How hard is the South Dakota real estate exam?

The South Dakota real estate exam is moderately challenging with a 55-65% first-time pass rate. The exam is unique because it includes a simulation portion in addition to multiple-choice questions. You need a scaled score of 75 on both the national and state portions, plus meet the minimum passing level on the simulation. The extensive 116-hour education requirement helps prepare candidates well.

Why does South Dakota require 116 hours of pre-license education?

South Dakota has one of the highest education requirements in the nation because the SDREC believes comprehensive education produces better-prepared real estate professionals. The 116 hours cover all aspects of real estate including principles, law, finance, practice, and South Dakota-specific regulations. This thorough preparation contributes to the state having a slightly higher pass rate than some states with lower education requirements.

What is the simulation portion of the South Dakota real estate exam?

The simulation portion consists of 9 scored problems (plus 2 pre-test problems) that test practical application of real estate knowledge. It evaluates both Information Gathering (IG) - your ability to identify relevant facts - and Decision Making (DM) - your ability to apply knowledge to real-world scenarios. You must meet the Minimum Passing Level (MPL) in both areas.

How much does it cost to get a South Dakota real estate license?

Total cost is approximately $600-$900 including: pre-license courses ($300-$500 for 116 hours), exam fee ($105), license application ($225), fingerprinting/background check ($43.25), and optional study materials. South Dakota has no state income tax, which can offset licensing costs over time.

How long is the South Dakota real estate exam?

The South Dakota real estate exam is 4 hours (240 minutes) total. The national portion has 2.5 hours (150 minutes) for 100 scored questions plus 5 pre-test questions. The state portion has 1.5 hours (90 minutes) for 57 scored questions plus 5 pre-test questions. The simulation problems are included within the state portion time.

What are the post-license requirements for new South Dakota agents?

New South Dakota broker associates must complete 60 hours of post-license education during their first two renewal cycles - 30 hours in the first renewal and 30 hours in the second renewal. After that, the standard 24 hours of continuing education per 2-year cycle applies. All licenses expire on November 30 of odd-numbered years.

FREE South Dakota Real Estate Exam Guide 2026 | SDREC License & Practice Test

South Dakota Real Estate License Overview

South Dakota offers a unique real estate market with no state income tax, growing metropolitan areas like Sioux Falls and Rapid City, and affordable housing options. The South Dakota Real Estate Commission (SDREC), under the Department of Labor and Regulation, oversees all real estate licensing in the state. Note that South Dakota has one of the highest pre-license education requirements in the nation at 116 hours.

South Dakota Real Estate Exam Quick Facts

Feature	Details
Exam Administrator	PSI Exams
Total Questions	162 (plus pre-test questions)
National Portion	100 scored + 5 pre-test questions
State Portion	57 scored + 5 pre-test questions
Simulation Portion	9 scored + 2 pre-test problems
Time Limit	4 hours total (2.5 hours national, 1.5 hours state)
Passing Score	Scaled score of 75 on each portion
Exam Fee	$105
Results	Immediate (pass/fail on screen)
Testing Locations	Madison, Rapid City, Sioux Falls

Requirements Before Taking the Exam

Education Requirements

Requirement	Details
Age	18 years or older
Pre-License Education	116 hours (SDREC-approved)
Course Format	Online or classroom
Course Validity	2 years from completion
Citizenship	U.S. citizen or legally authorized to work
Social Security Number	Required

Pre-License Course Content (116 Hours)

The 116-hour requirement covers comprehensive real estate education:

Real Estate Principles - Property rights, ownership, legal descriptions
Real Estate Law - Contracts, agency, disclosure requirements
Real Estate Finance - Mortgages, loan types, qualifying
Real Estate Practice - Listing, selling, closing procedures
South Dakota License Law - State-specific regulations
Ethics and Fair Housing - Professional standards, discrimination laws
Property Management - Landlord-tenant relationships
Investment Properties - Analysis, taxation, exchange

Application Process

Complete 116-hour pre-license education
Request fingerprint cards from SDREC
Complete state (DCI) and federal (FBI) background checks ($43.25)
Register with PSI and pay exam fee ($105)
Schedule exam at Madison, Rapid City, or Sioux Falls
Pass both portions of the exam
Submit license application within 60 days of passing ($225)

South Dakota Exam Format

The South Dakota exam is unique in that it includes a simulation portion in addition to multiple-choice questions.

Content Breakdown

Section	Scored Questions	Pre-test	Time	Passing
National Portion	100	5	150 minutes	Scaled 75
State Portion	57	5	90 minutes	Scaled 75
Simulation	9 problems	2	Included	MPL score
Total	166	12	240 minutes	75 each

National Portion Topics (100 Questions)

Topic	Approximate %	Key Points
Property Ownership	15%	Estates, ownership types, legal descriptions
Land Use Controls	10%	Zoning, environmental, deed restrictions
Valuation	15%	Appraisal methods, CMAs, market analysis
Financing	15%	Mortgages, TILA, RESPA, loan types
Agency	12%	Types, duties, disclosure requirements
Contracts	15%	Elements, types, contingencies
Transfer of Title	10%	Deeds, title insurance, closing
Practice	8%	Ethics, fair housing, antitrust

State Portion Topics (57 Questions)

Topic	Key Points
SD License Law	SDREC rules, license types, requirements
Agency Disclosure	SD disclosure requirements and forms
Trust Accounts	Escrow handling, record keeping
Property Management	SD landlord-tenant regulations
Advertising Rules	SD-specific advertising requirements
Commission Rules	SDREC administrative rules

Simulation Portion (9 Problems)

The simulation portion tests practical application of real estate knowledge:

Information Gathering (IG) - Finding relevant facts
Decision Making (DM) - Applying knowledge to scenarios
Must meet Minimum Passing Level (MPL) in both IG and DM

South Dakota-Specific Topics

Agency Relationships

South Dakota requires disclosure of agency relationships:

Seller's Agent - Represents seller exclusively
Buyer's Agent - Represents buyer exclusively
Dual Agent - Represents both with written consent
Transaction Coordinator - Facilitates without representation

SD Trust Account Requirements

Requirement	Details
Deposit Deadline	Per contract terms or within reasonable time
Account Type	Federally insured financial institution
Commingling	Strictly prohibited
Record Retention	6 years minimum
Reconciliation	Monthly required

South Dakota Disclosure Requirements

Key disclosures required in South Dakota:

Property condition disclosure (residential)
Lead-based paint disclosure (pre-1978 homes)
Agency disclosure at first substantive contact
Material facts affecting property value
Radon disclosure (recommended)

Property Tax System

South Dakota property taxes:

Assessed at market value
Classification ratios apply
Agricultural land special assessments
Owner-occupied tax credits available
No state income tax (affects buyer decisions)

South Dakota Exam Pass Rate

The South Dakota real estate exam has a first-time pass rate of approximately 55-65%. Factors affecting difficulty:

Factor	Impact
High education requirement	116 hours provides strong foundation
Simulation portion	Unique testing format adds challenge
Scaled scoring	75 scaled score required
Two portions	Must pass both independently

Study Strategy

Recommended Study Time

Approach	Hours	Timeline
Intensive	50-60	2-3 weeks
Standard	60-80	4-5 weeks
Part-time	80-100	6-8 weeks

After completing the 116-hour pre-license course.

Study Priority by Weight

National Portion (100 questions)
- Focus on financing and valuation
- Master agency relationships
- Practice contract scenarios
State Portion (57 questions)
- SD license law is critical
- Trust account rules
- Agency disclosure procedures
Simulation Portion (9 problems)
- Practice scenario-based questions
- Develop analytical thinking
- Time management for complex problems

Key Math Formulas

Commission Calculations:

$\text{Commission} = \text{Sales Price} \times \text{Rate}$

$\text{Net to Seller} = \text{Sales Price} - \text{Commission} - \text{Costs}$

Prorations (South Dakota uses 365-day year):

$\text{Daily Rate} = \frac{\text{Annual Amount}}{365}$

$\text{Proration} = \text{Daily Rate} \times \text{Days Owed}$

Loan Calculations:

$\text{LTV} = \frac{\text{Loan Amount}}{\text{Property Value}}$

$\text{Equity} = \text{Property Value} - \text{Loan Balance}$

Investment Analysis:

$\text{Cap Rate} = \frac{\text{NOI}}{\text{Property Value}}$

$\text{GRM} = \frac{\text{Sales Price}}{\text{Gross Rent}}$

Common Mistakes to Avoid

1. Underestimating the Simulation Portion

Many candidates prepare only for multiple-choice but struggle with:

Scenario-based analysis
Practical application of concepts
Time management on complex problems

2. Weak South Dakota-Specific Knowledge

Don't rely only on national content:

SDREC rules and procedures
SD agency disclosure requirements
Trust account regulations
State licensing procedures

3. Insufficient Math Practice

Math questions are significant. Practice daily:

Commission calculations
Prorations (taxes, rent, interest)
Loan qualifying ratios
Investment property analysis

4. Poor Time Management

240 minutes total for 166+ questions
Budget time for simulation problems
Don't spend too long on difficult questions
Reserve time for review

Exam Day Tips

Before the Exam

Get good rest the night before
Eat a balanced meal
Arrive 30 minutes early
Bring two forms of ID (one government-issued with photo)

During the Exam

Read every question completely
Watch for "EXCEPT" and "NOT" questions
Use scratch paper for calculations
For simulations, read all information carefully
Trust your first instinct
Use all available time to review

What to Bring

Two forms of ID (one government-issued with photo)
Confirmation email from PSI
Nothing else - personal items stored in locker

After Passing

Immediate Steps

Receive results on screen at testing center
Submit license application within 60 days
Pay application fee ($225 non-refundable)
Complete background check if not already done
Associate with a broker (required to practice)

Post-License Requirements

Requirement	Details
First Renewal	30 hours post-license education
Second Renewal	30 hours post-license education
Total Post-License	60 hours in first two renewal cycles

Continuing Education Requirements

Renewal	CE Required
Renewal Cycle	Every 2 years (expires November 30)
Total Hours	24 hours
Required Topics	12 hours minimum
Elective Hours	12 hours maximum
Daily Limit	8 hours per day

Required CE Subject Areas (12 hours minimum)

At least 12 hours must be in these required areas:

Real Estate Contracts
Real Estate License Law
Fair Housing
Ethics
Environmental Issues
Antitrust
Americans with Disabilities Act
Brokerage Services

License Renewal

Renewal Type	Requirements
Application deadline	November 30
CE completion deadline	December 31
Late renewal	License becomes inactive January 1
Reactivation	24 hours CE in preceding 2 years

South Dakota Real Estate Career Outlook

Salary Expectations

Experience	Annual Income
First year	$30,000-$45,000
2-5 years	$45,000-$70,000
5+ years	$70,000-$100,000+
Top producers	$120,000+

Key South Dakota Markets (2026)

Sioux Falls - Largest city, strong job growth, corporate headquarters
Rapid City - Gateway to Black Hills, tourism economy
Aberdeen - Regional hub, healthcare and education
Brookings - University town, growing tech sector
Pierre - State capital, government employment
Watertown - Manufacturing and agriculture

South Dakota Real Estate Advantages

No state income tax - Attractive to buyers and investors
Affordable housing - Lower median prices than national average
Growing population - In-migration from higher-tax states
Business-friendly - Economic development incentives
Quality of life - Outdoor recreation, low crime rates

Resources

SDREC Official Website - Licensing information
PSI Exams - Exam scheduling
South Dakota REALTORS - Industry association
OpenExamPrep - Free study materials and practice tests

✓Key Facts

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