Real Estate Agent Career Start-Up Costs

Real Estate Agent Career Start-Up Costs and First-Year Expenses

by The CE Shop Team

Real Estate Agent Start-Up Costs to Consider 

Beginning a career as a real estate agent can turn into a lucrative endeavor with time and dedication, especially if you start off on the right foot by correctly budgeting for your first-year expenses. The median income of experienced real estate agents is $43k, and those who adequately plan for initial expenses such as their real estate education and exam costs, Broker commission splits and desk fees, tax deductions, insurance costs, and association fees can quickly find themselves among the top 25% of registered REALTORS® earning $100k or more.

The potential salary in conjunction with the low financial barrier to entry make real estate a fantastic career path. In this guide, we'll lead you through the detailed costs you can expect while embarking on your real estate journey during your first year, including what you'll need to purchase and the price ranges you can expect to pay - no matter the state in which you reside

Pre-Licensing Courses

$300 - $600

Your real estate education begins with your Pre-Licensing educational costs, which include industry classes as well as other learning options, such as an exam pass guarantee, Broker training, and education to help you build your business after you're licensed. Basic Pre-Licensing Course expenses can be as low as $100 in some states like California, while other states like Utah ring in closer to $500. Every state has a real estate commission that regulates the educational requirements needed to become a licensed real estate agent there, thus the fluctuation in pricing. 

So, how do you keep your Pre-Licensing costs down? Online real estate schools tend to have reduced overhead, and many will pass those savings on to you. Bundling services together like Exam Prep and Post-Licensing training can also help you save significant money on your real estate start-up costs.

Real Estate Exam Prep

$50 - $125

Customized study courses with free practice exams can help you find early success during your first year of pursuing a real estate license. Real estate licensing exams typically have two parts: State portion, which covers topics directly related to the state in which you’re testing, and the National portion, which asks about real estate information on a federal level. Because of this structure, Exam Prep courses may be broken down into separate National and State exam options, or they might be combined into one. Costs can vary from $50 - $125 depending on your state and the option you choose.

Real Estate Exam Fees

$250 - $400

There are a few different fees associated with your real estate exam, including an application fee that typically costs around $25 - $30 and an exam fee that will be between $50 - $100 in most states. You'll also need to pay for fingerprinting and a background check, which can cost between $20 - $100

Once you've passed your real estate exam, the fee to obtain your license will vary from state to state. For instance, Ohio's license fee is built into the comparably low exam fee of $61 per attempt, and the initial application fee is higher than average at $81.

Since many states follow Ohio's model of “pay until you pass”, the more exam preparation you do prior to your real estate exam, the better your cost savings will be.


$50 - $450

Post-Licensing is also known as “First Renewal” because it is classwork and testing that must be passed in order to obtain your first real estate license renewal. Course hours vary by state, with lower requirements costing around $50 and more intensive coursework like that in Texas priced at over $400. Some states such as California also consider Pre-Licensing as part of your first-year Continuing Education.

Not every state requires Post-Licensing, although about half do. 

States That Require Post-Licensing Education

  • Alabama
  • Arkansas
  • California
  • Delaware
  • Florida
  • Georgia
  • Idaho
  • Illinois
  • Indiana
  • Kentucky
  • Louisiana
  • Mississippi
  • North Carolina
  • North Dakota
  • Ohio
  • Oklahoma
  • Oregon
  • Pennsylvania
  • South Dakota
  • Tennessee
  • Texas
  • Utah
  • Vermont
  • Virginia
  • Washington 

On average, you can expect to pay $100 - $200 for your Post-Licensing education.

Pro Tip: 

Budgeting apps such as Mint, PocketGuard, or YNAB can help you stay on track with your real estate education expenses. Take a look at each to understand how they can help you manage your coursework, exam, and first-year start-up costs:

  • Mint – Includes insights to help you save money and personalized tracking of home and business finances
  • PocketGuard – Great for goal tracking and keeping on top of your spendable funds, including categorized reports and debt payment schedules
  • YNAB – Short for “You Need a Budget”, this stress-reducing app helps to make real estate budgeting less intimidating by teaching you how to plan a budget using cooperative budgeting, personalized assistance, engaging reports, and fun/trackable goals

First-Year Real Estate Agent Start-Up Costs 

After you successfully complete your education requirements and pass the exam, there are some key investments to be aware of as you move forward into your exciting new career. Here are the nine top start-up costs that first-year real estate agents should budget for in order to excel on their chosen career path. 

Broker and Desk Fees 

The brokerage firm that sponsors you when you start your real estate career will either take a fixed or graduated split commission on every property you close, or they may charge a flat brokerage fee instead. Some also charge a desk fee each month that covers resources such as office space, use of supplies, mentoring, and access to co-working teams. These rates can vary widely, but the transactional fee model that uses an a la carte system is growing in popularity due to its low monthly rate which typically starts around $35 - $75, with the option to add on more services as you need them.

You can learn more about selecting the best Broker for your needs here.

REALTOR® Association Fees 

Joining the National Association of REALTORS® (NAR) comes with a wide array of membership perks, including:

  • Marketing guidance, tools, content, technology, and solutions
  • Distinct designation as a REALTOR®
  • A network of millions of associates
  • Exclusive discounts on insurance, vehicles, tech, and marketing
  • Policy advocacy
  • Research, publications, and advanced training to keep your career growing

Though it's not mandatory to join, these benefits have helped make NAR the largest trade association in the country, with 1.4 million members. You join at the local level, which also includes state membership, and national dues are $150 (prorated your first year) plus $35 for the certification assessment. Your local real estate board may also charge a monthly fee, and state associations generally have fees that total a few hundred dollars annually, depending on the state. 

Errors & Omissions Insurance

One other benefit of NAR membership is access to top-rated Errors and Omissions Insurance, which protects you against client work negligence claims. You can expect to pay about $30 - $60 a month for E&O depending on your carrier and the coverage options you choose, and the insurance is set up to cover both settlement and court costs.

Health Insurance 

Because you are typically a self-employed independent contractor as a real estate agent, finding a health insurance plan that works best for you is a key to avoiding costly medical bills. Average monthly costs for health insurance are $450 for an individual and $1,150 for a family. Some brokerage firms help cover your monthly premiums, and this can be a good question you ask when you're interviewing potential Sponsoring Brokers.

Continuing Education & Professional Development 

Staying on top of market trends and advancing in your career requires professional development, and some states mandate that you complete Continuing Education (CE) courses to finish your real estate education and retain your license. The costs for this can vary by state, and electives as low as $20 are available to help you enhance your real estate business. Required courses typically start at around $50 and may reach a few hundred dollars or more.

Some CE is dues-based and costs a few hundred dollars a year, while other classes have one-time fees. Additionally, conferences, designations, and certifications can help you network, grow your knowledge base, and attract a growing pool of clientele interested in your particular specialties. The great news is that as your sales increase, you can invest in CE when you see fit. This is one major advantage a real estate career has over other paths, which often require you to pay for and complete years of education upfront.

MLS Fees 

Multiple Listing Services (MLS) is a network consisting of 580 regional databases that real estate professionals use to cross-connect buyers with residential properties. Typically, your real estate brokerage firm will grant you member access to an MLS in your area. If they choose to pass the fee on to you, you'll pay about $150 - $300 annually in MLS dues per database.

Marketing Expenses 

Marketing your new real estate business includes setting aside funds for a real estate website, email provider, online advertising, business cards, social media tools, mailers, signage, and other marketing materials. REALTORS® report earning about 19% of their business from past clients and referrals, but in your first year, you'll likely need to invest a little more into advertising in order to build up your client base. Your total costs for 12 months of marketing will likely top $1,000.

To save money as a new agent, consider using self-design tools like Canva to make fliers, brochures, and business cards. Canva’s paid monthly subscription starts at around $13.

Mileage and Vehicle Expenses

Most NAR members report that their biggest business expense is vehicle expenses, which REALTORS® say costs them about $1,200 monthly. This is largely due to the fact that full-time agents drive more than the average person, often logging over 20,000 miles a year, and therefore need to carefully budget for gas, wear and tear, repair bills, and preventative upkeep. Apps like MyRouteOnline can help save you on mileage, fuel costs, and time so that you can get to your sales faster and for less money.

Not sure which vehicle to choose to showcase your professional role to clients while keeping your transportation budget healthy? Take a look at our guide to the best vehicles for real estate agents.

Income Taxes 

If you are a self-employed agent, you'll also need to budget for self-employment income taxes. Your first year, you can file using the regular April 15th tax schedule, and then the IRS requests that you set up quarterly payments. The key to optimizing your taxes is keeping track of all your deductions, including work-related fuel, mileage, and repair charges, as well as office supplies, software purchases, real estate Broker fees, and marketing expenses. You'll record these on federal Form SE (Self-Employment) and transfer the balance over to Form C to figure your taxable self-employment income, which is taxed at 15.3%.

If your Broker plans on sending you a W-2 form with a record of your income and the taxes they deducted, you can figure your taxes using the traditional method because you're considered an employee rather than self-employed.

With just a little planning, you'll be well prepared to navigate your initial year start-up costs and successfully launch an exciting real estate career. Understanding what to expect when creating your budget helps ensure that you'll make a smooth transition from real estate student to stellar seller in no time!

Ready to Get Started in Real Estate With The CE Shop?

Our industry-leading Pre-Licensing courses are everything you need to get licensed and begin your new career in real estate. Enroll now and get started on your future today.