When you launch your real estate career, as with any small business, you’ll need to budget startup costs into the total cost of being an agent. You’ll have to cover some of these expenses before selling your first property. If you prepare for these costs, you’ll be in a better position to stay on track. What does it take to be a REALTOR® or real estate agent? Planning, financial responsibility and hard work. To help you out, we’ve put together a list of seven costs to consider when starting a real estate career.
1. Pre-licensing real estate classes and training
Estimated cost: $100+
Before you can sit for your real estate licensing exam, you’ll have to find a qualified and accredited real estate school. The amount and cost of coursework required will depend on the state you live in. Different schools will charge different fees. Online coursework is generally less expensive than in-person schooling.
2. Real estate examination and licensing fees
Estimated cost: $325+
Your real estate license application fee will generally cost around $25. You will also have to pay for fingerprinting and a background check. These will cost about $100 altogether. The actual state exam fee will vary, but it is generally less than $50. Then you will pay about $150 for the license itself.
3. Real estate broker fees
Estimated cost: $25–$500+/month
Next on the list of costs to consider when starting a real estate career are real estate broker fees. Once you become a licensed real estate agent, you’ll likely “hang your hat” with a local broker. Brokers typically take care of many of the business expenses associated with day-to-day operations. These include things like photocopies, office supplies, office internet, and Errors and Omissions insurance. However, you’ll probably pay a percentage of your commission back to the broker to cover these items. You might also pay a monthly desk fee.
4. Real estate membership dues
Estimated cost: $200+/year
Membership dues, while a tax write-off, are a notable expense. What does it take to be a REALTOR®? Well, importantly, you’ll need to be a member of the National Association of REALTORS® to gain that specific distinction. If you don’t want to become a member, as a real estate agent, you’ll still likely become a member of your state and local real estate boards. Those have fees associated with them, as does your local Multiple Listing Service. Your local real estate board may require a monthly fee—sometimes paid directly to the association, other times paid to your broker. State association fees vary from state to state but are typically a few hundred dollars, as are the membership dues for the National Association of REALTORS®.
What do you need to know about starting a real estate career? Find out in our free career guide.
5. Business expenses
Estimated cost: varies
As an agent, you’ll encounter many miscellaneous real estate business expenses as well. These include your cell phone and internet bill, office space and supplies, computer hardware and software, client meetings and lunches, and client closing gifts. Your broker may cover some of these, but probably not all. So be sure to add them to your list of costs to consider when starting a real estate career.
6. Marketing costs
Estimated cost: $1,000+/year
Marketing expenses are one of the biggest costs to consider when starting a real estate career. On average, 31% of REALTORS® spend over $1,000 per year on marketing expenses. As a new real estate agent, a large portion of your budget during the first year will be put toward marketing yourself and your properties. Maintaining a professional real estate website could cost up to $1,500 a year. You’ll also need to buy business cards, put up signage, pay for advertising, and create brochures, flyers, and mailers. These costs can add up. But they’re crucial expenses at the beginning of your career.
7. Real estate continuing education
Estimated cost: $50–$300+/year
Your real estate education will continue for the rest of your career. You’ll have to take continuing education classes</continuing-education/a> to meet ongoing licensing requirements. You can also earn special designations that help define your niche in the market. Most agents find the value of continuing education to be well worth the cost.
To be a real estate agent you need to be educated and confident about your industry. That’s why we recommend doing the appropriate real estate licensing courses for your state. Colibri Real Estate has helped more than 520,000 real estate professionals master their careers—from licensing to continuing education and onward. Start your pre-licensing courses today.