Are you thinking about getting into real estate? There are many ways to get started as a real estate agent. If you want to get into real estate, here is what you need to know.

How to get a real estate license

The process to get a real estate license is specific to each state. To get a real estate license, you must take pre-licensing classes. State real estate commissions require certain pre-licensing classes.

Real estate licensing classes are 40 to 99 classroom hours, depending on state. Pre-licensing classes are online in 30 US states. View the list of states that allow you to get your real estate license online. Taking classes online allows for convenience and flexibility. 

When your pre-licensing classes are complete, you must pass an exam, pass a background check, and get a fingerprint clearance card. You can find specific details for obtaining a real estate license in your state here.

New real estate agents may want to do open houses

The cost of getting a real estate license

The cost to get your real estate license varies by state. Costs to get a real estate license include:

  • Pre-licensing classes ($150-$500)
  • Background check 
  • Fingerprint clearance card ($50-$100)
  • Exam fee ($75-$150)
  • Licensing fee

Once you have your license, there are more costs. A real estate brokerage must sponsor you to activate your real estate license. Real estate brokerages often charge monthly fees in addition to your license fees. Many real estate brokerages require you to be a member of the National Association of REALTORS® and the Multiple Listing Service (MLS). If you are going to show homes, you will also need to pay for a key to open real estate lockboxes. If you are going to list homes for sale, you will need to buy lockboxes and marketing materials.

Most active real estate agents pay for:

  • Continuing education classes
  • REALTOR® dues
  • MLS fees
  • Lockbox key & lockboxes
  • For sale & open house signs
  • Software, website & other technology

Estimated cost for obtaining a real estate license: $500-$800
Estimated additional cost to activate your license: $700-$1000 *
Total cost for first year real estate agents: $1,200-$1,800

*Note: You can have an active real estate license and earn commission without paying these fees by joining a referral brokerage.

Ways to use your real estate license

Help people buy and sell homes on commission

A family enjoying their new home that a real estate agent helped them buy.

Most real estate agents work on commission. A real estate agent earns a commission by helping others buy and sell homes. This is considered “traditional real estate”. Real estate agents who sell homes on commission prospect for new clients, market themselves, show homes, pay for photos of homes, and – in many states – negotiate contracts.

Within the traditional real estate market, there are other specialties. Some agents specialize in working with first-time homebuyers. Other agents focus on investors and fix-and-flips. Finding a small geographic area, or specializing in a certain type of client, is a good idea for new real estate agents.

Most traditional real estate agents are 1099 Independent Contractors, not employees. 1099 agents are responsible for all the costs of running a real estate business. This includes office space, software, and marketing.

Work as an employee on salary

Real estate groups hire people with a real estate license as employees. Licensed employees handle specific tasks to support the agent(s). There are roles where you earn a salary with a real estate license. They include:

  • Licensed assistant
  • Showing agent
  • Transaction coordinator
  • Client care specialist
  • Marketing coordinator

Some real estate companies only hire salaried agents (instead of paying commission), such as RedFin or property management companies. Property managers help homeowners and investors rent their homes. Duties of a property manager include marketing the rental, collecting rent payments, and coordinating repairs.

To get a real estate job with a salary, apply directly with the company. Real estate companies post job openings on sites such as Indeed and ZipRecruiter. Always read the fine print on real estate job postings to ensure it is a salary position. 

Earn passive income with your real estate license

Many people become real estate agents for flexibility and part-time work. The truth is, it is very time-intensive to be a real estate agent. Agents show dozens of properties before a buyer decides to make an offer. Then, there are negotiations and paperwork to manage. 

real estate referral agent with her dog

Real estate referral agents earn passive income with their real estate license. Referral agents are not involved with the home buying transaction. A referral agent connects a home buyer or seller with an experienced, full-time agent, who then pays a referral fee or “finder’s fee”. On average, the referral fee is 20-30% of the real estate agent’s commission. You must have an active real estate license to receive a referral fee from a real estate agent.

Roosted is a new referral brokerage offering an industry-leading 35% referral fee. Roosted agents do not do transactions, and do not have to pay REALTOR® dues or MLS fees. In fact, most Roosted agents are able to keep their real estate license active for free.

How much do real estate agents make?

Most real estate agents work on commission. Commission means an agent is paid after making a successful sale. In real estate, you receive a commission after closing. If the home sale doesn’t close, the agent does not earn a commission. 

What a real estate agent makes depends on how many homes they sell. The average agent earns $41,800 per year. Real estate agents with 2 years or less experience earn an average of $9,300 per year.

National Association of REALTORS®

It is important to remember that real estate agents are business owners. They are responsible for all costs associated with running their business. This includes:

  • Transportation (lease payment, gas, insurance)
  • Marketing (business cards, advertisements)
  • Website hosting and other software
  • For Sale and Open House signs
  • Errors & Ommissions Insurance (sometimes supplemented by the brokerage)
  • Dues and fees

According to the 2019 NAR Member Profile, real estate agents spend an average of $4,600 per year on business expenses. For agents with less than 2 years experience, this results in a net income of less than $5,000 per year.

Tips to get started as a real estate agent

You have your real estate license and are ready to quit your job and start making money! But first, make sure you have accurate expectations. If you are beginning a career in real estate, have at least 6 months of expenses saved. This includes mortgage/rent, utilities, auto/gas, childcare, food, and all other monthly expenses to run your household. Most new agents close less than 3 deals in their first year.

According to the National Association of REALTORS®, real estate agents can expect to make an average of $9,300 in their first year.

To get started as a real estate agent, consider starting at a referral brokerage such as Roosted. This allows you to start marketing yourself as a real estate agent without paying high fees. Once you have built a pipeline of business, you can become a full-time real estate agent. 

Ready to get started as a real estate agent? Click here to get your real estate license online.

Already have a real estate license? Click here to learn more about Roosted, the real estate referral brokerage.


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