How much does it cost to get a real estate license?
How much does it cost to get a real estate license?
$500 – $1,500 average real estate license cost
Real estate license cost
A real estate license costs $500 to $1,500, depending on your state. Real estate schools cost $250 to $700. The realtor test costs $75 to $200, plus an application fee of $125 to $300. Most states—including Texas, Florida, and California—require a background check for a real estate license.
| Fees | Average cost* |
|---|---|
| Pre-licensing education (real estate school program) | $250 – $700 |
| State licensing exam | $75 – $200 per attempt |
| Background check fee | $50 – $100 |
| State application fee | $125 – $300 |
| Total average cost | $500 – $1,500** |
*Costs vary by state. **$1,500 total cost includes two exam attempts.
Pre-license education
The first expense when pursuing a real estate career is to enroll in a pre-license course at an accredited real estate school, which costs $250 to $700. Costs vary depending on how many credit hours are required and whether you attend in-person or online.
Most real estate education programs are 60 to 180 hours. Students must complete the coursework before sitting for the real estate exam. There are many financial aid options available to help cover the costs, including grants, scholarships, and loans.
State licensing exam
Once you’ve completed your coursework, you’ll need to register for the real estate exam for your state, costing from $75 to $200 per attempt. If you fail the test, you’ll pay another fee to try again. The real estate test is considered difficult, and many people need two or three attempts to pass.
Save time and money by choosing a real estate school with a better exam pass rate. This can improve your chances of passing the test on the first try.
Background check
A background check costs $50 to $100, depending on your state. The real estate board uses fingerprinting and background checks to assess an applicant's criminal, financial, and employment history for a real estate license.
A history of criminal convictions, especially those related to fraud, embezzlement, or violent offences may result in the applicant being denied a real estate license.
A poor credit history, significant outstanding debts, or bankruptcy in the past may raise concerns about the applicant’s ability to handle financial transactions.
Any prior disciplinary action or complaints within the real estate industry may result in denial of licensure.
State application fee
After passing the exam, you’ll pay another $125 to $300 fee to submit your real estate license application with the state. The fee covers the cost of reviewing your course certificates, background report, and other required documents for your license.
Real estate license costs by state
The cost to get a real estate license varies by state. California, New York, and Texas are among the most expensive states with higher course costs and exam fees. States that offer cheaper real estate classes and lower application and test fees include Alabama, Arkansas, and Georgia.
In addition to the costs, some states have a more challenging licensing process, including:
Texas has a comprehensive licensing process requiring 180 hours of pre-licensing education and a difficult test with a pass rate of less than 60% in 2023.
Colorado requires 160 hours of education and two exams to pass, including a state-specific and a national exam.
California requires 135 hours of education and a passing score on the state exam, and a sponsoring broker to oversee your work as a new agent.
Recurring real estate license costs
The cost to maintain a real estate license depends on where you live and the brokerage you join. There are brokers who charge a monthly fee, some who take a commission on each transaction, and others who use a combination of both.
Along with brokerage fees, realtors have various other expenses like insurance, association dues, continuing education, license renewal, and marketing costs.
| Recurring licensure expenses | Average costs* |
|---|---|
| Desk fees | $100 – $500 per month |
| Brokerage commission | 50-50 commission split percentage |
| Errors & omissions insurance | $600 – $1,200 per year |
| Membership dues | $400 – $500 per year |
| License renewal fees | $200 – $300 per two-year period |
*Costs vary by state and brokerage company.
Desk fees
Once you’ve earned your real estate license, you’ll need to “hang your license” with a broker. The broker may charge a brokerage or desk fee of $100 to $500 per month to cover the costs of office space, administrative support, access to office resources, and mentoring services for new agents.
Paying a higher desk fee often means you get a better commission split, so you keep a larger percentage of your commission. The risk of a high desk fee is that you could lose money during months with no home sales or purchase commissions.
Brokerage commission
The average real estate commission in the US is 5% to 6% of the home’s sale price, divided between the buyer’s and seller’s agents. From that, the agent must then split their share with their broker. Most agents start out with a 50-50 split, dividing the commission equally with the broker.
In return, the broker provides the agent with client leads, marketing support, and administrative assistance. Experienced real estate agents need less support and can negotiate a better commission split where the broker only takes 20% to 30%.
100% commission brokerages allow agents to keep their entire sales commission but charge a high monthly desk fee of $1,500 or more.
Errors & omissions insurance
Errors & omissions (E&O) insurance costs $600 to $1,200 per year. This coverage shields agents and brokers from financial losses in case they are sued for mistakes or omissions in their professional duties.
The E&O policy covers legal costs, court fees, and potential settlements that may arise from claims including:
Providing inaccurate or misleading information about a property
Failing to disclose a material defect or environmental hazard to a buyer
Neglecting to negotiate a contract on behalf of a client properly
Failing to supervise a subordinate agent
Membership dues
Brokers often encourage agents to join the local Realtor board and the National Association of REALTORS® (NAR), with a yearly cost of $400 to $500 for both memberships.
The NAR 2024 member dues are $201 per year, which includes $156 for membership, plus $45 for a special assessment to cover a consumer ad campaign. Local Realtor board dues vary by location.
While NAR membership is not mandatory for most realtors, it is worth joining for their benefits and services. They provide access to ongoing education, technology, networking, and legal support.
Additional fees
Throughout your real estate career, you will incur additional ongoing expenses, including:
Business costs – Expenses of $100 to $200 per month for cell phones, internet, client lunches, and other expenses are typical.
Marketing costs – To market yourself to potential clients, expect to spend $1,000 a year or more for business cards, a website, social media advertising, flyers, and direct mail campaigns.
Graphic designers charge $300 to $1,500 to create a logo, business cards, brochure, or custom direct mailer.
Web design costs $500 to $3,000 for a simple site with 1 to 3 pages.
Travel costs – Real estate agents spend $2,000 to $5,000 per year for the cost of a car, insurance, gas, maintenance, tolls, and parking fees when showing homes to clients.
Continuing education – Many states require 12 to 36 continuing education credits every two years to renew a real estate license. Courses typically cost $20 to $50 per credit hour.
License renewal fees – Realtors renew their licenses every two years. Timely renewal fees average $200 to $300.Late renewals cost extra.
Penalty fees – Late renewals and bad checks incur fees of $50 to $100 on top of the renewal costs. Missing the required continuing education or a lapse in E&O insurance can also result in additional penalty fees.
Check with your broker to confirm whether your brokerage or desk fee includes business cards or a dedicated page on the company's website for your bio and real estate listings.
Real estate license FAQs
What can you do with a real estate license?
With a real estate license, you can legally participate in real estate transactions and manage properties. The most common careers are real estate agent, broker, rental property manager, real estate appraiser, or real estate investor.
How do you get a real estate license?
Each state has different requirements for obtaining a real estate license, but most require you to:
Meet the eligibility requirements – Be 18 years of age, have a high school diploma or equivalent, and be US citizen or legal resident.
Complete a state-approved pre-licensing education program – This includes 60 to 180 classroom or online hours, depending on the state.
Pass the state real estate exam – The exam tests your knowledge of the basics of real estate law, principles, and practice.
Apply to your state’s real estate licensing board – The application includes a copy of your completed coursework, exam results, and a background check. Fees vary by state.
Is getting your real estate license worth it?
Getting your real estate license is worthwhile if you want to work in the real estate industry. Real estate professionals have the potential to work a flexible schedule while earning a good income. However, real estate can be a demanding career, and your income is greatly impacted by the market in your area.
How long does it take to get your real estate license?
The time it takes to get your real estate license depends on the state where you plan to work and how much time you can devote to the coursework. Expect it to take from 2 to 6 months to complete the pre-licensing requirements and pass the state exam.
Do you need a real estate license to flip houses?
In most cases, you do not need a real estate license to flip houses. However, there are many benefits to having a real estate license when flipping homes, such as:
Access to the Multiple Listing Service (MLS) database of homes for sale.
Knowledge of real estate laws and regulations to help you avoid legal problems.
Networking opportunities with other real estate professionals, appraisers, and lenders.
More importantly, having a real estate license when flipping homes can save you money. You can represent yourself as the seller, saving the commission you would otherwise pay to another agent. You also have better market knowledge to price the property correctly and negotiation skills to secure better deals.
Can you get a real estate license with a felony?
Yes, it may be possible to get a real estate license with a felony, but it depends on the state in which you are applying. You must disclose your felony conviction on your real estate license application and be prepared to explain your crime and how you have been rehabilitated.
Your state’s licensing board will then consider the nature of your crime, when it occurred, and whether you have other criminal convictions when deciding whether to grant you a license.
How to save money on a real estate license
Getting a real estate license is an investment in your future, but there are some ways to reduce your costs, including:
Online vs. in-person coursework – Online courses are cheaper since there is no physical classroom space and no commuting costs.
Discounts and financial aid – Real estate schools may offer discounts through the local real estate association. Financial aid scholarships, grants, and loans are common.
Self-study options – Some states allow self-study using real estate exam prep books and online resources instead of enrolling in a formal course.
Be prepared – Avoid costly exam retakes by studying and working with a real estate tutor near you to prepare for the test. Invest in quality study materials and practice tests to ensure you pass the exam on the first try.
Negotiate broker fees – Take time to investigate commission splits and desk fees in your area. Look for a brokerage that offers competitive terms and valuable services.
Tax deductions – You may be able to deduct your real estate license expenses, such as your education or exam fees. Hire a tax professional costing $100 to $500 on average to maximize your deductions.
We use our proprietary database of project costs, personally contact industry experts to compile up-to-date pricing and insights, and conduct in-depth research to ensure accuracy in all our guides.