The Cost of Becoming a Real Estate Agent
For many, the opportunity of a career in real estate is very exciting. High value transactions, the chance to help people find their dream home, it can be a very rewarding and a very lucrative career. However, the cost of entry can be a little high. So let's look at what is required to get started as a real estate agent.
The first step is to get licensed. In order to get your real estate license in Utah, you need to take the required education and pass the state licensing exam before you can apply for your license.
The Utah Division of Real Estate requires all applicants complete a 120 hour course that covers the principles and practices of real estate. You can take that course live, or online, or a combination of both. In Utah, the cost of the Real Estate Prelicense course is anywhere between $400 and $600. A higher price doesn't always indicate a better product, so read the details before you choose a school.
After you complete the required education, you need to pass the Utah license exam. It is offered through PearsonVUE test centers, and currently costs $66. If you don't pass, there is no limit to how many times you can retake the exam. Sometimes the schedule fills up, so make an appointment soon after you complete your education.
After you pass the licensing exam, your application for your Utah real estate license costs $152. You have up to one year from the date you complete your education in order to get your real estate license, and that includes passing the exam and your license application.
Once you have your real estate license, the real dollar costs continue. As a real estate agent, you are essentially starting your own business. Your office location is your choice but your product is you. Your clients will rely on your knowledge of real estate law and your negotiation skills. Another asset is your access to real estate listings and market data. To get access to the most data, you will want to obtain membership in a real estate association and Multiple Listing Service.
Membership in a real estate association offers many benefits, and anyone planning to represent residential buyers and sellers will want to join. Membership dues in Utah are usually paid annually, and range from $700 to $1300 each year. If your broker is a member of an association, then you will be required to be a member of the same association.
The Multiple Listing Service is also a great resource for agents, providing you up-to-date listings, sales history, comparables, and more. Access to the Multiple Listing Service in Utah is usually paid monthly, but is around $600 a year.
Next you have the physical costs: wardrobe, business cards, yard signs, travel expenses as you drive to showings and listing appointments, electronics such as a good laptop, smartphone to work emails, set reminders, etc. Many brokers offer office space, and sometimes assistance with business cards, fliers, and other basic office tools, but most of your arsenal will be your own expense as you put together the things you need to best serve your clients.
Remember also that as an independent contractor, your taxes are your own responsibility. If you come from the world where your federal and state taxes are automatically deducted from your paycheck, it may come as a surprise at the end of your first year to find that you owe all those taxes for the year previous. A smart real estate agent is savvy at business, and they account for these eventual expenses throughout the year, so they aren't surprised by a large amount due at year end.
Finally, you will always be on the lookout for training opportunities. Sales training, negotiation, presentation, customer service, there are many facets of the real estate business that you will want to stay informed on. Most brokers offer training to agents, but you should also look for training opportunities outside your brokerage from the real estate associations, and other industry experts. You will want to read the latest market trends, and stay on top of the financial projections that could affect you and your buyers and sellers.
A career in real estate is full of possibilities. Even if these costs look daunting, remember that there are thousands of successful agents in Utah. One or two deals closed can pay for all of these expenses, leaving you free to earn your full commissions throughout the year. Even in down markets, people still need a place to live, and a smart real estate agent can offer a great service. In the end, real estate is all about people. Good real estate agents are good people. If you treat people right, you can succeed.