So Everyone is asking me, “What does it cost to get into Real Estate?”
They want to know if it’s truly as expensive as everyone says it is. Let me tell you a few things first:
1. Do your RESEARCH. A great agency will cover certain costs and include them in ONE general fee so you are not paying for two million different things right out the gate. A great sponsor/team lead will give you smart advice and help you decide which marketing aides or various tools are absolutely necessary when starting out and which are not. Research different companies and who you will be working with to make sure what they offer/what you will be paying for and that you trust them to give you the best advice for you personally.
2. BUDGET! Before you start signing papers and jumping in head first make sure you have a budget set and stick to it! Know exactly how much you can spend on training/classes. Know exactly how much you want to spend on marketing materials and membership fees. Make sure to plan for unexpected costs and ‘surprises’ as well. Talk to other agents to create this budget. Plan for success and know how you will spend/save/invest your commission earnings each time you close. Know what your marketing plan will be and how much you will spend providing services for each customer (Post will be coming soon on this).
3. READY SET GO! Don’t be afraid to trust your plan. If you did your research and you have a clear and comprehensive budget plan there should be no reason for you to not succeed. You’ve got this!!
Getting Started In Real Estate:
Education: First things first. Do you already have your classes completed? If not, do you have a school picked out? Here are some links and prices to some schools that offer real estate education services. I used Kaplan and was very happy with their program and its options. Think about what will work for you. Are you still working full time? How soon do you want to be completed with the program? Make sure if you can work at your own pace (maybe finish early) or if you have a set schedule. Look at all their options they provide and pick one that is best for you.
These Schools will sometimes offer online and live in person classes. Daytime and Evening live class options to fit your schedule. Online Self study options with ebooks or printed materials options are important to look at. Monthly payment options are available sometimes also. Exam Prep is also available with some schools and very important if you want to do well on the exams the first time around! Some schools offer guarantees or exam reimbursements. Some offer online interactive study groups as well as study guides to use on your own. Many programs offer add on packages for extra math study courses or real estate terminology that can be added to your program. (Click the name of the school for a link to their website)
- Kaplan Price Range $599-$1200
- Real Estate College of Colorado Price Range: $395-$1000
- Colorado Real Estate School Price Range: $399-$600
- Real Estate Express Price Range: $240- $370
EXAM: Once you have completed the required credit hours for Colorado (168) You can look into scheduling your Exam. I took my exam through PSI Exams and it only cost me $45. However some exams centers can charge upwards to $75.
Fingerprints: You will need to submit your fingerprints as part of the process once you have taken and passed your exam. Your School will typically give you directions on where to go, who to schedule it with and how much it costs. It can cost anywhere from $40 to $100. You can get your fingerprints prior to completing your program and it is actually recommended so the government has time to process them. This DOES need to be done prior to applying for your Real Estate License.
Licensing Fees: Once you have passed your exam, it’s time to apply for your Real Estate License. This will cost anywhere from $325 to $500.
Office/Brokerage Fees: So this falls in line with your research. Look around, interview them and find out what they charge. Is it a yearly fee that includes many of the little things you would pay for like a CRM, copying and office supplies, desk/office space, training so on and so forth. Some offices will charge you monthly and some will charge you yearly. This one really depends on each Brokerage you contact. Some could simply charge $30/ month for you to use their mailing address, others $400 or more. Some charge a percentage fee for each transaction. Depending on your financial situation coming into this, you may be able to afford an office that charges a flat rate for the year and provides many of the individual services for you. Also take into consideration what each office offers as their commission split and any sponsorship/residual plans… this will make a big difference in what you can sometimes afford or if it’s worth it paying additional fees at that particular office.
CRM: You will need a place to store your database and track your communication. There are MANY CRM programs out there that you can pay for monthly. Some offices will provide this for you as part of your fee so again, do your research. Even if your office provides one you do not have to use it. These range from $25/month and higher. Look at what the program offers you and all it’s options. Some will help manage a to do list and has a call center for you that will make a follow up call for you and connect to your phone.
MLS: Here in Colorado we have many MLS systems. You can pay for Pueblo, Pikes Peak, Denver and so on. I pay about $30/month for Pikes Peak MLS. You can choose to pay for all or just some of them. That is completely up to you….
REALTOR® Membership: So again, this will vary on where you are and which memberships you actually want to be a part of. Your agency you choose may require one or all as well, so make sure you ask! I joined PPAR (Pikes Peak Association of Realtors) Which also included membership to NAR (National Association of Realtors) and CAR (Colorado Association of Realtors) THIS will be a pretty large chunk of money depending on the time of year. If you are unlucky like I was you’ll be paying around $900 when you sign up. Typically though, member ship is about $600 You will then sign up for a new member orientation and take an ethics class, take an oath and be sworn in as a member and wa-la! You can now call yourself a
Training/Classes: Some agencies, in fact many, will offer training and classes to help you learn and be a more efficient agent. However, not many offer that training for free. Ask around and find out what classes/training they provide. SOME classes like the Annual Commission Update Course or the Contracts Class are state mandated and will cost money. In order to renew your license you will need to take Classes to earn CE (Continuing Education) Credits and these will generally cost around $25 – $60 . They are offered just about anywhere; title companies, other agencies and brokerages, PPAR and various real estate memberships…. There’s also some great training programs out there! Some again, will be provided by your office but will still require $$$. Typically these will cost anywhere from $65 to $450. Sometimes its one class, sometimes its a 6 session class. Ask around with other agents and see which training programs they have used/liked before signing up and paying money to any of them though. Trust your peers and their reviews!
Insurance: Some agencies will have a large policy for their agents and will tell you what your portion of that cost will be. It can range from $250 to up around $500. You can also shop around and find your own E&O Insurance and the price will vary. Also make sure you check with your auto insurance policy and let them know you are now a Real Estate Agent and would they recommend adjusting your auto policy at all.
Supplies/Materials: Should you pay for all your printing and folders and buyers packets and business cards??? Well, if you find a really great agency they will pay for all of it!!!! Some will limit your printing, but most will offer your first set of business cards for free. If your office offers it, use it! Printing and materials like this can wrack up your costs very quickly!
Marketing: Are you going to pay for leads through zillow or other real estate sites? Will your agency provide lead generation for you? Again, these are things you need to ask because this can get quite pricey!! Some marketing programs are as low as $50/month while others are up in the thousands. Some agencies will provide leads and negotiate your commission split for those leads. It comes down to what can you afford, and how would you like to work. Do you want to find the leads yourself, would you like to pay for leads being sent to you? If so ask your agency what they offer or look around at programs you can pay for yourself. Many times these programs charge you an arm and a leg but do not send the promised amount of leads. Most agents in the business will tell you its not worth the $$, so please please please, do your research before sending over your credit card info!
Extra Costs: So a big part of Real Estate is relationships. So please keep in mind much of your calendar should be filled with social engagements. Lunches, coffee dates, evenings out, gas, gifts…. If you do not stick to your budget these extra costs will suddenly be very overwhelming. Know what you are willing to spend. Take note that there are so many things that can be written off on your taxes as well, so before you settle on your budget check with your tax adviser to make sure you understand how your write offs will work as a Real Estate Agent.
As you are looking over all these costs and expenses, take into account what your commission would be from the sale of ONE $250,000 home a month…. just one! IF you budget yourself right and work consistently to achieve one closing per month you will be in the GREEN each month…. Start with your sales goal and work from there. What do you want to/ need to earn each month, or for the year??? So then if you need to earn $90k a year and you have your Real Estate spending budget written up you will know exactly what you need your commission and sales to be. Take that information with you when shopping around for agencies and you are golden! Good Luck, See you out there!!