Do you remember watching Regis every week ask the person in the chair… “Ready to play ‘Who wants to be a Millionaire?’” The lights went down, the music played, and we would all guess along to see if we’d made the right decision.

The decision to become a real estate agent feels a lot like that. Your heart is pounding, everyone’s got an answer about what you should be doing, you’ve got high hopes, and your friends and family are watching along in both admiration and a little bit of terror.

Now, I know what you’re thinking, and YES! This is absolutely an exciting move! I love being in real estate, I know it’s where I’m meant to be, but no one gave me a true picture of what to expect and I’m frustrated by watching new agents full of enthusiasm fail out of real estate in the first three months because no one gave them a true picture of costs. 

To be direct – It is highly unlikely that a new agent will have a sale in their first two months because they are finding people who are looking to make a move, building trust with their friends and family in this new role, showing houses, and praying that their buyers can compete with the multiple offers happening at this moment. 

Below is my best accounting of what to expect in fees, costs, and investments in those first months BEFORE you have your first check.

I realize the number at the end may feel like a mountain, but I promise that if you don’t have a minimum savings in the beginning the lack of a commission check in those first few months will feel like a lack of oxygen as you go to bed each night until you do get someone under contract. Better to over-save in the planning process than run out along the way.

Okay, let’s break down these getting costs:

Real Estate Classes: $299

To become a licensed real estate agent, you’ll need to complete a state-approved real estate course. The cost of these classes can vary, but on average, you can expect to pay around $299. Education is the foundation of your real estate career, so consider it a valuable investment.

State Test Background Check: $78

Before you can take the state real estate exam, you’ll need to undergo a background check. The fee for this varies by state but generally hovers around $78. Ensuring you meet the necessary requirements is a crucial step in your journey.

State Real Estate Exam: $80

To obtain your real estate license, you’ll need to pass the state real estate exam. The cost of the exam typically runs about $80. Be sure to study diligently to ace this test on your first try.

Business Cards: $50

Investing in business cards is a small expense, but it’s a critical one. Your business cards are a tangible representation of your brand and a valuable networking tool.

Joining the Board of Realtors: $1,200

One of the first steps in acting as a licensed real estate agent is joining your local board of realtors. Some brokerages are not members, so be sure to ask in your interviews if the office you are joining is a Realtor member. Membership is essential for gaining access to the Multiple Listing Service (MLS) and other valuable resources that enable you to serve your clients efficiently. While it may seem steep, it is my belief that this investment is critical for your future success. This fee includes an application fee, local dues, state dues, national dues, and renews every year.

Appointments, Gas, Coffee, and Marketing Material: $300

Getting your first client under contract will require some hustle. Allocate around $300 for appointments, fuel for your car, coffee meetings, and marketing materials to kickstart your real estate career.

Savings for Living Expenses: $5,000 (minimum)

While building your real estate business, it’s essential to have a financial safety net. Aim to have at least $5,000 saved to cover two months’ worth of living expenses. Real estate is a commission-based business, and it might take a little time to get those first commissions rolling in.

Real Estate Sign: $200

As a real estate agent, you’ll want a sign to advertise your services and listings. A quality sign can cost around $200, and it’s an essential tool for attracting potential clients. I put this last because you may not need it for your first few months if you are only working with buyers.

Recommended Minimum Savings To Start With: $7,107

Again, I realize this is more than most potential agents will be expecting as a start up number but I want you to have a true picture of what to expect. There is a world of possibilities in real estate, and a lot of money that can be made. I want your success and longevity in this career and the best way to do that is to start from a sturdy foundation. 

~Tiffany

Looking to get started as a new agent?  Meet with one of our local Brokers!  They are happy to answer all your questions.  Check out our Locations page or send us an email at [email protected] to get started.