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How Much Does It Cost To Get A Real Estate License? [Updated 2022]

Written by Than Merrill

Few things are more valuable to an investor in today’s landscape than an active real estate license, but it’s worth pointing out that the resulting benefits will come at a price. So, how much does it cost to get a real estate license? The costs of a real estate license can quickly add up, though they can vary dramatically depending on the area. It is not uncommon for costs in the first year to reach upwards of $3,000. On top of that, money must be spent to maintain it throughout a career.

I am convinced that becoming a real estate agent can facilitate your development as an investor. Adding a real estate license to your arsenal can dramatically increase your access to valuable tools, networks, and information that not everyone in the industry is made privy to. And what is an advantage if not for a benefit not everyone has? That said, access comes at a price, and it’s relatively large – to the shock of many.

If you plan on getting your real estate license to help your investing business, you must know what you are getting into. Not only will you be expected to conform to new rules and costs, but there is an inherent level of time commitment that will be expected of you.

Here is a comprehensive breakdown of what you can expect to be confronted with when you get your real estate license.

Cost Of A Real Estate License

The cost of a real estate license in the U.S. ranges from $400-$1000+ depending on your state.

There are several costs associated with getting a real estate license. It is a common misunderstanding to assume the only costs are for the certification process, but in reality the process is more layered than that. To obtain a real estate license, investors will need to enroll in proper course work, apply to take the test, and even take on marketing responsibilities. Exeprts at Loan Advisor suggest “I would suggest being aware of hidden expenses before attempting to get a real estate license, including parking charges, registration costs, maintenance deposit, and preferential location charges (PLC)”. Each of these components can require a certain amount of capital. Read through the following costs of getting a real estate license:

  1. Education

  2. State Licensing Exam

  3. Background Check

  4. Hanging Your License With A Broker

  5. Errors & Omissions Insurance

  6. National Association of Realtors Membership

  7. Business Expenses

  8. Marketing Costs

  9. Continuing Education


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how much does it cost to become a real estate agent

1. Education

Estimated Costs: $200 to $1,000

It’s not uncommon for each state to have its own set of requirements — prerequisites, if you will — for those looking to become licensed real estate agents. Namely, those considering taking the state exam are expected to have already completed a predetermined amount of studying. In addition, the amount of “credit hours” required by each state varies significantly, ranging from 63 hours in Florida to 180 hours in Texas.

However, it’s worth noting that the costs associated with each state’s educational requirements are as varied as the number of hours required themselves. It’s entirely possible to receive an “acceptable” education for as little as $200. However, it’s true what they say: you really do get what you pay for. Consider a couple hundred dollars to be on the lower end of the spectrum. Respectively, a comprehensive education that will satisfy your state’s requirements and ensure that you are prepared for the exam can run you upwards of $1,000.

Tam Le the Founder of Steamaster says that “out of pocket costs can total roughly $500. However, I’ve seen some individuals recently get discounts on Groupon for as little as $55 for an online course. You’ll still have to pay licensing and other membership fees. If you want a more participatory learning experience, there are a variety of physical schools where you can enroll.”

Here is a closer look at some of the most popular states to obtain a real estate license in:

  • Texas: A basic real estate license education package in Texas can cost between $400 and $600 on average. In most cases, these packages include enough training to meet the required 180 qualifying hours.

  • California: California requires aspiring real estate agents to complete 135 hours of certified real estate courses, which typically costs around $700. These fees often cover live courses, practice exams, and materials.

  • Florida: The cost of a real estate license in Florida hovers around $500, which includes the 63 hours of required coursework. Though the costs can vary, residents should expect to pay between $400 and $700 in this state.

2. State Licensing Exam

Estimated Costs: $85 to $200 per test

All of the educational courses tasked with preparing you for the state licensing exam that I am aware of do not include the cost of the test itself. Therefore, anyone looking to zero in on the actual cost of becoming an actively licensed real estate agent needs to account for the exam as its own line item when they are budgeting costs. And, not unlike the real estate education you have paid for up to this point, state licensing exams will vary in price. Fortunately, the test itself isn’t as expensive as the education you received in preparation for it.

On average, your typical state licensing exam will cost anywhere between $85 and $200. However, fees associated with taking the exam are far from a one-time cost. Those who pass on their first try are free to move on to the next expense — I mean step. Consequently, those who do not pass on their first try are free to take it again, but at a price. At this point, I implore you to take your education seriously. It will not only serve as the foundation for your entire career moving forward, but it will also prevent you from having to take the state licensing exam more than once.

3. Background Check

Estimated Costs: $50 to $100

If you are granted an active real estate license, you will be made privy to valuable information. More importantly, however, is the responsibility you will find yourself saddled with the moment you acquire your license. If for nothing else, licensed real estate agents have access to any property listed on the Multiple Listing Service (MLS). Seeing how licensed real estate agents are granted unprecedented access to homes that aren’t even theirs, it only makes sense that they are subjected to background checks. That said, anyone hoping to become a licensed agent must pass an FBI background check, and — like everything else on this list — it’s not free.

You will be required to provide the proper authorities with your fingerprints and Social Security Number. Your costs are, therefore, the processing fees associated with each check. Fortunately, background checks aren’t that expensive and should set you back no more than $50 to $100.

4. Hanging Your License With A Broker

Estimated Costs: Varies by brokerage

Most of the states I am aware of will require newly dubbed real estate agents to hang their license with a brokerage for at least two years. In doing so, most brokers tend to take the newly licensed agents “under their wings” and “show them the ropes.” It’s one of the best ways for newly licensed agents to gain valuable experience in a relatively complicated field. It’s also worth noting, however, that said experience comes at a cost. However, the cost of hanging your license with a broker isn’t so much a cost as it is a fee. And, like just about everything else on this list, the fees vary dramatically between brokerages.

You can probably expect two fees, in particular: a monthly “desk fee” and coughing up a portion of your commission on every sale. The latter can be a tough “pill to swallow,” as agent commissions are typically anywhere between six and eight percent of a sale. That’s approximately $7,000 on a $100,000 home. And if most brokerages are expecting a piece of the pie, even a small percentage can add up to a lot of money over time, but I digress. Not all brokerages want a small piece; some are comfortable taking fifty percent of your commission — a lot more than most are willing to part ways with.

As for the desk fee, some brokers will charge you as much as $1,500 a month. For those of you less familiar with the idea of a desk fee, it’s essentially the cost associated with receiving office space. The broker will provide you with office space and a desk to conduct business for a nominal fee — hence the name. Desk fees vary greatly but are generally a flat fee that has been predetermined.

5. Errors & Omissions Insurance

Estimated Costs: $350 to $400/year

As Investopedia so eloquently puts it, “errors and omissions insurance is a type of professional liability insurance that protects companies and their workers or individuals against claims made by clients for inadequate work or negligent actions. Errors and omissions insurance often covers both court costs and any settlements up to the amount specified by the insurance contract.”

Since even small transactions coincide with significant ramifications in the housing industry, it makes perfect sense that every licensed agent must have errors and omissions insurance. What’s more, the brokerage isn’t going to cover the cost for you. As a result, you can expect to pay upwards of $400 a year. Otherwise, your license will be suspended immediately if your errors and omissions insurance expires.

6. National Association of Realtors Membership

Estimated Costs: Sign up fee plus $150/year

Not surprisingly, many brokers will require their agents to become a member of their local Realtor board. In doing so, agents are included in the National Association of Realtors and given access to a myriad of tools and information, not the least of which includes the multiple listings service. And the MLS is one of the best tools made available to agents the nation over. But, as you would expect, none of this comes without a price.

As per the National Association of Realtors’ official site, “dues are $150 per member for 2021 and for 2022. This amount is billed to all active REALTOR® and REALTOR® Associate members through their primary local association and is due and owing to NAR by Jan. 1.” That’s in addition to a signup fee and the cost of an ethics class (under $100).

7. Business Expenses

Estimated Costs: $500 -$1,000/year

There are various business expenses investors should expect to pay to maintain regular operations as a real estate investor. These include the costs of office space, cell phone, internet, computer software, client meetings, client gifts, and more. Essentially, business expenses refer to anything you need to purchase to fulfill your duties as a real estate agent.

These costs can vary dramatically depending on your existing real estate business setup, number of employees or partners, and the number of clients you are willing and able to take on. Location also plays a part, as start-up costs can also change from market to market. Although business expenses do not take effect at the onset of the licensing process, they are still important to consider when evaluating the longevity of this opportunity.

8. Marketing Costs

Estimated Costs: $1,000/year

After completing your real estate licensing education and certification process, the most important part begins: marketing yourself as an agent. This means getting the word out about what you do and how you can help potential clients. If you want to act as a real estate agent, a few costs to consider include business cards, a website, social media advertising, flyers, and even direct mail pieces.

Each of these items may seem like a small expense on its own, but they can quickly add up to a marketing budget. However, the important thing to remember is the level of flexibility real estate agents have regarding marketing. Not only can you reuse certain materials, but there are also several low-cost ways to market yourself (such as social media or word of mouth referrals).

9. Continuing Education

Estimated Costs: $50-$300+/year

Throughout your entire career, your real estate education will continue. This includes post-licensing classes and special education for specialized areas of the real estate market. As there is always something new to learn in this ever-changing industry, many find the cost of a real estate license continuing education to be well worth the investment.

[ Ready to take the next step in your real estate education? Learn how to get started in real estate investing by attending our FREE online real estate class. ]

how much does it cost to become a realtor

Financing The Costs Of A Real Estate License

In this guide, you learned about the estimated cost of obtaining your real estate license, and how much it costs to run your business once you’ve obtained your license. You may be wondering how you can finance all of these costs. First and foremost, know that all of these expenses are tax-deductible. Even if you work in a brokerage, you’re typically an independent contractor and not an employee. This means that you get to deduct your expenses come tax time. Second, all of your initial expenses will pay for themselves when you close your first deal. A typical agent commission is 3 percent, which means that you’ll make several thousand dollars when you get your first commission check. If you don’t have the money upfront, you may need to save up enough money to fund your career’s start-up process and supplement your income with a part-time job.

How Much Is A Real Estate License In Each State?

The costs for a real estate license quoted below are averages that are subject to change. These calculations are based on the cost of obtaining a salesperson license rather than a broker license. Due to the additional schooling prerequisites and other state licensing fees, a broker license generally costs more than a salesperson license.

Below you will find the average cost of the license fee, pre-license education, and the total for each state:

Alabama

License Fee: $220
Pre-License Education: $300-$400
Total: $600

Alaska

License Fee: $355
Pre-License Education: $375
Total: $730

Arizona

License Fee: $300
Pre-License Education: $400
Total: $700

Arkansas

License Fee: $197
Pre-License Education: $400
Total: $597

California

License Fee: $400
Pre-License Education: $400
Total: $800

Colorado

License Fee: $615
Pre-License Education: $500
Total: $1,115

Connecticut

License Fee: $305
Pre-License Education: $450
Total: $755

Delaware

License Fee: $89
Pre-License Education: $600
Total: $689

Florida

License Fee: $150
Pre-License Education: $200
Total: $350

Georgia

License Fee: $170-$340
Pre-License Education: $350
Total: $540-$690

Hawaii

License Fee: $85
Pre-License Education: $650
Total: $739

Idaho

License Fee: $160
Pre-License Education: $600
Total: $760

Illinois

License Fee: $125
Pre-License Education: $450
Total: $575

Indiana

License Fee: $121
Pre-License Education: $550
Total: $671

Iowa

License Fee: $125
Pre-License Education: $425
Total: $575

Kansas

License Fee: $75
Pre-License Education: $225
Total: $400

Kentucky

License Fee: $192
Pre-License Education: $400
Total: $592

Louisiana

License Fee: $120
Pre-License Education: $350
Total: $470

Maine

License Fee: $121
Pre-License Education: $450
Total: $571

Maryland

License Fee: $110
Pre-License Education: $300
Total: $410

Massachusetts

License Fee: $103
Pre-License Education: $350
Total: $453

Michigan

License Fee: $88
Pre-License Education: $250
Total: $338

Minnesota

License Fee: $175
Pre-License Education: $600
Total: $775

Mississippi

License Fee: $135
Pre-License Education: $250
Total: $385

Missouri

License Fee: $201.05
Pre-License Education: $400
Total: $601.05

Montana

License Fee: $135
Pre-License Education: $400
Total: $535

Nebraska

License Fee: $285
Pre-License Education: $400
Total: $685

Nevada

License Fee: $245
Pre-License Education: $250
Total: $495

New Hampshire

License Fee: $225
Pre-License Education: $360
Total: $585

New Jersey

License Fee: $160
Pre-License Education: $360
Total: $520

New Mexico

License Fee: $240
Pre-License Education: $700
Total: $940

New York

License Fee: $70
Pre-License Education: $350
Total: $420

North Carolina

License Fee: $96
Pre-License Education: $475
Total: $571

North Dakota

License Fee: $230
Pre-License Education: $450
Total: $680

Ohio

License Fee: $60
Pre-License Education: $999
Total: $1,059

Oklahoma

License Fee: $116
Pre-License Education: $425
Total: $541

Oregon

License Fee: $300
Pre-License Education: $375
Total: $675

Pennsylvania

License Fee: $107
Pre-License Education: $350
Total: $457

Rhode Island

License Fee: $100
Pre-License Education: $325
Total: $425

South Carolina

License Fee: $123
Pre-License Education: $500
Total: $623

South Dakota

License Fee: $225
Pre-License Education: $1,000
Total: $1,225

Tennessee

License Fee: $133
Pre-License Education: $500
Total: $633

Texas

License Fee: $320
Pre-License Education: $475
Total: $795

Utah

License Fee: $152
Pre-License Education: $450
Total: $602

Vermont

License Fee: $100
Pre-License Education: $300
Total: $400

Virginia

License Fee: $170
Pre-License Education: $500
Total: $670

Washington

License Fee: $146.25
Pre-License Education: $400
Total: $546.25

West Virginia

License Fee: $196
Pre-License Education: $550
Total: $746

Wisconsin

License Fee: $144
Pre-License Education: $325
Total: $469

Wyoming

License Fee: $480
Pre-License Education: $400
Total: $880

Realtor license cost

How Long Does It Take To Get Your Real Estate License?

The length of time that it will take you to get your real estate license will depend on how many hours your state requires, how long the application process will take, and whether you take an online course or a course in a classroom setting. If you take a course in a classroom setting, the time it will take to get your license will depend on the hours your class offers each week but can typically be completed within 6 months.

On the other hand, online real estate license courses allow you to work and study at your own pace, which can significantly decrease the amount of time you will spend before taking your real estate license test – if you are motivated enough to do so. Once you have completed your course and are ready to take your test, the application process will vary by state. Some states have automated systems and can issue you your license at the testing site, while others will require the application to be mailed in and results returned to you later. Be sure to check your state’s requirements to better understand how long the application process will take.

Is Getting Your Real Estate License Worth It?

The cost of getting your real estate license can be entirely worth if you are committed to making real estate your career. If you stay in the industry, build up your network, and remain committed you can earn upwards of six figures. There are also opportunities to become a broker, or appraiser and continue building on your career in the future.

When compared to other career options, the real estate training process can be more accessible. Certification and licensing will cost under $1,000 in almost every state. Further, the programs will not take you four years to complete. This can be highly appealing to people in all stages of life.

Deciding whether or not the licensing process is worth it will essentially come down to how far you go in the industry. Do you see yourself working in real estate for at least the next few years? Are you certain you want to put the time in to build and maintain a network? Can you live on a commission-based income? Consider these questions before getting started, and you may find the process to be extremely worth it in the long run.

Summary

A real estate license in the hands of a savvy investor can help take a portfolio from good to great, though there is always one question that comes up: how much does it cost to get a real estate license? Few tools will give an investor more of an advantage over the competition, but the cost is not as insignificant as one might assume. In fact, getting a real estate license can cost thousands of dollars in the first year. There are also ongoing costs to keep the license active from year to year. Still, the price is considered well worth the cost of admission — so long as you take advantage of all the benefits awarded to those who get their license.

Investors considering this route should be prepared for the immersive education process and the new connections, opportunities, and challenges that can arise. After all, the decision to get a real estate license should not be exclusively financial. Investors will not be able to tap into the many benefits of having a real estate license without time and dedication. If you think you are ready for the challenge, begin researching your state’s requirements.


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