How Much Does It Cost To Get A Real Estate License

Key Takeaways

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, there is money that must be spend to maintain it over the course of 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 to the shock of many, it’s relatively large.

If you are planning 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 go to get your real estate license.

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how much does it cost to become a real estate agent

Cost Of A Real Estate License

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. Each of these components can require a certain amount of capital. Read through the following costs of getting a real estate license:

  • Education

  • State Licensing Exam

  • Background Check

  • Hanging Your License With A Broker

  • Errors & Omissions Insurance

  • National Association of Realtors Membership

  • Business Expenses

  • Marketing Costs


Estimated Costs: $200 to $1,000

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

It’s worth noting, however, that the costs associated with each state’s educational requirements are as varied as the amount of hours required themselves. It’s entirely possible to receive “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. 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.

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 payed 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. It’s at this point that 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.

Background Check

Estimated Costs: $50 to $100

In the event 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 as 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.

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.” As far as I am concerned, 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. The cost of hanging your license with a broker, however, 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 are going to 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. For a nominal fee, the broker will provide you with office space and a desk to conduct business — hence the name. Desk fees vary greatly, but are generally a flat fee that has been predetermined.

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 is required to 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.

National Association of Realtors Membership:

Estimated Costs: Sign up fee plus $120/year

Not surprisingly, a great deal of 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, for what it’s worth, the MLS is one of the best tools made available to agents the nation over. As you would expect, none of this comes without a price.

As per the National Association of Realtors official site, “dues are $120 per member for 2017 and for 2018. 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) you must fork over.

Business Expenses

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

There are various business expenses investors should expect to pay in order to maintain regular operations as a real estate investor. These include the costs of an 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 set up, number of employees or partners, and the amount 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 expense do not take effect at the onset of the licensing process, they are still important to consider when evaluating the longevity of this opportunity.

Marketing Costs

Estimated Costs: $1,000/year

After you complete 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 when it comes to 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).

how much does it cost to become a realtor


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 thought of as well worth the cost of admission — so long as you take advantage of all the benefits awarded to those that get their license.

Investors considering this route should be prepared for not only the immersive education process, but also 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.

Have you thought about getting your real estate license to boost your business performance? Or, are you are an investor who prefers teaming up with a licensed agent? Whatever the case, we would like to hear which route has led to the most success for your business. Share your real estate license success in the comments below.

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