Congratulations on making the decision to become a real estate agent. It is an exciting career path and one filled with many rewards, both tangible and intangible. However, as with any new business, there are startup costs involved in becoming a real estate agent. You’ll need to factor these costs into your timeline when transitioning from a job to being a self-employed entrepreneur.
5 Costs to Consider When Starting a Real Estate Career
In Florida, the Florida Real Estate Commission (FREC) requires that all new applicants complete 63-hour of pre-license education. You’ll need to make sure that the school that you select is licensed by the Division of Business and Professional Regulation (DBPR) to offer this course, known as FREC Course I. Different schools offer the exact same course for various prices to make your decision based on the school that you think will prepare you to pass the exam best.
You will need to complete your real estate license application with the DBPR. Currently, the application fee is $83.75 and can be completed online at the DBPR’s website, myfloridalicense.com. In addition to the application, you will need to have your fingerprints scanned by an authorized vendor of the DBPR so that the FBI and FDLE background check can be completed. Many schools have DBPR approved vendors who will come to the school during class so that you can have your fingerprints done in-class.
Brokerage compensation plans come in all shapes and sizes from a 50/50 split to 100% commission brokerages. Most brokerages also charge some sort of a month fee ranging from $50 to over $450 a month. Usually the higher the broker’s split, the lower the monthly set fees are. When interviewing brokerages, be sure to get a list of all fees that you will be responsible for paying in writing.
The vast majority of brokers belong to the National Association of REALTORS® and by rule, if the broker is a member, all agents working at the brokerage must also be members. Joining your local brokerage means you’ll need to join the local REALTOR® board, the state board, and also the national board. In addition, you’ll need to join the local MLS and obtain a smart key to unlock lockboxes on listings. In all, you’ll spend up to $1,500 to join the various boards that you’ll be required to. The actual number will vary depending on the time of year you join as membership dues are typically prorated to the annual renewal date.
You’ve done it. You passed your pre-license class test, the state test, found a broker, and you’ve joined the National Association of REALTORS®. Whew! You’re finally ready to start closing deals and cashing commission checks! Whoa, not so fast. Who knows about you? Like any new business owner, you’ll need to develop a marketing plan and start marketing your business. According to NAR, on average 31% of REALTORS® spend in excess of $1,000 per year on marketing. Top producers spend more than that per month! You should have some money set aside to begin marketing your new business and obtain your first customers. Once you have your first closing, it is important to set aside 20% of your commission to put towards future marketing efforts.
OneBlue Real Estate School is Orlando’s premier real estate education provider offering small class sizes and a fun, interactive environment. We offer a wide variety of classes from pre and post-license classes, new real estate agent boot camps, and continuing education classes. With online classes and instructor-led classes, we have something for everyone! We’d be honored to assist you as you embark on your new journey to become a real estate agent!