Entering the real estate profession is like opening your own business. There are business expenses.
You should work with a competent tax adviser, as many of these start-up costs are tax-deductible.
In most cases, you will work as an independent contractor and work the hours you set for yourself, working as many or as few hours as you desire. Therefore, you must discipline yourself to get to work and accomplish the things you need to do each day to be successful, even if you’re working from your home office.
You can expect to minimally incur the following expenses:
Agent Pre-licensing School tuition, $509 (or sale price)
State licensing exam, $66
First two-year licensing fee, $154 (includes fingerprinting and background checks)
Most real estate agents want access to the Multiple Listing Service, which has an initial application fee and monthly fees which can be paid by credit card. Monthly fees can be as low as $38 per month, but can be higher, depending on which MLS Services you choose to join. If you live along the Wasatch Front, most agents join the Wasatch Front Multiple Listing Service.
In order to have access to these MLS services, licensees must join a firm that is a member of a local Board or Association of Realtors. The licensee must also join that membership organization, which requires the payment of annual membership fees.
Payment of Board or Association dues includes memberships in the Utah Association of Realtors and the National Association of Realtors as well.
Depending on which Board or Association you join in the state (usually the one within the area you live), those fees can range from $250 – $1,200+ per year and most have a first-time application fee as well.
Those fees are not paid until you’ve completed our course, passed your licensing exam and received your real estate license from the state of Utah.
You’ll need to take continuing education classes throughout your real estate career, usually at a rate of about $10 per credit hour.
Currently there are 18 hours required within a two-year period, so an agent could expect to pay $150 or more for ongoing education, although some firms, Boards, and/or Associations of Realtors offer free or reduced-cost continuing education for their agents.
Also plan for start-up costs, such as signs, business cards, etc.
Some brokers offset some of these costs outlined here, but a student should be prepared to spend $1,000 – $3,000 (including tuition, licensing fees, Board or Association fees, MLS fees, etc.) over the course of their first two years in the real estate business.
Luckily, that amount does not have to be paid in one lump sum.
And the good news is: the average real estate commission check exceeds $4,800, so one sale could cover your start-up expenses.
There are very few business ownership opportunities that offer such low start-up expenses and such a high rate of return on money invested. However, a candidate for a Utah real estate license should make certain they have the financial ability and/or backing to ensure a smooth transition into the real estate business.