How Much Does a Real Estate License Cost

About a year ago, I went through the process of selling my house. The agent, a friend of mine (we will call him Alfred), took home approximately $9,000. I lived in an apartment for 6 months while we built a house in which Alfred made another $11,000. Over the course of 6 months, Alfred made about $20,000 off of me. What was the cost to him? Maybe 10 lunches and just being a friend for 6 years. So, how much does a real estate license really cost?

Let’s start at the beginning. I was at a job where I got calls late at night and on vacation. I was okay with it in the past but with the way the phone calls had been going (micromanaging Indian boss who belittled his employees and expected results (more coming on that in a different post)), I knew that it was time for a change. I went on the search for a new job. While I was doing that I had lunch with Alfred who told me that I would do great at Real Estate. I shot down the idea because in my gut, I am not a salesman. I am a can talk to people all day long, but I am not a seller.

As I wrestled with the idea more and more about a change in career, the facts were staring me in the face. I love going out with my friends, I build great relationships with people I meet for the first time and I know the Nashville area very well. In real estate, you aren't selling a home, you are selling yourself. I am always looking out for my friends whether it is driving their drunk asses home or giving them financial advice. For me, if my friends are successful, then I am in the company of successful people and that makes me a winner.

How hard can it be to really translate caring about people into a business? Not hard at all. It is called real estate. If I am honestly and truly helping an individual or family find their dream house, I am doing good. Buying a home is usually the largest purchase a person makes in their life and I would love to help someone find that and see the joy it brings them. I decided to start the journey. While working full time at my job, I started taking night classes to prep for the national and state exam. For approximately one month I spent my nights in a classroom and then spent another month studying for the exams.

Cost for Prelicensing A and Prelicensing B: $375 and 60 hours of classes

Next up, state and national exam. Basically just going through all the things that you just went over in the classes, but this time it counts.

Cost for State and National Exam: $43 and 4 hours (can complete in 2)

Passed! Next up is the course for new affiliate brokers. This is a take home test that goes through everything you learned but also has you complete a buyers contract from beginning to end.

Cost for Course for New Affiliate Brokers: $185 and about 20 hours (it should be closer to 30 hours per their calculations)

After getting that completed, most of the hard work to get the license is complete. From here on out, it is all about fees and getting everything in place for the commission to approve your application. Get all your paperwork from the exams, certificates and letters together and send it over to the real estate commission. Before you submit everything, get your fingerprints done and get Errors and Omissions Insurance

Cost for fingerprints: $43 and 30 minutes

Cost for Emissions and Omissions Insurance: $119 from February 2016 through the end of the year

Cost of Application: $110 + stamps — GET TRACKING AND MAKE COPIES!

I tell you to get tracking only because mine got “lost” in the mail but I was able to get in touch with the Real Estate Commission and it was “found”. Make copies of everything you have just in case it gets lost in the mail.

Once you get your license, you will need to figure out where you want to hang your license. You should talk to as many brokers as you can. They will basically be competing over you and it puts you in the driver seat. Ask the right questions. Ask the tough questions. Probe and try to find out fees as well as commission splits. You will be paying a lot of money to do this and you want to make sure you have the right team behind you.

Next up are the heavy hitting costs. These will differ with each state/agency but these are just my costs for Tennessee.

Cost for RealTracs: $120 per quarter

Cost for Sentri-Lock: $131 for the card (not sure if/when I need to renew this)

Cost for Realtor Association (proud member of GNAR): $681.75

Cost for Office: $220/month (this will vary per office)

Overall cost after it was all said and done was $2030.75. That is a pretty penny but after closing one deal, you should be able to make that up. The monthly cost for the office might be difficult to pay at first if you are not financially stable. From my experience, don’t go out with your buddies every weekend and you can make that money up pretty quick

I am just getting started but I am excited about the opportunities that lie ahead for me. The bottom line with this industry is that if you put in the time, you can make the money. I might not see results right off the bat, but its about the long game, not the short game (Thanks Gary Vaynerchuk for the quote).

NOTE: These are all the steps needed in the state of Tennessee. As I understand, this may be the same across other states but may and probably will vary. Please like/share/comment if you found value in this article.