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How Much Does It Cost To Get Real Estate License?

Don't let "how much does it cost to get real estate license" dim your light! Get the inside scoop on fees, expenses & affordability across states. Make informed choices, invest in your success - your real estate future awaits!

Author:James Pierce
Reviewer:Alberto Thompson
Jan 19, 2024
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In today's investment landscape, possessing an active real estate license is highly valuable, although it's essential to acknowledge that the associated advantages come with a cost. So, how much does it cost to get a real estate license? The expenses for obtaining a real estate license can vary significantly depending on the location, but they can quickly accumulate, often exceeding $3,000 in the first year. Additionally, ongoing expenditures are necessary to maintain the license throughout one's career.
If your intention is to acquire a real estate license to enhance your investment business, it's crucial to understand the commitment involved. Beyond adhering to new regulations and financial obligations, there is a substantial time commitment expected. The following is a comprehensive breakdown of the challenges and costs you can anticipate when pursuing a real estate license for your investment endeavors.

How Much Does It Cost To Get Real Estate License

A calculator and a model house are placed on a table.
A calculator and a model house are placed on a table.
In the United States, the cost of obtaining a real estate license varies between $400 and $1000 or more, depending on the state.
Acquiring a real estate license involves various expenses that extend beyond the commonly perceived certification fees. Contrary to popular belief, the process is multifaceted.
To secure a real estate license, individuals must engage in coursework, apply for the licensure exam, and shoulder marketing responsibilities. Professionals at Loan Advisor recommend awareness of concealed costs before embarking on the journey, such as parking fees, registration expenses, maintenance deposits, and preferential location charges (PLC), each requiring a specific financial commitment.
Explore the following breakdown of expenses associated with obtaining a real estate license:
  • Educational Expenses
  • State Licensing Exam Fees
  • Background Check Charges
  • License Association with a Broker
  • Errors & Omissions Insurance
  • Membership with the National Association of Realtors
  • Business-related Expenditures
  • Marketing Expenses
  • Continuing Education Costs

Educational Expenses

Anticipated Costs:$200 to $1,000
Each state typically establishes its own prerequisites for individuals aspiring to become licensed real estate agents. Prospective candidates preparing for the state exam are generally required to complete a specified amount of study, with the "credit hours" mandated by each state ranging from 63 hours in Florida to 180 hours in Texas.
The expenses associated with meeting these educational requirements vary widely across states, reflecting the diversity in required hours. It is possible to secure an education deemed "acceptable" for as little as $200. However, it is essential to recognize that the adage "you get what you pay for" holds true.
A basic education may cost a couple of hundred dollars, representing the lower end of the spectrum. Conversely, a comprehensive education ensuring readiness for the exam and compliance with state requirements can demand an investment of up to $1,000.
Tam Le, the Founder of Steamaster, notes that out-of-pocket costs can total approximately $500. Nevertheless, individuals have recently found discounted online courses on platforms like Groupon for as low as $55. Additional expenses such as licensing and membership fees still apply. For those seeking a more interactive learning experience, various physical schools offer enrollment options.

Examining Specific States

  • Texas- The average cost of a basic real estate license education package in Texas ranges from $400 to $600. Typically, these packages provide sufficient training to fulfill the required 180 qualifying hours.
  • California- Aspiring real estate agents in California must complete 135 hours of certified real estate courses, with costs averaging around $700. These fees often cover live courses, practice exams, and study materials.
  • Florida- The cost of obtaining a real estate license in Florida is approximately $500, encompassing the required 63 hours of coursework. While costs may vary, residents can expect to pay between $400 and $700 in this state.

State Licensing Exam Fee

Anticipated Costs:$85 to $200 per examination
It is crucial to note that none of the educational courses designed to prepare individuals for the state licensing exam include the actual cost of the exam itself. Therefore, those seeking an accurate estimate of the total expenses for becoming an actively licensed real estate agent must factor in the exam cost as a separate item when budgeting.
Similar to the variability in the costs of real estate education, state licensing exam fees also differ. Fortunately, the exam is generally less expensive than the education undertaken in preparation for it.
On average, the standard state licensing exam is priced between $85 and $200. However, it is essential to recognize that the expenses associated with the exam are not a one-time occurrence. Individuals who successfully pass the exam on their initial attempt can proceed to the next phase without additional costs.
Conversely, those who do not pass on their first try have the option to retake the exam, albeit at an additional cost. At this juncture, it is strongly recommended to approach your education with diligence, as it not only establishes the groundwork for your entire career but also minimizes the likelihood of having to undergo the state licensing exam more than once.

Background Check Charges

Estimated Costs:$50 to $100
Upon obtaining an active real estate license, you gain access to valuable information, but more significantly, you assume a responsibility that accompanies the license. Licensed real estate agents, having access to any property listed on the Multiple Listing Service (MLS), are entrusted with a unique level of access to properties that are not their own.
Considering this privileged access, it is logical for licensed agents to undergo background checks. As part of the licensing process, aspiring agents must successfully pass an FBI background check, and similar to other requirements, it incurs a cost.
To undergo the background check, you are obligated to provide your fingerprints and Social Security Number to the relevant authorities. The associated expenses are primarily the processing fees for each check. Fortunately, the cost of background checks is relatively reasonable and typically ranges from $50 to $100.

License Affiliation With Broker

Estimated Costs:Varies by brokerage
In many states, new real estate agents are typically required to affiliate their license with a brokerage for a minimum of two years. This arrangement often involves brokers mentoring and guiding newly licensed agents, providing invaluable experience in the complex real estate field.
However, this mentorship comes with associated costs, although it is more accurately described as a fee. Like other aspects on this list, these fees can vary significantly between different brokerages.
The expected fees usually include a monthly "desk fee" and a percentage deduction from each sale's commission. The latter can be challenging, considering that agent commissions often range from six to eight percent of a sale, translating to around $7,000 on a $100,000 home.
Given that most brokerages claim a share, even a modest percentage deduction can accumulate substantially over time. Some brokerages may even take as much as fifty percent of your commission, which is considerably more than many agents are willing to part with.
Regarding the desk fee, some brokers may charge up to $1,500 per month. For those unfamiliar with the concept, a desk fee covers the cost of office space provided by the broker for conducting business. While desk fees vary widely, they typically constitute a predetermined flat fee.

Errors & Omissions Insurance

Estimated Costs: $350 to $400 per year
Errors and omissions insurance, described by Investopedia as a form of professional liability coverage, safeguards individuals and companies from client claims arising from inadequate work or negligence. This insurance typically covers both legal expenses and settlements up to the contract-specified amount. Given the substantial impact even minor transactions can have in real estate, every licensed agent is required to carry errors and omissions insurance. Brokers typically do not cover this cost, and agents should expect to pay around $400 annually to avoid immediate license suspension if the insurance expires.

National Association Of Realtors Membership

Estimated Costs:Sign-up fee plus $150 per year
Many brokers mandate that their agents join the local Realtor board, making them members of the National Association of Realtors. This membership grants access to valuable tools, including the multiple listings service (MLS). However, such privileges come at a cost. According to the National Association of Realtors, membership dues are $150 per member for the year. This amount is billed through the primary local association and is due by January 1, in addition to a sign-up fee and the cost of an ethics class (typically under $100).

Business Expenses

Estimated Costs:$500 to $1,000 per year
Real estate investors should budget for various business expenses essential for daily operations. These may encompass office space, cell phone, internet, computer software, client meetings, and gifts. Business expenses refer to any purchases required to fulfill duties as a real estate agent.
The costs can vary based on the business setup, number of employees or partners, client load, and location. Although these expenses do not arise immediately during the licensing process, they are crucial to consider for long-term sustainability.

Marketing Costs

Estimated Costs:$1,000 per year
After completing real estate licensing education, effective marketing becomes paramount. Agents need to promote themselves to potential clients, involving expenses such as business cards, a website, social media advertising, flyers, and direct mail pieces.
While these costs may seem small individually, they accumulate into a marketing budget. Real estate agents have flexibility in reusing materials and exploring cost-effective marketing methods like social media and word-of-mouth referrals.

Continuing Education

Estimated Costs: $50 to $300+ per year
Real estate education persists throughout one's career, encompassing post-licensing classes and specialized training for different real estate market segments. Given the dynamic nature of the industry, the cost of continuing education for a real estate license is considered a worthwhile investment by many, ranging from $50 to $300 or more annually.

Funding Your Real Estate License Expenses

In this guide, you've gained insights into the projected costs associated with obtaining and running a real estate business after acquiring your license. If you're contemplating how to finance these expenses, it's essential to note that all these costs are tax-deductible.
Even when working under a brokerage, you're typically considered an independent contractor, allowing you to deduct these expenses when filing your taxes. Additionally, remember that the initial expenses incurred will likely be offset when you successfully close your first deal.
With a standard agent commission at 3 percent, closing a deal means earning a substantial amount, covering your initial investment. If you don't have the funds upfront, consider saving up for your career's startup costs and supplementing your income with a part-time job if needed.

Real Estate License Costs Across States

"cost to get a real estate license in each state" written with a woman standing in a red suit.
"cost to get a real estate license in each state" written with a woman standing in a red suit.
The quoted expenses for a real estate license provided below are average figures and are subject to change. These calculations are based on the cost associated with obtaining a salesperson license rather than a broker license. It's important to note that, due to additional educational requirements and state licensing fees, obtaining a broker license typically incurs higher costs compared to a salesperson license.
Here are the average costs for the license fee, pre-license education, and the total expenses 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

Timeframe For Obtaining A Real Estate License

How much time it takes to obtain your real estate license is contingent upon several factors, including your state's hourly requirements, the duration of the application process, and the format of your chosen course (online or in a classroom). Opting for a classroom course means completion time depends on the hours offered per week but generally takes around 6 months.
In contrast, online real estate license courses offer flexibility, allowing you to set your own pace, potentially reducing the time before taking the license test – provided you are motivated. Upon finishing your course and preparing for the test, the application process duration varies by state.
Some states have automated systems, enabling immediate license issuance at the testing site, while others involve mailing applications with results delivered later. Check your state's requirements for a clearer understanding of the application timeline.

Frequently Asked Questions - How Much Does It Cost To Get Real Estate License

Is Obtaining A Real Estate License A Valuable Endeavor?

Acquiring a real estate license is beneficial for those aspiring to work in the real estate sector. Real estate professionals can enjoy a flexible work schedule and the opportunity to earn a substantial income. Nonetheless, it's essential to acknowledge that a career in real estate can be challenging, and your earnings are significantly influenced by the local market conditions.

What Is The Duration For Obtaining A Real Estate License?

The timeframe to acquire your real estate license varies based on the state in which you intend to practice and the amount of time you can dedicate to the coursework. Generally, anticipate a period ranging from 2 to 6 months to fulfill the pre-licensing requirements and successfully pass the state exam.

Is It Feasible To Obtain A Real Estate License With A Felony?

Certainly, obtaining a real estate license with a felony may be possible, contingent on the regulations of the state where you are submitting your application. You are required to openly disclose your felony conviction on the real estate license application and be ready to elucidate the details of your offense and demonstrate your rehabilitation.

Conclusion

In the hands of a savvy investor, a real estate license can elevate a portfolio from good to excellent, raising the question: How Much Does It Cost To Get Real Estate License? While this tool provides a significant advantage over competitors, its cost is more substantial than one might anticipate. In reality, securing a real estate license can entail expenses reaching thousands of dollars in the initial year, with additional ongoing costs for license maintenance annually. Nevertheless, many consider the price well justified, provided one fully leverages the benefits offered to licensed individuals.
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James Pierce

James Pierce

Author
James Pierce, a Finance and Crypto expert, brings over 15 years of experience to his writing. With a Master's degree in Finance from Harvard University, James's insightful articles and research papers have earned him recognition in the industry. His expertise spans financial markets and digital currencies, making him a trusted source for analysis and commentary. James seamlessly integrates his passion for travel into his work, providing readers with a unique perspective on global finance and the digital economy. Outside of writing, James enjoys photography, hiking, and exploring local cuisines during his travels.
Alberto Thompson

Alberto Thompson

Reviewer
Alberto Thompson is an acclaimed journalist, sports enthusiast, and economics aficionado renowned for his expertise and trustworthiness. Holding a Bachelor's degree in Journalism and Economics from Columbia University, Alberto brings over 15 years of media experience to his work, delivering insights that are both deep and accurate. Outside of his professional pursuits, Alberto enjoys exploring the outdoors, indulging in sports, and immersing himself in literature. His dedication to providing informed perspectives and fostering meaningful discourse underscores his passion for journalism, sports, and economics. Alberto Thompson continues to make a significant impact in these fields, leaving an indelible mark through his commitment and expertise.
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