Illinois could ditch “reciprocity,” ease out-of-state licensing

Proposed universal licensing could be a hurdle for real estate agents who straddle Chicago’s border with Indiana, but is “net positive” for industry

Real Estate License Act amendment proposes new process for out-of-state agents
Illinois Realtors' Jeff Baker and @properties' Thad Wong (Illinois Realtors, @properties Christie’s International Real Estate, Getty)

Illinois makes it easier for real estate agents from neighboring states to become licensed here, but that could be shifting.

Nine states have “reciprocal agreements” with Illinois, which allows agents from neighbors like Indiana and Wisconsin to operate here, and vice versa, by only taking the Illinois portion of the licensing exam.

Illinois lawmakers are expected to do away with these reciprocal agreements and instead offer licensed agents from any state a simpler path to licensure in Illinois than starting from scratch.

This would make it easier for agents from most states, one of the bill’s sponsors said, but relatively harder for agents from reciprocal states.

Thad Wong, co-founder and co-CEO of @properties Christie’s International Real Estate, called the proposal “a net positive.”

“At the end of the day, I’m all about raising the bar and having more qualified agents that have to work a little bit harder to get licensed,” Wong said.

The Illinois General Assembly is set to amend the Real Estate License Act to create universal licensing for professionals from out of state, as reciprocal agreements with select states are set to expire.

Industry leaders expect the amendments will pass both houses this session and be signed into law. If so, state regulators will create a pre-license course that out-of-state agents would have to take, alongside passing the Illinois portion of the real estate licensing exam and providing proof of licensure in their home states.

“We feel confident that (the bills will pass) sometime in the next couple of weeks as the General Assembly’s wrapping up their business for this session,” said Illinois Realtors CEO Jeff Baker.

The potential downside of the changes mostly affects brokers who practice in multiple states using reciprocal licenses because they serve areas that straddle borders, such as where Chicago’s city line meets the border of northwestern Indiana, Wong said.

“We have specific agents that work with clients in both states, because they’re considering both states to live in,” Wong said. “So, I think there’ll be little submarkets where this is a negative for people.”

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Reciprocal licenses will remain valid for those who hold them, but no new reciprocal licenses would be granted as of Jan. 1, 2026. Those with reciprocal licenses can maintain them with standard continuing education requirements.

Licensed agents from those nine reciprocal states — Indiana, Wisconsin, Colorado, Connecticut, Florida, Georgia, Iowa, Kentucky and Nebraska — only have to take the Illinois portion of the licensing exam to begin practicing here, according to Illinois Realtors.

However, licensed agents coming over to practice from any of the other 40 states currently have to take all 75 hours of pre-licensing courses required in Illinois and pass the full real estate exam — state and national.

Baker, whose association works with lawmakers on amendments to the Real Estate License Act, called the universal process proposed by lawmakers “consumer protection-oriented.”

“Many states are moving toward endorsement programs in place of what are sometimes outdated reciprocal agreements,” Baker said.

The chief sponsor of the Illinois House bill, Rep. Jenn Ladisch Douglass, a Democrat from Westmont, said the proposed amendments would open the industry up for professionals from more states while still protecting Illinois residents.

“With the economy changing the way it has and people becoming more remote in their work, this could make it more possible for people to have remote offices and work in different states without having to establish as much of a presence or office,” Ladisch Douglass said. “It moves with the market because the market is changing.”

Lawmakers did not consider reciprocal agreements when crafting the bill, given that they were set to sunset, Ladisch Douglass said. Instead, they followed in the footsteps of states like Wisconsin that have moved toward universally applied “endorsement” programs instead of reciprocity.

Other proposed amendments to the Real Estate License Act include the requirement that brokerage agreements on both the buy-side and the list-side be made in writing, in line with changes from the settlement of antitrust lawsuits by the National Association of Realtors. These agreements can be exclusive or non-exclusive.

The amendments would also require brokers and managing brokers to take at least two hours of fair housing training every two years as part of continuing education, an effort to promote diversity, equity and inclusion, according to the Illinois Department of Financial and Professional Regulation.

The changes would also loosen requirements for those applying for managing broker licenses by allowing applicants to pass an exam on Illinois-specific real estate brokerage law.

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