Becoming a real estate agent can be a rewarding career. You get to choose your hours, be your own boss, and have access to many valuable tools and networks that other jobs do not offer. All of these perks and benefits come at a cost. If you are willing to put in the time and money needed to become a real estate agent, then the career can be for you. To get an idea of the cost and commitment required to become a real estate agent, here is a comprehensive breakdown of what you can expect when trying to get your real estate license.
- 60 Hours Pre-Licensing Class
- Fingerprinting and Background Checks
- Passing the State and National Exams
- License Application Fees
- Errors & Omissions (E&O) Insurance Fee
- Joining a Brokerage
- Joining a Realtor Association
These are the costs required to become a real estate agent. There are other expenses, such as marketing and maintaining your license
1. 60 Hours Pre-License
As an example, let us say you are trying to get your license in Virginia. Virginia requires 60 hours of real estate education to take the state’s state and national exam. The price for in-classroom pre-licensing courses can vary between $300-$600 depending on the school and the package you purchased. Many real estate schools offer an online course (self-guidance), but there is no instructor, unlike the in-classroom sessions.
2. Fingerprinting and Background Checks
Due to real estate agents routinely accessing other people’s homes, you will be required to have a background check performed to gain your license. A background check will cost anywhere between $50-$100
3. Passing the State and National Exam
Before taking the PSI (Professional Service Industries) exam, you will need to pass the school’s state and national exam. Generally, there is no cost associated with this when taking it the first time. If you do not pass the test the first time, retaking the test is a cost. The price of retaking the test varies by school. After you pass the state and national exam, you are eligible to take the PSI exam at a PSI-approved building. The PSI exam cost varies, and we recommend contacting PSI to found out the exam price.
4. License Application Fees
You will need to pay a fee to apply for your real estate license. The cost for the license application varies by state. For example, in Virginia, the cost to apply for a real estate agent is $170, whereas it is $210 for qualifying brokers.
5. Errors & Omissions (E&O) Insurance Fee
You will need Error & Omissions insurance if you plan on becoming a real estate agent. E&O insurance protects real estate agents against financial losses from a lawsuit as a result of their real estate career. You must have this insurance, and if you let your insurance expire, the state will deactivate your license. To maintain E&O insurance, it will cost about $400 per year.
6. Joining a Brokerage
You will need to join a broker so you can start your real estate activities. Depending on the brokerage, there is a cost to joining them. The cost to join a brokerage varies, and we recommend calling the brokerage to see what the price is to join them.
7. Joining a Realtor Association
While not required, it is highly recommended to join a realtor association. A realtor association has access to many tools such as sentrilock, access to BrightMLS, and more. Realtor association cost varies by association, so we recommend calling your preferred association to find the cost to join their association.
A career in real estate requires a lot of money and commitment. Keep in mind; these are the costs to become a licensed real estate agent. There are additional costs that will be needed to market yourself or maintain an active license. Hopefully, this post has given you a better understanding of the costs of becoming a real estate agent.