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How Much Does It Cost To Become A Realtor In 2023?

CEO Khai Intela
You've decided to embark on a career as a Realtor, but like any endeavor, there are practical considerations. How much will it cost to become a real estate agent? What are the expenses associated with...

You've decided to embark on a career as a Realtor, but like any endeavor, there are practical considerations. How much will it cost to become a real estate agent? What are the expenses associated with real estate school, obtaining a Realtor license, and working under a brokerage? In this article, we'll explore the various costs involved in becoming a Realtor, from the initial pre-license course to the license application process.

Becoming a Real Estate Agent

Becoming a licensed real estate agent involves a series of steps that vary depending on the state. To meet your state's licensing requirements, you will usually need to:

  • Complete a specific number of class hours in state-accredited courses.
  • Pass the real estate license exam.
  • Find a sponsoring broker to obtain an active license.

As a new real estate agent, you'll start by enrolling in an online, in-person, or hybrid real estate course. However, completing the course is just the beginning. You'll still need to sign up for and pass the license exam.

Attending Real Estate School

If you're wondering about the cost of becoming a real estate agent, one of the most significant expenses is education. The number of educational hours required varies by state. In Michigan, you need 40 hours of coursework, while in California, it exceeds 100 hours. Whatever the requirements in your state, completing the necessary coursework is vital to becoming a real estate agent.

Fortunately, the cost of real estate courses is not exorbitant. Pre-licensing courses can range from $200 for online classes to $1,000 for in-person courses. These courses may also include career preparation, with the option for online courses if you prefer a more cost-effective approach.

Cost: $200 to $1,000.

A real estate agent studying with a notebook and laptop A real estate agent studying with a notebook and laptop

Preparing for Your Real Estate Exam

While attending real estate school, it's crucial to prepare for your real estate exam. Similar to exams for other professions, such as the CPA or Bar exam, passing the state exam is what certifies you to receive a real estate license.

Many people opt for preparatory materials to enhance their chances of success. These materials can range in price from $150 to $600, with each state requiring a state-specific preparatory course.

*Cost: $0 to $160.* (Preparatory materials are optional and can range from $150 to $600. Depending on your prior real estate courses, you may be able to pass the exam without them.)

*Total: $200 to $1,160.**

Taking Your Real Estate Exam

Once you've completed your exam preparation, it's time to take the real estate exam. Most states allow multiple attempts if you don't pass on your first try. So, don't be discouraged if you don't obtain your license immediately; you can keep trying.

The cost of the real estate exam varies depending on the state. For example, in Ohio, it costs $60, while in Colorado, it's $45. If you need to retake the exam, you will have to pay the fee again.

Cost: $45 to $60.

Total: $260 to $1,810.

Considering the Costs of Becoming a Real Estate Agent

Contrary to popular belief, becoming a real estate agent doesn't require a significant financial investment. This is because the education and exams mainly ensure that you have the necessary knowledge to conduct real estate transactions successfully. Your real estate school equips you with the skills to avoid technical errors.

However, obtaining a real estate license is only the first step. Building a successful real estate career depends on your talent and motivation, which cannot be taught in a real estate course.

A real estate agent holding an image of a house A real estate agent holding an image of a house

The Hidden Costs of Being a Real Estate Agent

Becoming a real estate agent means becoming an independent contractor and business owner. As such, there are additional costs that come with the territory, including:

  • Marketing expenses, such as business cards and billboards.
  • Digital marketing costs, including paid ads and social media campaigns.
  • Real estate broker fees, including desk fees.
  • Realtor membership dues.
  • Office expenses.
  • Travel expenses.
  • MLS fees.

Considering all these costs when calculating your income and expenses is essential. Although upfront costs for becoming a real estate agent are relatively low, there are ongoing operational expenses beyond the initial licensing fees.

Considering the Cut: Commissions and Your Employing Broker

When calculating the cost of becoming a real estate agent, it's crucial to consider the factors beyond your expenses. Apart from the costs mentioned above, you should also factor in the commission split between you and the real estate company you work for. As a Realtor, you'll only earn a commission, and typically, your broker will receive half of what you earn.

It's essential to periodically compare different brokerages to ensure you're aligned with the right one for you.

Becoming a Real Estate Agent

Success as a real estate agent requires excellent money management skills. Your employing broker can provide guidance on how to leverage your resources effectively.

The first step for aspiring agents is to find a pre-licensing education course near them or pursue online options. Once the course is completed, individuals can sign up for the real estate licensing exam.

Someone counting money Someone counting money

FAQs on How Much Does it Cost to Become a Real Estate Agent?

What does a broker license cost?

If you want to obtain another type of real estate license, such as a broker license, the cost is relatively low. Depending on your location, it generally ranges from $200 to $300. However, becoming a broker requires meeting more stringent requirements than those for a typical real estate agent.

How much time does it take to become a real estate agent?

The time required to become a licensed real estate agent varies. Those attending classes usually take around four to six months, while online learners may finish within eight weeks. However, finding a principal broker is essential before participating in real estate transactions, even after obtaining your license.

Do you need to take continuing education courses as a real estate salesperson?

In most places, continuing education is necessary to maintain an active salesperson license. Failure to meet these requirements may result in your license becoming inactive, requiring you to retake the test and pay the license fee again.

Why does it cost so little to become a real estate professional?

Compared to other professions, the cost of becoming a real estate agent is relatively affordable. However, obtaining a real estate license is just the first step in becoming a successful Realtor. You'll still need to find a sponsoring broker and work hard to close deals.

Read More:

If you are located in California or Florida, check out specific guides on getting your license in those states. Learn how to become a real estate agent in Florida or how to become a realtor in California. Share your experiences and the costs of keeping your license active in the comments!

Note: The original article was edited and enhanced to provide a fresh perspective while retaining the core message.

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