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Your Initial Real Estate Agent Expenses During COVID-19
November 17, 2020

Your Initial Real Estate Agent Expenses During COVID-19

by The CE Shop Team

Start Your Career Off on the Right Foot by Knowing What Expenses You Will Incur

Once you become a real estate agent, you’ll begin a flexible career with a near-limitless salary ceiling. There’s a reason why working real estate agents report their average salary to be $82,000; the work agents put in indirectly translates to the money they make.

While the financial consideration makes pursuing this career worthwhile, you also need to consider other factors when making a career change, like the expenses you’ll incur. And even more importantly, you’ll want to think through how COVID-19 affects these expenses.

What Expenses Should Real Estate Agents Expect


Before you become a real estate agent, you’ll need to complete your Pre-Licensing courses and pass the state and national portions of your licensing exam. Each state requires a different set of hours and requirements. For example, the state of Florida only requires 63 hours of course time while the state of Colorado requires 168 hours. Please visit your state’s commission website or visit your state’s Pre-Licensing page to learn about the costs of becoming a real estate agent.

With the second wave of COVID-19 overtaking the country, you’ll have a big decision when it comes to your real estate education: Learn online or visit a brick-and-mortar classroom. The costs of enrolling for classroom learning could not only threaten your health but also put a damper on your wallet. Expenses for in-person learning include:

  • Money for gas or public transportation for commuting to class
  • Missed life and work events because of rigid scheduling
  • Time lost due to travel and long class times
  • Textbooks and other class materials

Fortunately, you already have everything you need to take online real estate courses: A device that can access the internet and working WiFi. Learning online also offers increased flexibility and convenience. You control the pace of learning and when you log on. You won’t have to miss work or life events simply because the brick-and-mortar classroom requires you to be present several times a week. When you throw COVID-19 into the mix, it becomes pretty clear that the most financially prudent and safest option is online learning.

Cost of Online Education: $77-$999 (state dependant)

Cost of Classroom Education: $500-1,500 + Other Expenses

All claims are a result of an industry-wide audit done by our in-house team. If we missed something or have provided incorrect information, please let us know at

Licensing Exam

The cost of your licensing exam will depend on the state in which you live. You’ll need to schedule, register, and pay for the licensing exam when you almost or have completed your Pre-Licensing courses and any course exam. There are two sections on the exam: State and national. Each exam is scored separately. You must pass both sections in order to pass the section. If you do fail, don’t fear. You can retake the exam in accordance with your state’s waiting time and deadlines.

If you’d prefer to pass your licensing exam the first time around, you should also consider purchasing an Exam Prep product. Many online education providers include one in their Pre-Licensing packages, and the product generally costs under $90 by itself. Once you pass your exam, you must submit your application, required documents, and fees to your state’s real estate agency. After submitting, you should receive state approval in the form of a real estate license certificate.

Cost of Exam: $200-$300 + Fees (state dependant)

Become a REALTOR®

A REALTOR® is a real estate agent who is a member of the largest trade association in the U.S., the National Association of REALTORS® (NAR). When you become a REALTOR®, you’ll gain access to resources like business tools, market data, and even lobbying efforts from local NAR groups. When COVID-19 consumed the country in March, it was NAR’s local groups that pushed for real estate agent services to be considered “Essential.” Becoming a REALTOR® also gives you credibility as a professional who knows what they are doing.

Initial Cost of Becoming a REALTOR®: $150

Brokerage Firm

Real estate agents usually work under a state-licensed brokerage that oversees your real estate transactions and monitors that you are upholding your legal and ethical duty. Although you may have “desk fees” and other office costs like website management, business cards, and marketing materials assessed by the brokerage, there technically is no cost to joining a brokerage. The expenses incurred depend on the agreement between you and the brokerage, which could include a flat-rate monthly fee. However, just because there are no “membership” costs to you doesn’t mean the brokerage will not make money off of your transactions.

One of the factors to consider when determining your potential for earnings is the commission split with your brokerage. Let's look at an example of how much a listing agent earns if the commission paid is 6% with a 50% split with the brokerage who produces the buyer. Say you sold the average media value of a home at $320,000. The total commission at 6% would be $19,200, of which $9,600 is retained by the listing brokerage. As the listing agent, you would be paid on a split, which is around 60% on average for a first-year agent. This means that you would gross $5,760 before any other operational and marketing costs associated with the brokerage.

Commissions are typically paid by the property sellers and are negotiable by law. Some listing agents get 2.5-3% of the contract purchase price and offer out the same to buyers’ agents. However, this number can vary.

Initial Cost of Joining a Brokerage: $3,840/Home Transaction + Brokerage Desk & Marketing Fees

Errors & Omissions Insurance

This type of insurance protects you from professional liability while working as a real estate agent. It is absolutely necessary for you to obtain and maintain this insurance. If your errors and omissions insurance lapses, you could face a license suspension or, worse, full liability in case something bad were to actually happen in a transaction. There is also a common misconception that brokerages have insurance that covers you, but that is not the case. Your brokerage acts less like an employer and more like a contractor as it pertains to your agent-broker work relationship. They do not have insurance that covers you as a real estate agent, so it will be your responsibility to ensure that you’re protected.

Initial Cost of E&O Insurance: $750

Are There Other Expenses to Consider as a New Agent?

Absolutely. You’ll need to figure out your advertising and marketing budget ($1,000+), operational costs ($6,000+), transportation ($1,400+) and career development costs ($500+). Although COVID-19 has changed the way real estate agents work, these costs should remain relatively similar year over year. You can learn more about these costs by visiting one of our most popular blogs, Your Top Expenses as a Real Estate Agent.

Ready to Get Started With The CE Shop?

Whether you’re a new agent looking to start award-winning Pre-Licensing education or an experienced veteran wanting to finish your Continuing Education, we’ve got a 100% online curriculum that’s one of the most diverse and groundbreaking in the industry. And if you want to network with your peers, join our Facebook group and get connected!