Glossary · 16 terms
The vocabulary
The words the authority, the course and the exam all assume you know.
Real Estate License
A state-issued credential that legally authorizes a person to represent others in real estate transactions for compensation.
Salesperson License
The entry-level real estate license that allows you to represent clients while working under a supervising broker.
Broker License
An advanced real estate license that permits the holder to operate independently and, in many cases, supervise other licensees.
Sponsoring Broker
The licensed broker or brokerage that a new agent must affiliate with in order to activate a license and practice legally.
Real Estate Commission (State Agency)
The state government body that licenses real estate professionals, writes licensing rules, and enforces professional conduct standards.
Pre-Licensing Education
The state-required coursework a candidate must complete before qualifying to sit for the real estate licensing exam.
Licensing Exam
The proctored state examination, usually split into national and state portions, that candidates must pass to earn a real estate license.
National Portion
The section of the licensing exam that tests general real estate principles common across the United States.
State Portion
The section of the licensing exam that tests the specific license law, rules, and practices of the state issuing the license.
Continuing Education
The ongoing coursework licensed agents must complete each renewal cycle to keep their real estate license active.
Realtor vs. Agent
An agent is anyone holding a real estate license, while Realtor is a trademark of the National Association of Realtors denoting membership in that trade organization.
MLS (Multiple Listing Service)
A cooperative database where participating brokers share property listings and offers of cooperation with other members.
Fiduciary Duty
The legal obligation an agent owes a client to act in the client's best interest with loyalty, confidentiality, disclosure, obedience, accounting, and reasonable care.
Dual Agency
A situation in which one agent or brokerage represents both the buyer and the seller in the same transaction, which limits full advocacy and requires informed consent where allowed.
Escrow
An arrangement in which a neutral third party holds funds and documents during a transaction and releases them only when agreed conditions are met.
Closing
The final step of a real estate transaction, when documents are signed, funds are disbursed, and ownership legally transfers from seller to buyer.