How Much Does It Cost To Become a Real Estate Agent?

How to Negotiate When Selling a Home

Unless you have been living under a rock lately, you probably know that real estate is hot right now. Homes around the country are routinely selling for 20% or more over asking. Real estate agents are raking in the money, and maybe you want a part of that?

Income as a real estate agent heavily depends on your location. The number of hours worked per week will also influence income. Agents that work 60+ hours could make more than $170K a year in some locations. Real estate brokers earn more, but let's hold that thought.

Let’s discuss what real estate agents do, the requirements to become an agent, and how much it typically costs to become a real estate agent. Before you think about it as a side hustle or a new career, review this basic overview of the job and the costs associated with becoming a real estate agent and realtor.

What Real Estate Agents Do

Agents help people buy and sell properties. Agents representing the seller (also called “listing agents”) will officially list the property for sale within the Multiple Listing Service, or MLS. They may take pictures of the property to include in the listing, suggest improvements to boost the home’s value, stage the house and help the owner determine a good selling price.

Buyer’s agents help real estate buyers find a property to buy. They also interface directly with the listing agent with any questions or concerns the potential buyer may have. They also help the buyer build and submit an offer to buy the property.

If a buyer submits an offer, both party’s agents manage all the paperwork. This includes the initial offer and any subsequent counteroffers. They also make sure both parties know any particular sale requirements, such as mortgage contingencies, home inspections, and closing dates.

Real estate agents get paid a commission on each sale. Commissions are typically paid as a percentage of the sale price (usually between 5 and 6%). A flat fee commission can also happen in some circumstances.

In addition, real estate agents must work underneath a real estate broker.

Brokers go through additional training and are the responsible party when properties are bought or sold by one of the broker’s agents. Brokers take a cut from the agent’s commission on every transaction, and the amount the broker takes will vary.

What Are the Requirements To Become a Real Estate Agent?

To be a real estate agent in the United States, you need to be licensed. Different states have different requirements, but all states require a state license to become a realtor. And costs will vary from state to state. For example, real estate agents must be at least 18 years old and legal residents of the United States.

You will need to take a training program from an accredited real estate school in your state before sitting for the state real estate exam. Training programs come in all shapes and sizes and can range from $300 to $600 or more, depending on the program.

Each state requires a different number of training hours before taking the exam. For instance, Arizona requires 90 hours of in-classroom or online training before taking the state exam. California requires 135 hours, Texas requires 180 hours, and Montana only requires 70 hours.

Once you’ve completed the required training hours, you can schedule a time to take the state real estate exam. Depending on the state, these costs will vary, but typically will not exceed $200 or $300 to take the state exam. Many states offer the test for less than $200.

Once you pass the test, you can then apply for your license. The fee for a real estate license will vary from state to state. Plan on between $250 and $400 to get your license from the state. Your state will mail you an official license certificate.

At this point, you are a licensed real estate agent. In total, you will likely pay between $700 and $1,200 to be a licensed real estate agent in your state. But remember, the fees don’t end there.

Real estate agents work underneath a licensed real estate broker, and the broker will take a cut of every property transaction. However, this happens after you become an agent and start working, so it doesn’t count toward becoming a real estate agent.

The Difference Between a Real Estate Agent and a Realtor

Though the terms “real estate agent” and “realtor” are often used interchangeably, they are not the same thing.

Realtors are real estate agents who are also members of the National Association of Realtors, available for a fee of $150 per year. Over 1.5 million real estate agents are also realtors, adhering to a stringent code of ethics set by the organization.

The organization also provides its members with access to continuing education tools, in-depth market data, special discounts, and various other membership benefits. No other licensing is required beyond being a licensed real estate agent to be a realtor.

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This article was produced and syndicated by Wealth of Geeks.

Featured Image Credit: Wealth of Geeks.

Author: Steve Adcock


Steve Adcock quit his job after achieving financial independence at 35 and writes about the habits millionaires use to build wealth and get into the best shape of their lives. As a regular contributor to The Ladders, CBS MarketWatch, and CNBC, Steve maintains a rare and exclusive voice as a career expert, consistently offering actionable counseling to thousands of readers who want to level up their lives, careers, and freedom. Steve lives in a 100% off-grid solar home in the middle of the Arizona desert and writes on his own website at