How Much Does a Real Estate License Cost?

A real estate career promises high earning potential, professional freedom, and the ability to help people find their dream homes. It’s a rewarding journey that many are eager to begin. But before you start, you need a real estate license.

Like any professional certification, getting your real estate license requires a financial investment. In this article, we’ll explore the costs associated with obtaining a real estate license.

Similar requirements across states

The requirements for obtaining a real estate license remain pretty consistent across all states. No matter where you are located, you’ll have to do the following:

• complete some amount of pre-licensing education,
• pass a licensing exam,
• submit a formal application to a state regulatory body, and
• do a background check.

The costs associated with each requirement, however, vary greatly from state to state.

Why does the cost differ so much from state to state?

Part of the state-to-state disparity in overall cost is due to the variability in educational requirements. Michigan, for instance, only requires 40 hours of qualifying education (QE), whereas Ohio requires 120. The average cost of qualifying education for Michigan residents, therefore, will be much lower than that of an aspiring Ohio agent.

The fees associated with the exam, background check, and licensing application vary widely from state to state, too. The exam can cost less than $40 or more than $100. The background check can range anywhere from $5 to $125. And the licensing application costs less than $100 in some states, whereas in other states, it costs over $200.

Estimated real estate license cost

We compiled our data from State Requirement, an aggregator of state licensing requirements. Using this spreadsheet, we calculated the average cost of each step across all fifty states.

The below table offers average estimates of the costs associated with each step. Keep in mind that these are averages, and not indicative of the costs associated with any state in particular.

On average, the total cost of a real estate license ranges from $600 to $900. It’s tough to nail down an estimate that applies to every state, but for most people in the United States, this estimate will apply.

Make sure to research your state’s requirements for an exact cost. The above table is meant to paint a general picture of the costs of each step.

Education requirements

On average, most states require between 60 and 90 hours of pre-licensing coursework. Some outlier states, like California and Texas, require much more: 135 hours, and 180 hours, respectively.

In addition to the variability in required pre-licensing education hours across states, there are other factors that contribute to the wide range in possible cost: the real estate education provider; the course delivery method; and whether you choose to enroll in a test prep class or purchase additional study materials, such as flashcards or textbooks.

In-person courses typically cost more than their online counterparts, so this can be a way to save money. But make sure to do your research — the cheapest school is almost certainly not the best. Look for schools that provide an abundance of courses and resources, not just the bare minimum. And make sure it’s highly rated, with good customer service. Investing in a good education provider sets you up for future career success.

Exam, licensing, and background check

Once you have completed the required education, you’ll take the real estate exam, which consists of state and national portions. The exam in most states costs less than $100.

The cost of the licensing fee can vary depending on the state, but it is typically between $100 and $300. This can include several costs, like recovery and research fees.

The background check is the most affordable part of the licensing process, with most states charging between $40 and $70. This covers the cost of fingerprint processing and a comprehensive check of criminal history.

What about after licensing?

Now that we’ve covered the costs of obtaining a license in the first place, what about all the costs after you start? As a real estate agent, even though you must operate under a sponsoring broker, you’re still self-employed.

As a result, you have to cover many costs associated with getting your business up and running, just like any entrepreneur. Below are some of the costs that come with a career in real estate.

• Continuing Education – After you have obtained your real estate license, you must complete continuing education courses to maintain your license. The requirements for continuing education vary by state, but most require between 12 and 36 hours of coursework every two years. The cost of continuing education can vary, but it is typically between $100 and $300 per year.
• Association Fees – Many real estate agents choose to join a professional association, such as the National Association of Realtors (NAR). The cost of joining these associations can vary, but it is typically between $100 and $500 per year. While joining an association is not required to obtain a real estate license, it can provide you with access to valuable resources such as access to the multiple listing service (MLS) and networking opportunities.
• Marketing and Advertising Costs – Once you have obtained your real estate license, you will need to invest in marketing and advertising to attract clients. The cost of marketing and advertising can vary widely, depending on the methods you choose. Some popular methods include online advertising, print advertising, and direct mail, but one of the most important methods today is social media. It’s important to create a marketing plan and budget when starting out — the most successful agents research their target market and cater their strategies to the demographic.
• Additional Costs – In addition to the costs outlined above, there may be additional costs associated with obtaining a real estate license. For example, you may need to purchase business cards, a website, and other marketing materials. You may also need to invest in a reliable vehicle for showing properties to clients. These costs can add up quickly, so it is important to factor them into your budget when planning to obtain a real estate license.

The bottom line

Obtaining a real estate license can be a significant financial investment, but it can also be a lucrative career choice. The total cost of obtaining a real estate license can vary widely, depending on the state and the individual's circumstances. However, on average, the total cost of obtaining a real estate license can range from $600 to $900.

It is important to factor in all of the costs associated with obtaining and maintaining a real estate license when planning your budget. By doing so, you can ensure that you have the resources you need to succeed in this exciting and rewarding career.

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