how much does it cost to become a real estate agent?

I love real estate; becoming a real estate agent was one of the best decisions I ever made. When you become a real estate agent, you give up a steady paycheck and it takes a while to start making money. Unless you can start out as an assistant making an hourly wage, you are going to have to save money before you become a real estate agent. It could be a month, three months, or six months before you sell a house and earn a commission check. It is very important that new agents plan for the time they will not be making money or it can make it very tough to succeed in this business.

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How much money can real estate agents make?

It is risky becoming a real estate agent because you do not have a steady income in most situations and it can take months before you make a sale. It can also take years before you become an established agent earning a steady income. Many people ask themselves why anyone would want to become a real estate agent under these circumstances.

The biggest reason people want to become real estate agents is that they can make a lot of money. In this article, I talk about exactly how much money you can make as a real estate agent. The average income for a full-time real estate agent is $54,000, but many agents make much more. You also are able to run your own business, create your own schedule, and invest in real estate more easily as an agent. I talk much more about investing in real estate in my complete guide to purchasing long-term rental properties.

Why does it take so long to make money as a real estate agent?

One reason it takes so long to make money as a real estate agent is that it takes a long time to close on a house. Once a house goes under contract, it usually takes 30 to 40 days for that house to close. If real estate agents are able to get a deal right after they get their license, they will not be paid until the house closes at least a month later.

It can also take a real estate agent months or longer to get their license. I talk about how hard it is for an agent to get their license here. If potential agents quit their jobs before they get their licenses, there will be a couple of months without any money while they are getting their license.

It takes time to build up business as a real estate agent. When starting out, an agent’s circle of influence is the best opportunity to make sales. Friends and family are the easiest targets to make sales, but they may not be in the market to buy or sell right away. Finding buyers or sellers can take months for a new agent, and then you have to wait for properties to close.

If you are interested in taking online classes, I took my real estate classes and I take all of my continuing education through VanEd.com. My assistant got his license through Real Estate Express.

How long does it take a real estate agent to start making consistent money?

The key to being a successful real estate agent is getting leads. The more leads you get, the more people become your clients, and the more sales you will have. I have seen new agents go into real estate with everything they have. Those agents have closed one or two deals a month in their second or third month in the business. After six months, they really start to take off and have consistent sales and income every month.

I have seen other agents get stuck educating themselves and preparing to be an agent for months without going after business. It takes them a year or longer to start making consistent money and some give up before they make it. It is hard to say it will take three months or six months before a new agent will make enough money to support themselves because everyone is different. I would plan on it taking at least six months.

Remember, there is no better way to learn the business than to start working with clients right away. The more people you talk to about being a real estate agent, the better chance you have of making sales.

How to get leads as a real estate agent.

How much money will you need to be a successful real estate agent?

Not only do you have to worry about working for months as a real estate agent before you start making money, you have to spend money to make money as an agent. What an agent has to pay for will depend on the agreement the agent has with their broker. Some brokers will help an agent with costs like MLS dues, board dues, and advertising. Other brokers will not pay for anything, but they offer a larger commission split to the agent.

A real estate agent will most likely have to pay for E and O insurance, MLS fees, advertising, marketing materials, business cards, mailings, office fees, and the cost of getting a license. This assumes that an agent has the basic materials needed such as a smartphone, laptop, desk, chairs, and other basic supplies most agents need.

For more information on how to become a great real estate agent, check out my book, How to Make it Big as a Real Estate Agent, available on Amazon as an eBook or paperback.

Here are the bare minimum costs an agent will have when starting out in the business 

  • Obtain license             $1,000
  • Initial marketing           $500
  • Insurance                         $200
  • MLS and board dues    $200

Total: $1,900

Here are the minimum monthly costs an agent will have

  • Marketing                      $250
  • Insurance                        $40
  • MLS and board dues    $50
  • Office fees                      $200

Total: $540

These are the minimum costs needed to get started, and these costs vary from state to state and market to market. I would always check the costs before you make the decision to become an agent. Talk to other agents and brokers in your market to see what their costs are. Some other costs to consider are that you will be driving much more and you will have higher fuel costs. You may have to take clients out to lunch or dinner. You may have to buy for sale signs or name riders.

How much money do you need to save before you become a real estate agent?

I would calculate all your costs based on a realistic plan of becoming an agent. That plan should include when you will start making money and how much money you will spend on marketing and expenses. If you want a basic idea of how much you should save, I would save six months of living expenses plus $700 per month for expenses once you become an agent. That does not include the initial start-up costs of becoming a real estate agent such as getting your license. The cost of being a real estate agent is why many people start as part-time agents, but I explain here why it is very hard to make it as a part-time real estate agent.

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51 thoughts on “how much does it cost to become a real estate agent?”

  1. Hello Mark,

    Thanks for all the great articles and tips. I started to pursue my real estate dream when I was younger but never finished taking my classes due to work. I was going to night school. I finished 2 out of the 3 needed in California. My question is do I still get credit for the classes I already took? Do I need to start all over and take them again? Thanks

  2. hi mark, im 17 years old and going to be a senior in high school and have decided i want to become a real estate agent after finishing high school, i dont plan on going to college because i’ve read many places that it doesn’t teach you real estate and just wastes time and money. I’m going to go get my real estate liscence when i graduate. Do you think this would be a good idea? I have a decent amount of money for being a 17 year old and would definitely have enough for the starting expenses. And theres one more question that i haven’t gotten the answer to yet..Do real estate agents usually buy a house and then sell it or they just sell it and get commission back?

  3. Mark,

    Thank you for the information. I currently am a Merchandiser at the Home Depot. My wife and I home school four children. We always work so well together in our marriage and were thinking about tag teaming! Would you say it would be beneficial in the first year to keep my job which is 5-230 monday-friday and weekends off while I build my clients? A

  4. Hi Mark,
    Let me first say how much I appreciate all of the information you provide here. I am a recent real estate student who left my sales job in the construction industry to study and focus on real estate studying full time. The classes have been relatively easy for me,and I was aware of the costs involved initially but upon reading more they are even more than expected. My boyfriend and I are trying to leave the state we are in currently, most likely in the next 1-2 years and my question to you is, do you feel it is worth it to invest the extra money to go ahead and take the exam and get my license in this state for experience ? I know that I wouldn’t want to invest all of this money and tap into my savings account in a state we want to leave in the next year or two. Additionally, with networking I would be working to build relationships in an area that I would be soon leaving and If I went ahead, I know I would try to cut corners in marketing materials it would be hard to sell a house that way . I have only invested 200 dollars or so at this time with the online school and the classes will expire in August. Do you feel it would be wiser to obtain a job that is in the “real estate” field such as an assistant manager in an apartment complex or something of that sort just to get some experience on my resume for now ? That way hopefully I can go through with the testing and all of the expenses involved in a license in another state? I feel bad throwing away the work I have done in the past couple months however at this point I still am not in it for that much money and want to be realistic and sensible about the situation. Appreciate any advice you have to offer ! Thanks so much for your time, Catherine

    • I would check with the state you want to move too. Sometimes you do not have to take all the education again if you already have your license in another state.

  5. You have written wonderful articles! They have been very helpful to my husband and I. We are both looking into becoming real estate agents. I do have to ask is it a high stress job. When we bought our first home it was one of the biggest stresses for us. There was a lot of anxiety which I’m sure it is stressful for lots of buyers and sellers. If it is very stressful how do you manage that?
    And what tips can you give about making your clients as comfortable and relaxed as possible to make transactions a peaceful process.
    Thank!

    • It can be stressful if you let it be. Part of being an agent is helping it be less stressful for clients. Knowing your stuff and doing your job well is the best thing you can do

  6. Hi Mark. First of all, I want to say how much I have enjoyed exploring the articles you have written. I have spent a good deal of time researching as much as I can about becoming a real estate agent and hope to begin my classes in the next few weeks. I am currently a part-time college instructor, but that job will be ending in Sept. of 2017 due to curriculum restructuring, so I’m hoping to be making some money as a real estate agent by then. Even though I am working part-time now, my schedule is very light and so I have a great deal of time to devote to this new endeavor. I love teaching and it seems as though whatever I have ever gotten involved in, I have ended up teaching in some form or another. So while I am really excited about this new challenge of building a real estate career and hopefully doing a few flips along the way (My husband is an ex-contractor and we have flipped a few houses in the past), I would also like to learn the business as quickly as possible and then pass my knowledge and experience along to others as a mentor, or maybe possibly teaching for a real estate school. Do you think this goal might be feasible?

    And thank you again for the wealth of free information that you offer. I can’t tell you how helpful and inspiring it is!

  7. Mark, what do you consider 6 months of living expenses? rent plus bills? I am not sure if many people have all that saved ya know? I am looking to jump in head first as soon as I get licensed but only purchase the necessary marketing tools (after real estate fees…)

  8. This is for Julianne…
    Maybe you should just mind your own business.! It is folks like you that make this world a difficult place to live in. If you don’t have anything nice to say to people, just shut up!
    Mark, great information and I am about to take the course and be on my way to be an awesome realtor just like you!

  9. I really like the content of your articles, very clear, simple and understandable! I moved from Europe to USA and I am planing on starting a career in real estate, so I will visit your website for guidelines. Thank you !

  10. Hey Mark! This is a great article out of many that I have found & read. I am currently a senior in high school & since my father is a real estate investor, he is the reason why I am so interested in real estate. It changes all the time & once I graduate I intend to sign up for my class, take the exam, & become a realtor & learn the system! Overall this was a good read for me & I cannot wait to start next year.

  11. Hola Mark!
    I’ve been a journalist for 25 years and am seriously considering a career change! I’ve worked at the local, national and international level and am wondering what you think about how a TV career might translate into a successful real estate career?
    I like your writing style; simple, clear and to the point.
    Thanks, Orly

    • Hi Orly, thank you for the comments and compliment! I think real estate is a perfect career for most people who are outgoing and love to talk to people.

  12. My stepson has his license and has signed with Keller Williams. I am tell him to look for a job because he has bills every month. What else could he do in real estate to help him earn money? Their is no broker assistant job at his office and he can be one at another real estate location.

  13. Hello,

    I just passed my school exam and getting ready to schedule my state exam. I am so excited to start working as an agent. I’ve been searching for articles to get me prepared. This article was great! Thank you!

  14. As a junior in high school, and seeing a great mentor of mine make it in this industry, I was completely awed at the way this business works, because it truly is unique from anything else. I love the ever changing business real estate is, and how hard work truly will eventually pay off. I do get told a lot its not a good career path, but your articles give me my self assurance there is alot to gain from this industry! Thank you

    • Glad to hear Max! There are many people who talk bad about real estate, but most people aren’t that successful at anything. Real estate allows those who have the drive and ambition to make it.

  15. Hello Mark!

    First off, I want to Thank you for all the Information you have posted on here. I am looking to dive into the real estate market and finding your page has been very educational and a boost in encouragement to move forward. But, the real reason I started to write this comment was because what Julianne was saying about your page. Obviously they didn’t read enough because everything they complained about was written on your page, somewhere. I have been reading through many of your articles and I almost feel ready to take my classes. I’m just debating the online, or actual class. Like you said though, I might be better off with doing the actual class since I do have the time. Thanks again!

    • Hi Chris, I think it is better in person if you can. yes, some people just like to complain instead of doing the work!

  16. Stumbled across this site looking for other information, but read it out of curiosity, and then dismay. I know many people like to play Grammar Police, roam around the Net hoping to find misspelled words or bad grammar they can ‘pounce’ on like a cat with a toy mouse. I hope my comment doesn’t come across that way, as it is not my intention. However, as the site is both informational and offers additional materials that can be bought for a nominal fee, I was genuinely surprised at the number of syntax, style, grammar, and structural errors in part because you ARE also selling booklets(?) with more information, so in a sense there is an element of commerce. For that reason, IMO the writing should be more polished, at the least have a copy editor do an editorial proofread.

    Your audience is the person considering getting into real estate, as a career or as a second, part-time job perhaps. Yet you use many terms that the average layperson probably wouldn’t know without defining those terms. You refer often to needing a broker or broker assistant, yet never explain why, nor explain the difference between agent, broker, broker assistant.

    You mention the requirements for being a licensed agent, broker vary from state to state, but don’t provide any clear-cut examples. As for the real estate exam itself, you do not talk at all about the kind of questions that would be on the test, to give the reader an idea of what to expect. There isn’t any information on what passing the test is dependent on–answering at least 70% of the answers correctly? How many questions are on the test? If you fail, how soon can you re-take the test? Who administers the test? Where do you go to take the test? How much time are you given to take the test?

    Much of the information is repetitive, the same (often unclear) content appearing in five or six other paragraphs. Often you mentioned, vaguely, “different licensing laws and requirements” but then didn’t elaborate on them. And to play the Grammar Police (sorry!), there were numerous errors in subject-verb agreement, poor transitions from paragraph to paragraph and topic to topic. And many of your hot links simply take you to the same web page.

    Have you ever taken a Business Writing class? You obviously are enthusiastic about real estate and imparting why it’s a career or field of interest to consider. Unfortunately though, the execution is unclear and therefore the reader doesn’t come away having really learned anything. Hence the suggestion on taking a writing class. It would teach you what you should say in the most succinct fashion, which would greatly benefit your readers.

    • Hi Julianne, thank you for the comment! My focus is getting information out to my readers to help them as much as I can. I have over 100,000 people come through every month and so far only a couple have every complained about grammar and it used to be a lot worse in the beginning! There are actually many articles that explain the things you are looking for including an article about why agents have to hang their license with a broker, what are the license requirements for each state etc. I would read through the real estate agent category to see them all.

      Every state has different tests and questions and there is no way I have the man power or time myself to research each states test. I am sure there are other resources online for learning about an individual state test.

      Good luck!

  17. Hi Mark, I am currently working towards my real estate license, and Ive heard that once you sign with a company to become their agent, you get paid X amount a week until your first commission check, then everything you’ve been paid to survive is taken from that check, is that true? OR do you have no sense of income whatsoever until you close your first house? Thank you for the helpful article!

  18. Your articles have provided so much insight for me. I am graduating with my Bachelors in Economics this spring and am trying to prepare to get licensed and start a career in real estate right away. I have heard becoming an assistant on a team is a good way to gain some experience while receiving hourly pay (only 12-14/hr in my area). What are your thoughts on this? Is it more beneficial to receive low but steady pay while learning the ropes or jump in right away? Thanks again for sharing your knowledge and experience!

  19. Hi I’ve been researching on becoming a realtor and from what I was gathering is that I probably should keep my full time job until I get a feel for the real estate life and maybe make my first sale or 2 and put that $$$ away to become a full time realtor. Is that how you would recommend

  20. Making it as a Real Estate agent is all about your marketing/sales funnel. Setup a great funnel that produces leads and you’ll be well on your way to success. You can learn the rest as you go.

    Too many agents try to be experts first with no funnel. They become experts but never reach success.

    • I have thought about it, but I don’t for a few reasons
      1. they are more expensive in general and take a higher investment
      2. they can be harder to finance with balloon payments
      3. The leases are longer, but it is also much harder to find a tenant. Units can be vacant for months or years
      4. The hot commercial areas can change very quickly over time

  21. Hey Mark, i recently graduated from high school and im working my way towards becoming a Realtor. I wanted to let you know your doing a great job and your work is really inspiring and helpful.

  22. Mark, you wrote this article just in time. Currently, I’m a part-time agent and I have been working with my mom to find a home. We finally got one under contract and I say finally because the Austin market is hot. We close on her home in July and I close on my home in the next 14 days. My plan is to go full time by the end of July. Your articles are great and I like your book How to Make it Big in Real Estate: From a millionaire agent. With my current job demanding lots of time its very hard to be a part-time real estate agent. Especially in a hot market that I am in. Your book helped me to start focusing more on finding sellers to represent. Representing buyers with the full time job I’m working is next to impossible. I can’t see myself making a commitment to show a home and then have to reschedule because I have to work late. Anyways thanks for sharing your experience and I really enjoy the articles.

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