With the housing market set to grow at a breakneck speed in the coming year, it is a great time to plan your career as a real estate agent. While that can lead to an exciting and eventful career ahead of you, there are a few expenses that you need to factor in before starting the journey.
The first thing is, it is necessary to follow the licensing procedure in your state to get a real estate license. In reality, the cost of a real estate license varies from state to state. But unless you plan for the expenses involved, it can get difficult to keep track of your budget.
We will discuss the various factors that determine how much a real estate license costs in this article.
Points to Know Before Starting a Real Estate Career
The fact is, real estate isn’t a career that offers easy money in a relatively short period. To be a successful real estate agent you need to invest the necessary hard work to stay on top of your game. At the end of the day, you need to stay proactive and keep a positive mindset to step into this exciting career path.
So, before you invest the effort and money required for the license, make sure that you are on the right career path.
Here are some points to keep in mind before you start applying for a real estate license.
Speak With Professionals
Whatever you may have heard about the real estate business, may be far from the reality. So, talk to some agents to understand the actual effort and skills required before putting in the necessary effort to obtain the license. This will help you to remain confident about your decision.
Consider Potential Earnings
In reality, a six-figure income range is common among successful agents. The top-grade agents can earn even higher. But, learning about the amount of money a real estate agent can earn is not enough.
It is best to have realistic expectations about your income when you start. Hard work and the ability to be a constant learner are essential for doing well in this field. In the end, your dedication will decide your success.
Develop a Plan
As a self-employed individual, you need to develop a plan for establishing your brand. To reach your goals, you also require a proper marketing strategy that will help you to plan your progress and expenses.
Also, expanding your sphere of influence through networking is key in the real estate business. Think about how your skills can differentiate you from the other competitors in the market. With new agents entering the market each year, make sure that your plan is flexible to adapt to the changing scenarios.
Have a Cash Reserve
Once you join the real estate market, you won’t start earning immediately. Even when you do, the paychecks will not come at regular intervals. Expect a slow start and plan to handle it. Make sure that you have a cash reserve that can help you ride out the lean periods. It is best to start saving from the first stage itself before you earn your license.
Keep Getting Better
Your real estate classes are not over once you clear the exam. Keep learning new things by attending seminars and conferences. The progress of your career will depend on how you improve your skills. Beyond that, interfacing with clients and gaining knowledge about the local real estate market will help you to stay ahead in a competitive market.
Choosing the Right Brokerage
The fact is, you want to work with people with whom you are comfortable. A good brokerage can have the right vibes to keep you motivated while allowing you to gain the right amount of experience. Not all brokerages offer the same level of training, marketing services, and agent support. You need to choose one that allows you to take the best advantage of all the services it provides.
How to Obtain a Real Estate License?
Since each state has a unique licensing requirement for real estate, the first step is to visit the real estate regulatory office website of your state. Some of the common aspects for which the states have specific rules are listed below
The age of the candidate
Exam eligibility, the application process, and fees
Background checks and fingerprinting
Note, some states have reciprocal licensing agreements with a few others. That means you can use your license in the other state without having to sit through another licensing examination.
Here are the steps you need to take for earning a professional license.
Joining a Prelicensing Course
The first step is to start taking pre-licensing courses from an approved licensing school. The number of hours of pre-license studies required for a license varies between the states. You can choose between an online or a classroom setup depending on your preferences.
While choosing a school, you should ensure the availability of top-grade instructors and study materials. We suggest that you check the first-time pass rate of the school before enrolling in the course. The total costs for the real estate classes can be between $350 to $450.
Taking the Examination
The next step is to schedule, register, and pay for the state’s licensing exam. The exam is computerized and usually conducted through multi-choice questions. The time limits vary between states.
The questions come in two parts. The first part covers the general principles of real estate practices at the national level. The second part deals with the state-specific regulations. Each section is graded separately and you need to clear both. The scores are provided immediately after completing the exam.
How much are the fees for the real estate exam? The examination fees can be between $100 to $300 depending on the state.
In case you are unsuccessful, you can retake the exam after a gap as per the rules of the state. You may not need to retake the course before reappearing for the exam.
Activating the Real Estate Agent License
Once you have cleared the exam, it is time to activate your real estate license. For that, you need to submit an application along with the necessary documents to the state licensing board. There can be some other requirements that you need to meet. These can include your fingerprints being taken and a criminal background check.
Beyond that, you will also need to pay the required fees for the license. This can range between $200 to $400 depending on the state regulations.
The state will mail you the real estate license certificate after your application is approved. Your name will also appear in the licensees' section of its official website. Keep in mind, you cannot work as a real estate agent unless the license is issued.
Note, you need to renew your real estate license at intervals to keep working as a real estate agent. The time period between renewals can be two to three years depending on the state. The fees for the same vary between $50 to $300, depending on the state. In addition, some states also have additional conditions including continuing education (CE) requirements.
How Much Is It to Get Your Real Estate License?
Considering the individual expenses for each step, the total cost of a real estate license can easily add up. The total process can cost you more than a thousand dollars depending on the state you live in.
Besides, if you start working under a supervising broker, you will need to pay some fees depending on your arrangement apart from splitting your commission. These can include desk fees, tech fees, and charges related to marketing materials. You will also need to pay the necessary fees to join the National Association of REALTORS® (NAR) and to gain access to the Multiple Listing Service (MLS).
So, planning your budget and organizing your finances before you step into a real estate career is extremely important.
Tips For Obtaining a Real Estate License
Here are some tips that will help you to get your license.
Take the exam as soon as you finish the course. This way, the subject will be fresh in your mind and this will help you to perform better. In reality, the breadth of the subject is difficult to cover in a few hours. So, focus on the technical aspects like the laws and the vocabulary.
Make preparing for the exams a professional priority and ensure that you have fixed hours of real estate study-time. In reality, clearing the exam is not so difficult. But it needs proper planning and effort to clear it.
One reason behind the failure to clear the examination is the lack of concentration. So, remain focused and pay attention to the details
The Bottom Line
Now you have an idea about the real estate license costs. The exact expense, process, and timeline for getting the license will vary depending on your state.
Getting your license is not a simple task and it will cost you money. Your license has immense value and it can be the perfect stepping stone to a rewarding real estate career. If you're serious about a career in real estate, we're always looking for ambitious, entrepreneurial-minded people. Click here to learn more about joining Christian Saunders Real Estate.