt, it is always better to disclose. All information in your background check is kept private and protected.

There is a $51 fee for the background check. You have two options for paying it: pay online or pay when you submit your background check packet. If you decide to pay online (which is faster than mailing payment), you will receive an email from the IREC after you submit your completed packet with a link to their payment portal. If you prefer to pay with a personal check or money order, you will send it in with your completed background check packet.

1. Create an account with the IPLB
2. Request a general background check packet from the IREC through the IPLB online portal
3. Once you receive your packet in the mail, schedule an appointment with an authorized fingerprinting service, like the local police department (they may charge you a separate fee). 
4. Fill out the fingerprint card completely and fill out both waivers. If you are paying with a check or money order, you will send it in with the completed packet.
5. Make a copy of all documents for your own records
6. Mail or deliver the completed packet to the IREC: Iowa Real Estate Commission, 200 E Grand St., STE 350, Des Moines, IA 50309
7.  If you are paying online, you will receive an email regarding payment once your packet has been reviewed. 

When your background check has been completed, you will receive an email with the results.

You should start interviewing brokerages once you’ve submitted your background check. Don’t think of this as a typical job interview, it’s much more than that. It’s a partnership interview! This is your time to learn more about what your career as a real estate agent could look like. 

What is a brokerage?

Brokerage- A brokerage is an agency of real estate agents headed by a broker or multiple brokers. An agent must be signed on to a brokerage in order to obtain a real estate license in Iowa. A broker manages the firm, trains agents and staff, maintains errors and omissions insurance and some provide additional services for agents such as marketing, coaching, and financial services (sometimes at additional cost). Brokers earn a percentage of each agent’s commission in return for these services.

A brokerage can be as small as one agent working for a broker or it can be a large company or international franchise with multiple brokers and hundreds of agents. 

A broker is also licensed by the state and oversees an agent’s deals. Brokers in Iowa are required to work for two years as a licensed real estate agent, complete 60 hours of broker courses and pass the broker’s exam to earn a broker’s license. 

There are some key differences between an agent and broker: brokers can work as agents, but agents can’t work as brokers; brokers can work independently for themselves but agents must be part of a brokerage; brokers have more extensive real estate education; brokers can form agencies and hire agents.

How do you find a brokerage?

This is where your network comes into play! Talk to friends, family and even friends of friends to find out what brokerages are operating in your area. Have you bought or sold real estate in the last few years? Think about the agent you worked with and the brokerage they were a part of. 

Who has the best reputation in town? Who is growing and expanding? Who is advertising the most effectively? Most agents start with the offices that are closest to their home and who they have worked with in the past. When you sat down to talk to current agents about life as an agent, they would have given you a good idea of what the brokerages they work for are like. Who stood out to you? 

What should you consider when choosing a brokerage?

There is a lot you need to learn about a brokerage before joining one. It can be easy to fall for slick presentations without actually finding out more about what the brokerage can offer you. Don’t forget, you’re an entrepreneur looking for the right partnership to help you succeed. These are some of the topics you should be considering when interviewing brokerages:

• Coaching and training- You will need a comprehensive training program for your first year as a new agent. 
• Support services– Some brokerages offer limited virtual support and some offer end-to-end business support for every step of a deal. 
• Market share– The biggest player in town may not be the best fit for you, but you still want to be with a brokerage that does well in the local market.
• Reputation– What is the perception of the brokerage? Talk to friends, family and other industry professionals to find out what kind of reputation the brokerage has in the community.
• Culture– What kind of place is it to work? Do you like the other agents and brokers? Do you mesh well with the company’s personality? Do the vision and mission align with your own beliefs? 

What questions should you ask when interviewing the brokerage?

Your brokerage is essential to your success as an agent. Walk into your meetings ready to ask questions and dig deep into the agencies’ culture and business support. A good broker will answer these questions thoroughly and honestly so that you have a clear picture of how the company operates. 

Training New Agents

• Does the brokerage offer new agent training? If so, what does it look like?
• Will you be working with someone who will be a mentor/trainer/coach? 
• What tools and systems does the brokerage provide? How will they train you to use them?
• What kind of costs are associated with training?

Brokerage Culture

• What kind of team culture is there? Is it a collaborative environment or does everyone work independently?
• Are there team meetings? If so, what do they look like and will you be expected to attend?
• What type of agents work there- hobbyist or full-time?
• Does the brokerage have a support staff to assist agents?

Brokerage Brand

• Is the brokerage part of a bigger brand? 
• What are the benefits of working for a national brand? What events or trainings does the national brand offer? 
• What kind of extra tools and support do the larger brokerages offer?
• What is the advantage of working for a smaller, independent brokerage?

Cost & Commission

• What are the fees and costs associated with being part of the brokerage?
• What kind of monthly costs  education, training, desk fees, etc.) are there?
• What does the brokerage cover and what will you pay for?
• What is the commission structure?
• What other services do you offer: marketing, coaching, finance?
• Do you have the ability to grow with commission?

Keep in mind that some brokerages may entice you to join with low upfront costs and appealing commission splits. Don’t “chase the money” when choosing a brokerage. Some may offer you better commission splits, but won’t cover as much as your business costs, provide free continuing education or access to support staff. Some may even offer you 100 percent commission split (meaning you keep all of your commission) but will then expect large monthly fees for office space and business costs which will eat into your profits.

Make sure you have answers to every question you ask and weigh out what means the most to you, rather than just choosing the brokerage with best commission splits. Is it important for you to have a support team in your first year or would you rather be independent? Do you want to work for a national franchise or a small local agency? What kind of company culture is important to you? What kind of tools and resources will the brokerage provide to ensure your success? 

The IREC requires everyone to take a 60-hour course on real estate practices and law before sitting for the licensing exam. The course can be taken either in-person in a traditional classroom or online and costs vary depending on which option you choose. 

What is the Pre-Licensing Course?

The Iowa real estate pre-licensing course is a 60-hour series of classes that covers an extensive overview of everything you need to know before becoming a real estate agent. It covers everything from real estate law to finances and taxes to zoning regulations to property management.

You should only take courses that are taught by accredited instructors and approved by the IREC. If you complete a course taught by an unapproved provider, your completion will not be considered valid and you will not be able to sit for the licensing exam. 

You can find a list of approved courses and course providers on the IPLB’s site. 

Which Pre-Licensing Course Works for You?

Here is what you should consider when deciding how to take the pre-licensing course:

• How flexible is your schedule?
• What kind of support network do you have?
• Do you know anyone who has taken the course before?
• How much are you able to spend?
• What is your learning style?
• Are you new to real estate?

How much time do you have to take the course? In-person courses are held on set days at set times with little flexibility. This option works best for anyone with an open schedule and the ability to commit at least a week to take the course full time. Online courses offer more flexibility to anyone who already has a job, provides child care or has other commitments. Online courses can take up to six months to complete. 

What kind of support do you have? The 60-hour course takes up a significant amount of time. The in-person courses can take 1-6 weeks to complete and the online courses can take up to six months. For all intents and purposes, it’s like taking on another job. You will need to rely on your support network in order to focus on and complete the course.

Do you know anyone who has taken the course? If you have friends, family or network connections who have taken the course before, reach out for advice. They can share their experience with you and give you advice for studying and exam prep. 

Do you have the budget for the course? Remember when we talked about the real costs of real estate? This is the step that requires to most upfront investment. The cost of the course can vary based on how you take it and who you take it with. But you should be prepared to spend somewhere between $300-$500, which may or may not include extra learning materials. 

What is your learning style? You have options when it comes to how you take the course- so choose the one that fits your learning style. If you do best with an instructor for guidance and classmates to study with, take the course in-person in a classroom. If you like to learn independently and at your own pace, the online option would work for you. 

Are you completely new to the world of real estate? If you’re just starting to learn about the industry, an in-person course might be the best option so you can learn from an instructor and classmates. If you are familiar with real estate or have family members who work in real estate, you may feel comfortable taking the course online.

How to Take the Pre-Licensing Course

There are two options when it comes to taking the 60-hour course: an in-person course or an online course. There pros and cons to both and several factors that will determine the best course option for you.

In-Person Pre-Licensing Course

If you choose to enroll in an in-person pre-licensing course, there are two different schedules available to you. You can take a weekday course or a weekend course. Weekday courses are usually held for 5-8 consecutive business days and run for about eight hours a day. Weekend courses typically take place on Friday evenings and all day on Saturdays and Sundays- this can vary by location, however. 

If you work a full-time job, provide childcare or otherwise have commitments during the week but still want to enroll in an in-person course, the weekend option may work best for you. 

The pros of an in-person course include instructor assistance, a faster pace so the course is completed more quickly and learning materials are included in the cost of the course. However, in-person courses offer less flexibility and usually cost more than online courses. 

Online Pre-Licensing Course

The online course offers the most flexibility and the most time to complete. Per Iowa law, you can take up to six months to complete your 60-hour course. However, extensions are not allowed for any reason. If you are not a self-starter or have a problem with procrastination, the online course may not be the best option for you. 

Online classes typically cost less than an in-person class but usually do not include supplementary materials such as workbooks and practice exams. These are available for purchase from the course providers. 

Online courses are much more flexible, you have more time to complete it and they cost less. But, learning materials are not included and there is usually no instructor assistance. An online course works best for anyone who already has a full-time job, but an in-person course might work best for someone who is completely new to the world of real estate.

The Iowa Association of REALTORS® is highly recommended as a course provider and offers both in-person and online courses. Many regional realty and real estate associations will direct you to the IAR® for courses. 

Many brokerages offer courses under the education branch of their companies. There is nothing wrong with taking a course through a brokerage. They are usually taught by experienced, licensed agents- but these agents are employed by the brokerage. 

What to Do When You Complete the Course

Every course has its own requirements for completion- many will give you an exam at the end to test your knowledge or will require you to take an assessment during every module. Once you’ve completed the course requirements, you will receive a certificate of completion. It usually only takes a day or two to receive. Once you have your certificate, you can schedule your licensing exam. 

Once you complete the 60-hour pre-licensing course, you can register to take the licensing exam. Do not register for the exam until you receive your certificate of completion from the IREC. It typically only takes a day or two. You must have your certificate of completion printed out to present at the testing center.

It is highly recommended that you take the licensing exam as soon as possible after the completion of the 60-hour course. The material will still be fresh in your mind, especially if you completed exam prep. 

The test is administered by an independent company, PSI Examination Services. They have testing centers in three locations across Iowa.  You can also take the exam online through PSI which will be proctored live by a virtual test administrator. The licensing exam costs $95 each time you take it. There is no limit to the number of times you can take the exam. 

What Does the Exam Look Like?

The licensing exam is broken into two parts: the national section and the state section. The national section is 80 questions and you are given two hours to complete it. The state section is 40 questions and you are given one hour to complete it. Every question on the exam is multiple choice and you must score a 70 percent or higher on both sections to pass. Some questions do require math and you are allowed to use a simple calculator. 

PSI has an exam bulletin that will give you a complete overview of what will be on the exam, tips for exam prep, how to schedule the test, what you are allowed to bring into the testing room and other helpful information.

How Do You Study for the Exam?

If it’s been awhile since you’ve been in school regularly taking exams, you may be wondering how to study for a three hour exam. Don’t sweat it! If you pay attention during the 60-hour course, you should be prepared for the exam. The exam is entirely multiple choice which should help make it easier- just use the process of elimination for questions you are unsure of. 

Some course providers will offer exam prep. For an in-person course, this might be taking a practice exam on the last day of class. An online provider may give you access to study guides and a question bank for an extra charge. There are also free study tools available online, such as Quizlet, a flashcard building website. 

The key areas to focus on are:

• Take practice exams. This is one of the best ways to study so you can familiarize yourself with how the test is styled. There are many practice tests available online.
• Study the vocabulary. The pre-licensing course will introduce you to a lot of new key terms and phrases. Make sure you know all of them by using flashcards to help your memorization. 
• Know the national laws. A significant portion of the exam will test you on your knowledge of national housing laws. Make sure you know them! 
• Take the exam ASAP. Try to take the exam right after you finish the pre-licensing course so the material will still be fresh in your mind.

The IREC requires all license applicants to complete three 12-hour courses, in addition to the 60-hour pre-licensing course. These three courses are not required to be completed before you take the licensing exam. In fact, most people take the additional courses once they’ve passed the exam. 

The three additional courses must be taken in-person in a classroom- so no online options will count toward completion. You can find the list of approved providers of the additional courses on the IPBL site here.

The three additional courses the IREC requires applicants to take cover practical knowledge topics you will need to know as an agent. Each of these courses ranges in cost from $95-$140, depending on where you take them. Each of the pre-licensing course providers listed above offer the 36 hours of additional courses as well. You can take the courses in any order and you will receive certificates of completion, just like your pre-licensing course. All of these certificates will be needed for your license application.

The three 12-hour additional courses are: 

Buying Practices

• The buying process
• How to qualify buyers
• Financing options
• How to write an offer
• Agent responsibilities
• Closing services

Listing Practices

• How to run a Competitive Market Analysis (CMA)
• How to estimate new proceeds
• How to create listing presentation
• How to write listing contracts
• How to market and service sellers
• How to present an offer
• Agent responsibilities
• Closing services

Developing Professionalism and Ethical Practices

The ethics course is discussion-based and addresses some of the ethical problems agents can face and whether or not ethics can be taught. 

What do I do after the additional courses?

The additional courses should be the last step in the pre-licensing process. Once you’ve gotten your background check, taken the pre-licensing course, passed the licensing exam and completed the 36 hours of additional courses, you are ready to commit to a brokerage. 

Remember when you interviewed brokerages at that start of this process? You went in prepared with questions about the support systems they offered, what your first year as an agent would look like and what the nitty gritty financial breakdowns would look like. All of that interviewing should have given you a good idea of which brokerage would be the best fit for you. 

Choosing a brokerage is one of the most important steps in the licensing process. Why? The partnership between you and the brokerage is what will set you up for success (or failure) as a real estate agent. 

Look back at the answers you received to your questions. Choose the brokerage that provides the best answers for you to each of these questions. 

• What type of new agent training will you receive?
• What tools and systems will they provide?
• What costs are associated with training?
• What kind of culture does the brokerage foster?
• Do you have a support staff?
• Are the brokerage’s mission and values compatible with yours?
• What is the commission structure?
• What business costs will you cover and which are covered by the brokerage?
• Do you have the ability to grow?

You have to commit to a brokerage before you can submit your real estate license application. Per Iowa law, no real estate agents can work for themselves and must be part of a brokerage. 

Once you have found the right brokerage for your needs, you can join their team. Before they onboard you as a new agent, they will have to guide you through the last steps of the licensing process.

What is E & O insurance?

Errors and Omissions insurance is, for all intents and purposes, a form of malpractice insurance for real estate agents. It covers claims levied against you by a client if they sue you for negligence due to an error or omission during their interactions with you. If the claim is covered by the insurance company, they will cover the costs of legal expenses and provide legal assistance. 

The IREC requires all brokers, agents, corporations and partnerships to carry uninterrupted E & O insurance – which means any brokerage you work for will also be covered under their own plan. Each brokerage is a little different in how they will guide you to choose E & O insurance: 

• Some brokerages will recommend carriers and point you in the right direction so you can purchase your own policy. This should be accounted for as a monthly business expense for you. 
• Some virtual brokerages may recommend you just choose a local carrier but won’t offer you much guidance.
• Some brokerages may automatically enroll you under the company’s E & O plan so you are simultaneously covered as an individual and as a representative of the brokerage.

The IREC also recommends their own carrier, RISC Insurance Services Company, LLC, to anyone seeking a carrier. More information on E & O insurance requirements can be found on their site.

Will I ever need to use E & O insurance?

Even the most responsible and trustworthy agencies can be sued by a dissatisfied client. The term ‘negligence due to an error or omission’ can cover a few different scenarios:

• If a buyer feels misled about a property
• If an agent gives incorrect tax or legal advice
• If an agent fails to disclose an issue with a property
• The agent fails to fulfill the contract 
• If the agent fails to take action on something they should have

You may never end up actually using your E & O insurance – which would be a good thing! But you must be protected per Iowa law. Once you and your brokerage decide on an insurance provider, you will need to enroll immediately. Proof of coverage is required for your license application.

What do I need for my real estate license application?

Rundown this checklist to make sure you have everything you need to submit your license application. 

• Complete your background check 
• Have proof of completion certificate for: 
  • 60-hour pre-licensing course
  • 12-hour buying practices course
  • 12-hour listing practices course
  • 12-hour ethics and professionalism course
• Have pass notice from PSI Examination Services for licensing exam
• Commit to a brokerage
• Proof of E & O insurance
• Pay the $125 license fee

You will typically submit the application alongside your new brokerage because a signature from the employing broker is required. 

Don’t worry about having a proof of completion for the background check. The completed background check is automatically sent to the IREC and should be in your IPLB portal already. You will submit all parts of your application online through the IPLB portal using the login you created to start your background check.

It typically takes five days for the IREC to review applications. Once it’s reviewed, you will be notified that you are officially a licensed real estate agent in the state of Iowa! 

What is a REALTOR® and an MLS?

Joining your local MLS is a crucial step in your road to success as an agent. The MLS is an essential tool that all successful agents use and it is maintained by the local real estate association. 

Iowa Association of REALTORS® (IAR)– The state association that serves real estate professionals by providing continuing education, ethical guidelines, legal counseling, political advocacy and health benefits to its members. Membership to your local association includes membership to the state and national associations. Only members of the local, state and national associations may use the title REALTOR®. 

National Association of REALTORS® (NAR)– The national association that serves real estate professionals by providing continuing education, ethical guidelines, legal counseling, professional development and political advocacy. Membership to your local REALTOR® board includes membership to the state and national associations.

Multiple Listing Service (MLS)– An MLS is an information-sharing platform provided to real estate agents by the local association of REALTORS®. It is a private platform where local agents looking for buyers or sellers can publish listings. Only members of the local association have access to that region’s MLS. An agent may belong to more than one association and may, therefore, have access to multiple MLS’s. An MLS also aggregates information for third-party listing sites as a benefit to member agents.

How to Become a REALTOR®

There are 17 regional associations of REALTORS® in Iowa, so your area is likely covered by one. Your local association is the first step to becoming a member of the state and national associations. To be eligible to join: you need to be a licensed real estate agent in Iowa, be sponsored by a broker who is a member of the association and pay a fee. Membership to your local association includes membership to the state association (Iowa Association of REALTOR®) and the national association (National Association of REALTORS®). 

The cost of membership can vary by location but you can expect to pay around $765-$1035 upfront. This includes the entrance fees split among the three associations and MLS and then dues that will go to the three associations. From there, you pay annual dues to your local association, with portions of it going to the state and national associations. Your annual dues will be prorated if you join after January. 

Why should I join a real estate association?

You may be adding up all of the monthly fees and asking yourself, “Why should I join an association?” There are distinct professional advantages that come with being a REALTOR®. The most tangible one is access to the region’s MLS. That is an invaluable tool that will help you succeed as an agent. There is also an element of professional prestige that comes with the title REALTOR®. The associations all maintain codes of ethics that members must abide by which tells clients that you are held to a higher standard of professionalism and integrity than someone who is not a REALTOR®.

All associations also offer leadership and professional development opportunities through volunteer work, committees and groups within the organization and leadership positions. 

There are other professional benefits as well:

• Discounts with businesses like Dell, Sprint, UPS, Experian, Office Max, Office Depot, Taxbot
• Travel discounts with Hertz and participating hotels
• Free legal hotline
• Political representation through the Iowa REALTORS® Political Action Committee (RPAC)
• Continuing education 
• Personal insurance 

While membership to the realty associations is not technically required to work as an agent, it is strongly recommended for your professional success. 

How do I join the Association of REALTORS®?

To be eligible for membership, you must be a licensed agent, be sponsored by a broker who is already a member and be ready to pay the entrance fees and annual dues. You can find your local association here:

Find Your Local Board

All boards have an application you can fill out, which will ask for your licensing information. Your sponsoring broker will have to sign off on the application as well. All the boards have fee schedules on their sites as well, so you will know exactly how much is due right away in fees. Send in your application, along with your dues, and the board will let you know when you are accepted as an official REALTOR®. 

How to Succeed in Your First Year as an Agent

So you obtained your license, joined your local MLS and became a REALTOR®. Congratulations! 

Now what?

Now, it’s time to map out your first year as a real estate agent. There’s a reason only 13 percent of agents last longer than five years in real estate. It’s hard to make money in your first year or two as you build your business. Utilize your resources to make sure you are in that 13 percent:

• Use your brokerage as a resource and as professional support
• Take advantage of your new network 
• Use professional tools
• Go in with your eyes wide open

Your brokerage should be your biggest source of professional support in your first year (and beyond). If you choose one with a strong training program for new agents, they should set you up for success with the education and professional tools you will need. 

Take advantage of your new network– you have a business to build! Real estate is a word-of-mouth industry- it’s all about referrals and who you know. Take advantage of your new professional network through your MLS and real estate associations. Find a mentor who can guide you through the challenges you’ll face in the first year. 

Use all the resources you can find to help you prepare. Try this online video course that covers everything from budgeting to developing a lead generation plan to creating a business plan and more. 

Go in with your eyes wide open. Your first year will not be easy. Most agents make less than $10,000 their first year in the business. It takes time to build up a referral-based business and you’ll be spending money on business needs. Make sure you’re not caught off-guard by going into your first year informed and ready to take on the challenges you will encounter as a new agent.

The real estate licensing process in Iowa can seem like a long one. It can take up to a year just to get your license and join a real estate association. However, the process is made easier by following a guide that breaks down each step and all licensing requirements. Use your checklists, take advantage of your support system and stay organized as you move through the process of becoming a REALTOR® in Iowa.