From its rolling prairies to its majestic Badlands, South Dakota is an attractive place to live—and an even better place to begin your journey as a real estate professional. But in order to connect residents of the Mount Rushmore State with the properties of their dreams, you’ll need to first get your real estate license.
And that’s where we come in. Follow these six easy steps, and you’ll be launching your career in South Dakota real estate in no time.
How to Become a Real Estate Agent in North Dakota
Before we get started, we should note something relatively unique about the industry in South Dakota. The majority of states refer to entry-level real estate licensees as “salespersons” or “agents,” and only use the term “broker” for an advanced license level that qualifies real estate professionals to own a brokerage firm. But in South Dakota, entry-level licensees are called broker associates, and someone who’s reached the next level of licensing is known as a responsible broker.
With that out of the way, let’s dive into the steps you’ll take to become a broker associate in a little more detail. Before long, you’ll be helping clients buy and sell Colonial revival homes in Sioux Falls, ranch-style homes in Rapid City, and Craftsman houses in Aberdeen.
How Much Does It Cost to Get a Real Estate License in South Dakota?
It costs approximately $1,400 to get your real estate license in South Dakota, including your prelicensing education. Some of the costs are fixed, such as the state’s licensing and exam fees, and others vary.
While you don’t need a college degree to become a real estate agent in South Dakota, you must complete the state-specific licensing process. The price of the required 116-hour prelicensing course (and optional exam prep materials) will vary depending on the provider you choose.
Prelicensing Course:
$699-$1,295
License Application:
$225
Exam Registration:
$98
Exam Retake:
$98
Background Check/Fingerprinting:
$43.25
Errors & Omissions Insurance:
$16-$187
Total Costs:
$1,081-$1,946
(South Dakota real estate license costs as of October 2023)
How to Get a South Dakota Real Estate License in 6 Easy Steps
Determining Your Eligibility
Before you begin, let’s make sure you’re eligible. South Dakota requires those seeking a real estate sales associate designation to:
- Be at least 18 years old
- Be a United States citizen or lawful permanent resident
- Not having a conviction for a felony or a misdemeanor involving moral turpitude
If you have a criminal record, you may still be able to become a real estate agent in South Dakota. Applicants can determine their eligibility before going through the licensing process by reviewing the Denial of application-Reasons section on the South Dakota Real Estate Commission (SDREC) website. The commission may deny licenses for reasons such as unpaid judgments or misstatements. You’ll need to disclose any previous convictions on your application as well as submit fingerprints for a background check.
What If You’re Already Licensed in Another State?
If you are a licensed attorney or have a degree in real estate, you may be able to waive some of your licensing requirements.
South Dakota doesn’t recognize formal reciprocity with other states. However, the state may waive some of your education requirements or issue equivalent licenses to those moving into the area. Agents must submit a certificate of licensure from their prior state showing good standing, a fingerprint background check, evidence of having passed the state portion of the exam, and a non-resident application.
Visit the SDREC website for more information.
Real Estate License Reciprocity & Portability: A State-by-State Guide
Ready to learn more about how to become a real estate agent in South Dakota? Here are the steps you’ll need to follow.
1. Complete a 116-hour Prelicensing Course
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Cost: $699-$1,295 -
Time commitment: 3-7 weeks
Prelicensing courses kick off your real estate career, and you’ll have your choice of completing them online or in person. Your choice of course format will depend on your learning style and what suits your schedule best.
The amount of time you’ll need comes down to how much class time you allot per week. You can complete all 116 hours online; those who study at a faster pace will finish in a shorter amount of time. If you approach it like a 40-hour workweek, you could finish in less than three weeks.
Prelicensing courses will often include extra features like exam prep, instructor support, or career resources, so it’s important to weigh these add-ons as you shop for providers. You can find a list of state-approved schools here.
Regardless of the school you choose, the state of South Dakota requires 116 hours of coursework before sitting for the licensing exam. You’ll learn:
- Property ownership
- Land use controls and regulations
- Valuation and market analysis
- Financing
- General principles of agency
- Property disclosures
- Contracts
- Leasing and property management
- Transfer of title
- Practice of real estate
- Real estate calculations
- Duties and powers of the real estate commission
- Licensing requirements
- Statutory requirements governing the activities of licensees
- Agency relationships and property representations
- Fair housing and other governmental regulations
- Handling money
- Training and supervision of licensees
- Property types
You’ll need the help of a highly rated South Dakota real estate school to get through this weighty material. Most people choose a real estate school based on the cost and the educational format of the course. Here are the most popular options in terms of course design.
In-person Classes
Wherever you live in South Dakota, you should be able to find a real estate school that meets in person during regularly scheduled sessions.
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Livestream Classes
Classes that meet online at scheduled times are usually broadcast over Zoom (or another videoconferencing tool).
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Self-paced Online Classes
On-demand real estate classes are extremely popular for those wanting to become real estate agents in South Dakota quickly. The course material may be presented in a series of slides, videos, and interactive content.
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After you have completed your coursework, you must pass the course’s final exam. This non-proctored course exam will test your newfound knowledge of real estate law and principles. Once you’ve passed, you will receive a certificate of completion via email.
2. Schedule & Pass the South Dakota Real Estate Broker Associate Licensing Exam
Cost:
$98
Time to Complete:
7 hours
Format:
Computer-based, 168 questions
Bring to the Testing Center:
Two forms of identification, including one current government-issued photo ID with signature
Passing Grade:
Angoff method
After completing your prelicensing education and test, you can schedule your associate broker exam with the state. In order to begin scheduling, you’ll need to register with PSI, the company that administers the exam. The cost of the exam is $98.
How to Study for the Real Estate Exam: Tips & Strategies
Testing sites for the South Dakota real estate exam are located in Madison, Rapid City, and Sioux Falls. You should arrive at the testing site 30 minutes early and bring two forms of identification with you, including one current government-issued photo ID that includes your signature. The PSI candidate handbook outlines the types of government-issued identification they’ll accept. There’s also a lengthy list of items you’re prohibited from bringing to the exam room (including common items like hats, pens, and cell phones).
The South Dakota Real Estate Broker Associate Licensing Exam is an in-person, proctored test administered via computer. The exam consists of three parts that review state and national real estate laws, along with a simulation exam. There are 157 multiple-choice questions altogether: 100 questions in the national portion and 57 additional questions in the state portion.
South Dakota’s Testing & Grading Procedures
While the national and state portions are multiple-choice questions similar to other state licensing exams, the simulation portion consists of 11 questions consisting of “information gathering” (IG) and “decision-making” (DM) questions. Each problem will have a designated primary issue and property type; the IG questions test you on gathering all relevant information, and the DM questions are for making judgments or decisions based on the issue and property type.
You will have 420 minutes, or 7 hours, to complete the entire exam. The national portion is 150 minutes (2.5 hours), the state portion is 90 minutes (1.5 hours) and the broker simulation section is 180 minutes (3 hours).
South Dakota has a unique way of grading its exams. The minimum score required to pass the national portion administered through PSI is determined using a process known as the Angoff method, in which subject-matter experts estimate the difficulty of each item on the examination for the “minimally competent practitioner” (MCP). Test designers average these out to determine the minimum passing score, which represents the amount of knowledge an MCP would likely demonstrate on the examination.
How to Study for the Real Estate Exam: Tips & Strategies
You’ll get your scores immediately upon completing the exam. A passing score will allow you to move forward with the licensure process. If you fail one or more portions of the exam, though, you must schedule an exam retake for those portions. You must keep and submit all score reports with your application within 60 days of the date you passed your last portion of the exam.
Unlike most other states, South Dakota allows candidates to take each portion of the exam separately, although you do have to pay the same amount for each exam session. The examination fee is $98 if you opt to take the national, state, and simulation exams, but if you take them separately, it is $98 each time. You pay by credit card, cashier’s check, or money order when you register.
3. Complete a Background Check
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Cost: $43.25 -
Time commitment: 1-2 weeks
The South Dakota Real Estate Commission requires that all applicants submit to a background check before they can become a licensed real estate broker associate in South Dakota. To begin this process, request a set of Division of Criminal Investigation (DCI) and FBI fingerprint cards from SDREC using this request form.
Return these cards to the commission with your completed application and a separate check for $43.25 made payable to the DCI. Be sure to sign and date the DCI fingerprint card on the back to avoid having the cards returned for signature and prolonging your application completion. For the best results, complete the fingerprinting at a law enforcement agency or fingerprint office.
4. Find a Sponsoring Broker to Hire You
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Cost: Free -
Time commitment: 1-2 weeks
To hold an active real estate license in South Dakota, you must affiliate your license with a responsible broker. A broker has received additional training, worked in the industry for at least two years, and passed the broker’s license exam.
Real Estate Broker vs. Agent: A Head-to-Head Analysis
Finding a broker to work under will feel like applying for a job. Here are some questions to consider during your broker search:
- What is their reputation, both locally and nationally?
- What kind of real estate agents are they looking for?
- Are they technologically advanced and up to date with the latest systems?
- How do they support their agents with education and training?
- What kind of commission structure do they offer?
- Do they offer benefits?
- Do they provide agents with leads and marketing material?
- Is there room to grow with the brokerage?
As mentioned above, you must be employed or under contract with a sponsoring broker to activate your license. Your sponsoring broker must certify your license application form in order to move your license into an active status.
Compensation Considerations
Once you’ve landed some broker interviews, you’ll want to ask each broker about the split (or how you and the brokerage will divide sales commissions). You’ll find that some brokerages will ask for a 50-50 split on commissions. Usually, brokerages that offer an even split will not charge monthly desk fees.
As you evaluate your options, remember that, as a commissioned salesperson, your income entirely depends on your abilities and effort. Some brokerages may offer you 70% of your commissions, a ratio that may rise to 100% after you’ve met a specific sales goal (or cap) for the year.
It’s important to be realistic about your earning potential in the first few months. It takes time to launch your new business. Some new agents choose to work part time so they can still bring in additional revenue as they’re learning the ropes. And if your brokerage does charge fees, you’ll have to pay them regardless of whether you’re closing deals or not.
5. Obtain Errors & Omissions Insurance
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Cost: $16-$187 -
Time commitment: 1 day
South Dakota requires all active licensees carry errors and omissions insurance, also known as professional liability insurance. It typically protects brokerages and individual agents from getting sued by a client if they make a mistake in a real estate transaction. It’ll cover the legal, defense, and court costs related to a claim.
You can use any insurance agency to find the E&O policy that works for you, so it’s best to take some time and research your options. You may also want to check with your sponsoring broker to see if you are covered under a firm policy at the brokerage.
SDREC works closely with Rice Insurance Services Company to provide affordable options, but make sure to check with your principal broker to verify their firm requirements for coverage. In the case of Rice, the current annual premium is between $16 and $187.
6. Complete the Licensing Process
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Cost: $225 -
Time commitment: 2-4 weeks
With all the above tasks completed, it’s time to prepare your materials to apply for that hard-earned associate broker license. This license allows you to handle real estate transactions, including buying and selling properties, as well as managing the rental process.
You must submit your application within 60 days of your passing exam, so it’s important to move forward with the process right away. The broker associate application can be completed via mail or submitted online through the state’s services portal. Include the following items with the form:
- Non-refundable payment of $225 fee
- Original education certification
- Errors and omissions certificate of coverage
- Original score reports from exam
- Completed SD and FBI fingerprint cards and a separate check for $43.25 made payable to DCI
It will take about two to four weeks to process, and you will receive an email informing you of your application approval. Upon successful application review by SDREC, you will be recognized as a broker associate in South Dakota.
How to Become a Real Estate Agent in South Dakota: FAQs
Still not sure about the path forward? Get answers to common questions about how to become a real estate agent in South Dakota below.
Is the South Dakota real estate exam hard?
The time South Dakota allots for candidates to take the real estate license test is twice as long as most other states. But the difficulty of the exam is hard to measure, as the minimum score required to pass the national portion is determined by using a process known as the Angoff method. Be sure to pay attention during your prelicensing course and take studying seriously. If you put in the proper effort, you should pass on your first attempt. Otherwise, you’ll need to pay another $98 to take the test again.
How long does it take to become a real estate agent in South Dakota?
It usually takes prospective agents four to six months to get their real estate license in South Dakota. Most of the time spent getting your license will be in your 116-hour prelicensing course. If you enroll in a scheduled full-time course, you can usually complete your classes pretty quickly.
You might take longer if you decide to work online at your own pace. Self-paced courses, on the other hand, provide you the freedom to fit learning into your busy schedule at work and home. You’ll have to decide how to choose the course that works best for you.
Can I get my South Dakota real estate license online?
Do real estate agents make good money in South Dakota?
It all depends on the number of deals and commission splits, but according to The Close’s salary information database, the average real estate agent in South Dakota makes $64,434.
Whether you decide to commit yourself full time or part time to your new career, here are some important things to know about compensation as you begin your search for a brokerage partner.
- Split: This is how the company you work under will divide commissions between you and your broker. For example, a 50-50 split means that the brokerage and salesperson share the commission evenly. Some may offer you a larger share.
- Desk fee: Some brokerages may charge a monthly fee for access to equipment and support. If you are required to pay a desk fee, you might keep a larger share of your commissions via a better split. But the desk fee is collected whether you’ve closed a sale or not.
- Cap: Some brokerages might offer a cap, meaning once you bring in a certain amount, you’ll get to keep all of your commission.
What are the pros & cons of becoming a real estate agent in South Dakota?
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