“How much does it cost to become a real estate agent?” A question commonly asked by those who are weighing the potential return on investment against the initial costs involved.
Overall, the cost of becoming a real estate agent in the US can be as low as $410 in certain states; in others, though, it might be over $1,600. In this blog, we’ll discuss the costs related to becoming a real estate agent in every state. Let’s begin.
Becoming a Real Estate Agent
The promise of working flexible hours, the potential for substantial earnings, the independence of managing their own business, and the variety each day brings. These are just some of the exciting thoughts that make individuals consider becoming a real estate agent.
However, entering the real estate industry can seem overwhelming, too. The upfront commitment in terms of both time and finances seems truly a deterrent at first. Add to this the unpredictability of a commission-based income and the intensely competitive market. New agents must also face the challenge of building a client network from the ground up and mastering the art of effective self-promotion and marketing, which are essential for success in this field.
But, covering all these challenges in one blog seems a bit too much. So, let’s limit our discussion to real estate -cost-related aspects and leave other complexities to some other time.
Cost-Related Aspects of Becoming a Real Estate Agent
The cost to become a real estate agent depends primarily on the state in which one desires to operate. In some states, it’s simply more expensive to become a real estate agent than in others. Most of the regulatory bodies at the state level seem somewhat reluctant to reveal the costs related to fingerprinting, the exam, etc. Moreover, the pre-licensing costs vary not only from state to state but also among different educational providers.
Additionally, different schools might include various supplementary materials and resources, which can also affect the overall cost. Another factor in play is whether the course is held online or in a traditional classroom setting, which typically costs more than the former.
This makes it a bit difficult to come up with a concrete number that accurately represents the total investment required across all scenarios. So please, keep in mind that the table presented above serves as a general guide and aims to provide an estimated range of costs based on the most commonly encountered expenses.
For the most accurate and up-to-date information, it is advisable to check directly with the relevant state’s real estate commission and selected educational institutions. With that being said, let’s take a look at the five main factors determining the cost to become a real estate agent.
The state in which you want to operate
In our discussion about the best places to be a real estate agent, we described how the choice of state influences agents’ opportunities to secure clients, their income, living costs, and more. Similarly, in some states, it costs more to get a real estate certificate than in others. This could be due to a variety of factors including higher licensing fees, more stringent continuing education requirements, and additional regulatory measures.
Pre-licensing costs: $140-$1,300
Though the exam itself has a rather steady cost across all states ($40-$100), the real difference lies in the pre-licensing education costs that, in some states, can go up to $1,300! While this may look like Hobson’s choice, by researching and comparing various approved educational programs within their state, candidates can lower the training costs to $600.
The duration of the course can vary from 45 to 180 hours, and the materials covered may vary in terms of depth and breadth. So, make sure that the school you choose will equip you with all the necessary knowledge needed to pass the exam. In other words, don’t risk sacrificing quality for cost!
Fingerprinting and background checks: $36-$103
Prior to taking the exam, candidates must go through fingerprinting and background checks. This process is essential for verifying a candidate’s identity and for ensuring that they have no disqualifying criminal history.
Candidates are typically directed to specific state-approved vendors or facilities where they can have their fingerprints taken. The results are then sent to the state real estate commission or the appropriate regulatory body to be reviewed as part of the licensing process. Here too the cost varies depending on the state and the vendor selected.
Some states have a fixed rate for all fingerprinting services, while others may see prices fluctuate based on the specific service provider or the location where the fingerprinting takes place. Additionally, the method of background checking, whether it includes only statewide checks or also federal checks, can influence the overall cost.
The exam: $39-$150
The exams usually taken for becoming a real estate agent typically include multiple-choice questions covering topics such as property laws, real estate principles, and ethics. Candidates must register and pay the fee through their state’s designated testing service, which provides specific instructions, locations, and times for taking the exam.
As for the fee, it’s typically somewhat between $39- $100 which is due to different regulatory bodies setting their own exam fees and potentially using different service providers to administer the tests.
Application fees: $100-$485
The application fee covers the cost of processing the application, reviewing the candidate’s qualifications, and other administrative expenses associated with the issuance of a real estate license. The amount can vary widely depending on the state’s real estate commission policies and the complexity of the application review process.
For instance, in some states, the application fee might be as low as $100, while in others, it could be upwards of $458 or more. This fee is typically paid when the candidate submits their application for licensure, following the successful completion of the required pre-licensing education and passing the real estate licensing exam.
Additional Costs to Consider
The cost to become a real estate agent extends beyond what has been presented above. What we talked about includes the mandatory payments one must make to become a certified agent. To legally operate as a real estate agent in a US state, certified agents must find a broker to sponsor them.
This brokerage affiliation is necessary for activating and maintaining their license. Beyond this requirement, agents often incur additional expenses related to marketing themselves, such as advertising, creating a website, and purchasing business cards. More on these topics here.
Furthermore, ongoing professional development courses contribute to the overall cost of being a real estate agent. Take the National Association of Realtors, for example. While joining this trade association is not obligatory, many agents prefer to pay the costs just to be recognized as members of this organization simply because it lends them professional development and credibility in the market.
Last but not least, renewing the license is a periodic requirement that involves both fees and the completion of continuing education courses.
Time to Take the Leap into Real Estate!
Becoming a real estate agent should not be determined solely by the initial costs and potential earnings. Though one should consider such aspects, evaluating personal compatibility with the career’s demands and lifestyle is equally important.
Real estate involves irregular hours, constant interaction with clients, and navigating stressful negotiations, which may not suit everyone’s temperament or work-life balance preferences. Moreover, success in real estate requires perseverance, a strong network, and a deep understanding of local markets, which are built over time and go beyond just financial considerations.
Therefore, those considering this path should take a holistic view of the profession, assessing both their financial goals and their ability to meet the day-to-day challenges of the job. In doing so, they can make a more informed decision that aligns with their long-term personal and professional aspirations.
FAQs
The training hours vary from 60 to 180 hours. Depending on the school you choose, your course might take two to six months.
To be eligible for a real estate agent license, an applicant must be at least 18 years old.
The income of an average real estate agent depends on several factors including the number of transactions they complete, the commission rates they negotiate, the property prices in their market area, their level of experience, and the economic conditions affecting the real estate market.
Typically, real estate agents in the United States can expect to earn anywhere from $40,000 to over $100,000 annually, with more experienced agents or those in high-value property markets potentially earning significantly more.
