Cost To Be A Real Estate Agent (Updated Study Guide For 2021)

While becoming a real estate agent can be a lucrative career affording financial freedom and work/life balance that is not all you need to consider. There is also a cost to become a real estate agent as well as a cost to be a real estate agent.


Cost to Become a Real Estate Agent

cost to become a real estate agent

 

There are many things to consider when becoming a real estate agent. The investment in the education and application process is one of those things. There are many different steps to take into consideration when becoming a real estate agent.

Each of these steps has a cost associated with it. A common question prospective agents have is “how much does it cost to become a real estate agent?”

The cost to become a real estate agent does vary from state to state but this section will give you a general idea of how much you should budget to start out.

Pre-Licensing Course Cost

The first cost associated with becoming a real estate agent is the pre-licensing course. This price can vary depending on the hours it will take to complete the course. Whether or not the course is in person or online will also make a difference.

In general students should expect to pay a minimum of $150 with some courses exceeding $400 in some circumstances.



In person classes do cost more than online courses. There are a few reasons for this.

In-person classes require the overhead of the building as well as paying for an instructor. This drives the price up. Online on-demand classes don’t require a live instructor and are completed from a students home.

This is how online real estate schools stay budget friendly. Regardless of the mode by which the class is delivered, they have the same content that is required by the state.

The courses are only part of the cost to be a real estate agent. There are several other steps that require other fees to be a real estate agent.

Background Check and Fingerprinting Cost

Nearly all, if not every, state does require a background check and fingerprinting to apply for your real estate license. This is one of the more affordable fees to be a real estate agent.

Real estate agents have to be trusted with information that the public typically does not have access to. They also go into people’s homes and are instantly trusted. That is why a background check, on the federal level, along with fingerprinting is required of all real estate agents.

Typically the cost of a background check and fingerprinting is not more than $100 together. However, there are states where it could cost slightly more, but this is one of the more mild fees to be a real estate agent regardless of the state.

Licensing Exam Cost

Once the pre-licensing courses are completed students can apply or register to take the state and national licensing exams. This is combined so the cost for both sections will depend on the state.

This is one of the most important among the cost to become a real estate agent. Without taking and passing this exam, there is no real estate license.

The fees associated with the licensing exam include the application, this costs varies from state to state but is generally between $25 and $50. However, this is just to apply to take the exam.

There is also a fee for taking the exam. This can range from $25-$150 depending on the state.

This can be a costly step for students who don’t pass the test the first time. It is possible to take the test more than once however, students will need to pay the exam fee again. This can be costly.

License Application Fee

There is the exam application fee but also the actual license application fee. If you pass your state licensing exam it will be time to apply for your actual license.

There are some states who roll this into the exam application fee or even the exam fee. In this situation, the license will be issued directly up passing the exam.

If that is not the case for your state then you will have to fill out an application, prove you passed the exam, and submit your fee.

The fee for the license adds to the cost to become a real estate agent by around $150 depending on the state.

MLS and REALTOR Fees

In order to be able to access more detailed information about properties, real estate agents will need to be a member of the MLS. This is a database organized by area. Each area MLS page will require its own membership.

This is a fee that will need to be paid once you are licensed so you can start working and accessing properties immediately.

There are other professional membership organizations such as REALTOR that you can elect to become a part of. However, there are fees associated with it.

These fees to be a real estate agent come with a yearly cost and start at around $200 a year depending on state and organization.

Pre-Licensing Costs Overview

  • Pre-Licensing Course: $150-$500+
  • Background Check and Fingerprinting: $50-$100
  • Real Estate Exam: $200
  • License Application : $50-$150
  • MLS and REALTOR® Fees: $200+ annually

Licensing Fees TOTAL: $650-$1150


Cost to Be a Real Estate Agent

cost to become a real estate agent

The cost to become a real estate agent is only part of the story. The cost to be a real estate agent is the rest of it.

There are fees and expenses that a real estate agent should expect to pay during the course of their career. Some of these will be yearly dues while others may be business expenses and health insurance.

Brokerage Fees

Many states require a new real estate agent to be licensed under a broker. This is a mentor or apprenticeship but the brokers don’t do this for free.

While mentoring a new real estate agent doesn bring business to the firm, it also costs money in administrative fees, business supplies, and time.

Because of this, there are brokerage fees that play into the cost to be a real estate agent. It is the norm for real estate agents to pay a percentage of their commission to the broker.

How much that is depends on the broker and what they have decided to take as their share. There are also occasions when a broker will require the real estate agent to pay a monthly amount to have a desk in the office.

This helps the broker take care of the overhead associated with running a real estate firm. This is one of the numbers that can vary greatly from broker to broker.

However, the real estate agents should expect to pay anywhere from $25 a month to $500 a month depending on desk fees and commission percentages.

Real Estate Agent Advertising Costs

People need to know that you are a real estate agent. They also need to know what firm you are with and what you look like. That is where advertising and marketing expenses come in.

In addition to business cards, there are things such as car magnets, decals, swag, and larger billboards or signs on local businesses. These are the most common types of advertising for real estate agents.

Websites like realtor.com and zillow.com allow real estate agents to pay for leads in their service area. This is a way to make sure the leads they get are relatively serious buyers.

If a real estate agent is with a broker, they might send solid leads to the real estate agent to help get them started, however, this isn’t always the case. This cost to be a real estate agent is not something an agent can do without.

Word of mouth is important but it won’t take the place of strategic advertising.

A new real estate agent can expect to spend upwards of $1,000 a year to market properly.

Errors and Omissions Insurance Cost

An important cost to be a real estate estate agent is errors and omissions insurance. There are states that don’t require errors and omissions insurance but it is always a good idea to incur this cost to become a real estate agent.

If an agent is with a broker then this expense may be covered as part of the brokerage fees. It isn’t unusual for the broker to handle this expense.

However, if a broker isn’t required, then real estate agents are responsible for this cost. Agents should expect to spend $300 to $400 a year to protect the license they worked hard to obtain.

Continuing Education Costs

Real estate agents are required to keep up with their professional development through continuing education courses.

These are often offered online. The frequency and requirements will vary by state. But agents should budget for $100 to $300 or more annually.

After the first year some states only require continuing education every two years. This part of the cost to be a real estate agent is one of the more varied expenses.

While this expense varies, it is usually one of the lowest expenses.



Transportation Costs

Real estate agents drive often. Not only do they drive to the office but they drive a large area to show clients listings. This can really wear on a car.

Gas expenses are only a small part of the overall transportation expenses. This can include repairs, oil changes, new tires, tire balancing and rotating, and anything else required to keep your car in top condition.

It is estimated that the average real estate agent spends around $1400 a year on car maintenance. That isn’t including gas.

The amount of fuel you use will depend on your vehicle and the size of the area you are willing to work. Tracking mileage and fuel costs will be imperative when it is time to file taxes.

Health Insurance Costs

Real estate agents are considered self-employed and often do not get health benefits even when they work with a broker.

This means they either go without health insurance or supply it themselves. Health insurance for an individual can range from $350-$1000 a month conservatively. This doesn’t include children or spouses.

A real estate agent can choose to forego this cost to be a real estate agent. However, it is not advisable.

This is a cost to be a real estate agent that is easily written off on your taxes. Since being self-employed has many out of pocket expenses, having health insurance to receive a tax credit will pay off in the end.

Client Costs

It is customary for real estate agents to give their buyers a gift upon closing. It doesn’t have to cost a large amount of money but it does need to be thoughtful.

This amount of money will vary with the number of closings a real estate agent has a year. It will also depend on what gift the agent decides to give. It will likely be around $100 a closing.

Making your clients feel special and valued is an important cost to be a real estate agent and stay a real estate agent.

Cost To Be A Real Estate Agent Overview

  • Brokerage Fees: $2700-$6000 annually
  • Marketing: $1000
  • Errors and Omissions Insurance: $3600-$4800 annually
  • Professional Development: $100-$300 annually
  • Transportation: $1400 + gas
  • Client Costs: $100 per closing
  • Health Insurance: $6000-$12000 annually

Business Expenses TOTAL: $14,900-$25,600 yearly


Cost to Become a Real Estate Agent in Each State

cost in each state

Now that we have gone over the general numbers associated with the cost to become a real estate agent we will talk about each state. Because the states vary so widely, it is important to focus on the requirements for your particular state.

Cost To Be A Real Estate Agent In Alabama

  • Pre-licensing Course Cost: $299
  • Background Check/Fingerprinting: $15-$50
  • State Exam Fees: $73
  • Post-License Fees: $199

Alabama Real Estate Commission

See requirements to get a real estate license in Alabama.

Alaska

  • Pre-licensing Course Cost: $300-$500
  • Post-Licensing Fees: $200-$400
  • State Exam Fees: $100
  • License Application Fees: $605

Alaska Real Estate Commission

Cost To Be A Real Estate Agent In Arizona

  • Pre-licensing Course Cost: $250-$550
  • Background Check/Fingerprinting:$50
  • State Exam Fees and License Fees: $125

Arizona Real Estate Commission

See requirements to get a real estate license in Arizona.

Arkansas

  • Pre-licensing Course Cost: $200-$500
  • Background Check/Fingerprinting: $86.25
  • State Exam Fees: $75
  • License Application Fees: $75

Arkansas Real Estate Commission

See requirements to get a real estate license in Arkansas.

Cost To Be A Real Estate Agent In California

  • Pre-licensing Course Cost: $199-$600
  • Background Check/Fingerprinting: $50-$100
  • State Exam Fees: $60
  • License Application Fees: $245

California Real Estate Commission

See requirements to get a real estate license in California.

Colorado

  • Pre-licensing Course Cost: $400-$600
  • Background Check/Fingerprinting: $40-80
  • E&O Insurance: $200-$400
  • License Application Fees: $485

Colorado Real Estate Commission

Connecticut

  • Pre-licensing Course Cost: $300-$500
  • Background Check/Fingerprinting: $50-$100
  • State Exam Fees: $65
  • License Application Fees: $80
  • License Fee: $305

Connecticut Real Estate Commission

Delaware

  • Pre-licensing Course Cost: $600-$800
  • Background Check/Fingerprinting: $39.50
  • State Exam Fees: $65
  • License Application Fees: $89

Delaware Real Estate Commission

Cost To Be A Real Estate Agent In Florida

  • Pre-licensing Course Cost: $200-$400
  • Background Check/Fingerprinting: $39.50
  • State Exam Fees: $36.75
  • License Application Fees: $89

Florida Real Estate Commission

Cost To Be A Real Estate Agent In Georgia

  • Pre-licensing Course Cost: $300-$600
  • Background Check/Fingerprinting: $50
  • State Exam Fees: $115
  • License Application Fees: $170

Georgia Real Estate Commission

Hawaii

  • Pre-licensing Course Cost: $500-$700
  • Background Check/Fingerprinting: $100
  • State Exam Fees: $68
  • License Application Fees: $85

Hawaii Real Estate Commission

Idaho

  • Pre-licensing Course Cost: $300-$600
  • Background Check/Fingerprinting: $100
  • State Exam Fees: $80
  • License Application Fees: $160

Idaho Real Estate Commission

Cost To Be A Real Estate Agent In Illinois

  • Pre-licensing Course Cost: $300-$500
  • Background Check/Fingerprinting: $40
  • State Exam Fees: $125
  • License Application Fees: $45

Illinois Real Estate Commission

Indiana

  • Pre-licensing Course Cost: $500-$700
  • Background Check/Fingerprinting: $42.20
  • State Exam Fees: $61
  • License Application Fees: $121

Indiana Real Estate Commission

Iowa

  • Pre-licensing Course Cost: $300-$500
  • Background Check/Fingerprinting: $51
  • State Exam Fees: $95
  • License Application Fees: $125

Iowa Real Estate Commission

Kansas

  • Pre-licensing Course Cost: $200-$500
  • Background Check/Fingerprinting: $60
  • State Exam Fees: $82
  • License Application Fees: $75

Kansas Real Estate Commission

Kentucky

  • Pre-licensing Course Cost: $300-$600
  • Background Check/Fingerprinting: $51.25
  • State Exam Fees: $100
  • License Application Fees: $192

Kentucky Real Estate Commission

Louisiana

  • Pre-licensing Course Cost: $300-$500
  • Background Check/Fingerprinting: $50
  • State Exam Fees: $120
  • License Application Fees: $85

Louisiana Real Estate Commission

Maine

  • Pre-licensing Course Cost: $300-$600
  • Background Check/Fingerprinting: $52
  • State Exam Fees: $85
  • License Application Fees: $121

Maine Real Estate Commission

Maryland

  • Pre-licensing Course Cost: $200-$400
  • Background Check/Fingerprinting: $50
  • State Exam Fees: $61
  • License Application Fees: $110

Maryland Real Estate Commission

Massachusetts

  • Pre-licensing Course Cost: $300-$500
  • Background Check/Fingerprinting: $25
  • State Exam Fees: $85
  • License Application Fees: $103

Massachusetts Real Estate Commission

Cost To Be A Real Estate Agent In Michigan

  • Pre-licensing Course Cost: $200-$400
  • Background Check/Fingerprinting: $86.50
  • State Exam Fees: $76
  • License Application Fees: $88

Michigan Real Estate Commission

Minnesota

  • Pre-licensing Course Cost: $500-$700
  • Background Check/Fingerprinting: $43.25
  • State Exam Fees: $65
  • License Application Fees: $110

Minnesota Real Estate Commission

Mississippi

  • Pre-licensing Course Cost: $200-$400
  • Background Check/Fingerprinting: $32
  • State Exam Fees: $75
  • License Application Fees: $135

Mississippi Real Estate Commission

Missouri

  • Pre-licensing Course Cost: $300-$500
  • Background Check/Fingerprinting: $36.75
  • State Exam Fees: $52
  • License Application Fees: $201.05

Missouri Real Estate Commission

Montana

  • Pre-licensing Course Cost: $250-$500
  • Background Check/Fingerprinting: $40
  • State Exam Fees: $106
  • License Application Fees: $135

Montana Real Estate Commission

Nebraska

  • Pre-licensing Course Cost: $300-$500
  • Background Check/Fingerprinting: $45.25
  • State Exam Fees: $150
  • License Application Fees: $285

Nebraska Real Estate Commission

Cost To Be A Real Estate Agent In Nevada

  • Pre-licensing Course Cost: $250-$500
  • Background Check/Fingerprinting: $31
  • State Exam Fees: $100
  • License Application Fees: $245

Nevada Real Estate Commission

New Hampshire

  • Pre-licensing Course Cost: $300-$600
  • Background Check/Fingerprinting: $48.25
  • State Exam Fees: $170
  • License Application Fees: $110

New Hampshire Real Estate Commission

Cost To Be A Real Estate Agent In New Jersey

  • Pre-licensing Course Cost: $300-$500
  • Background Check/Fingerprinting: $42.80
  • State Exam Fees: $155
  • License Application Fees: $160

New Jersey Real Estate Commission

New Mexico

  • Pre-licensing Course Cost: $600-$700
  • Background Check/Fingerprinting: $44
  • State Exam Fees: $95
  • License Application Fees: $240

New Mexico Real Estate Commission

Cost To Be A Real Estate Agent In New York

  • Pre-licensing Course Cost: $300-$500
  • Background Check/Fingerprinting: $65
  • State Exam Fees: $15
  • License Application Fees: $70

New York Real Estate Commission

Cost To Be A Real Estate Agent In North Carolina

  • Pre-licensing Course Cost: $400-$550
  • Background Check/Fingerprinting: $14
  • State Exam Fees: $60
  • License Application Fees: $96

North Carolina Real Estate Commission

North Dakota

  • Pre-licensing Course Cost: $400-$500
  • Background Check/Fingerprinting: $41.25
  • State Exam Fees: $131
  • License Application Fees: $230

North Dakota Real Estate Commission

Ohio

  • Pre-licensing Course Cost: $700-$1000
  • Background Check/Fingerprinting: $57
  • State Exam Fees: $81
  • License Application Fees: $60

Ohio Real Estate Commission

Oklahoma

  • Pre-licensing Course Cost: $400-$500
  • Background Check/Fingerprinting: $57.25
  • State Exam Fees: $60
  • License Application Fees: $116

Oklahoma Real Estate Commission

Oregon

  • Pre-licensing Course Cost: $300-$500
  • Background Check/Fingerprinting: $33
  • State Exam Fees: $230
  • License Application Fees: $300

Oregon Real Estate Commission

Pennsylvania

  • Pre-licensing Course Cost: $300-$400
  • Background Check/Fingerprinting: $25.75
  • State Exam Fees: $40
  • License Application Fees: $107

Pennsylvania Real Estate Commission

Rhode Island

  • Pre-licensing Course Cost: $300-$425
  • Background Check/Fingerprinting: $40
  • State Exam Fees: $70
  • License Application Fees: $100

Rhode Island Real Estate Commission

South Carolina

  • Pre-licensing Course Cost: $400-$550
  • Background Check/Fingerprinting: $25
  • State Exam Fees: $63
  • License Application Fees: $123

South Carolina Real Estate Commission

South Dakota

  • Pre-licensing Course Cost: $500-$1000
  • Background Check/Fingerprinting: $43.25
  • State Exam Fees: $294
  • License Application Fees: $225

South Dakota Real Estate Commission

Tennessee

  • Pre-licensing Course Cost: $450-$600
  • Background Check/Fingerprinting: $35.15
  • State Exam Fees: $91.50
  • License Application Fees: $133

Tennessee Real Estate Commission

Cost To Be A Real Estate Agent In Texas

  • Pre-licensing Course Cost: $400-$600
  • Background Check/Fingerprinting: $28.25
  • State Exam Fees: $259
  • License Application Fees: $320

Texas Real Estate Commission

Utah

  • Pre-licensing Course Cost: $350-$550
  • Background Check/Fingerprinting: $28.25
  • State Exam Fees: $66
  • License Application Fees: $152

Utah Real Estate Commission

Vermont

  • Pre-licensing Course Cost: $250-$450
  • Background Check/Fingerprinting: $50
  • State Exam Fees: $115
  • License Application Fees: $100

Vermont Real Estate Commission

Cost To Be A Real Estate Agent In Virginia

  • Pre-licensing Course Cost: $400-$600
  • Background Check/Fingerprinting: $35.95
  • State Exam Fees: $85
  • License Application Fees: $170

Virginia Real Estate Commission

Cost To Be A Real Estate Agent In Washington

  • Pre-licensing Course Cost: $350-$500
  • Background Check/Fingerprinting: $45.25
  • State Exam Fees: $146.25
  • License Application Fees: $146.25

Washington Real Estate Commission

Cost To Be A Real Estate Agent In Washington DC

  • Pre-licensing Course Cost: $500-$1000
  • Background Check/Fingerprinting: $50
  • State Exam Fees: $61.50
  • License Application Fees: $240

Washington DC Real Estate Commission

West Virginia

  • Pre-licensing Course Cost: $450-$550
  • Background Check/Fingerprinting: $45.75
  • State Exam Fees: $96
  • License Application Fees: $196

West Virginia Real Estate Commission

Wisconsin

  • Pre-licensing Course Cost: $300-$525
  • Background Check/Fingerprinting: $39
  • State Exam Fees: $69
  • License Application Fees: $144

Wisconsin Real Estate Commission

Cost To Be A Real Estate Agent In Wyoming

  • Pre-licensing Course Cost: $300-$450
  • Background Check/Fingerprinting: $39
  • State Exam Fees: $141
  • License Application Fees: $480

Wyoming Real Estate Commission

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