Real Estate Agent Expenses

A career in real estate can be both challenging and rewarding. Real estate agents are self-employed, and they will incur numerous expenses in the normal course of business. The process of obtaining a real estate license takes time and money.

Costs To Become A Licensed Agent

All states require that s number of hours of coursework be completed to obtain a sales agent license. A licensee pays the upfront costs associated with the classes and testing. Once you have successfully completed this pre-licensing step, some real estate boards charge an administrative fee when your license is transferred to the real estate company you have chosen to work with.

Memberships, Dues, And Business Insurance

Every year, a real estate agent is required to pay licensing fees. There is an annual fee that is collected by the local board of realtors to keep your license active and in good standing. If your area of the country has a multiple listing service (MLS), the agent is responsible for the yearly fee associated with membership. The MLS fee does not include the cost for the key pad or e-key. This is the way an agent can physically access the properties that are listed in the MLS service. That fee can usually be paid either monthly or yearly.

Your agency will require that you obtain and maintain business insurance usually in the form of errors and omissions insurance for real estate agents. The premium payment is the responsibility of the agent.

Business Expenses

Real estate agents pay all of their own business expenses as an independent contractor. This includes any basic office supplies that are needed. A sales agent will need reliable equipment such as a laptop computer, tablet, and a smartphone. Much of an agent’s time is spent out of the office on showings, property tours, and listing appointments. They pay for their own driving and related transportation costs.

Marketing expenses should also be factored in as an ongoing business expense. There are many marketing platforms that will help a realtor attract buyers and sellers and, while some of them are free, many charge the user a monthly fee.

An agent will need business cards and other marketing materials. You can save money by creating some of your own material on your computer, but you should do so only if you can design and create high quality, professional looking results. Otherwise, it will pay off in the long run to pay a professional designing and printing company to do it for you. A real estate agent is expected to pay for their own mailings, postage, postcards, brochures, and flyers.

There are a number of popular real estate sites on which a real estate agent can advertise and market themselves and their listings. Most sites will charge a monthly fee to the agent for their services. An agent will be well served to invest in a good digital camera for posting photos online.

The real estate industry requires that a licensed agent fulfill a certain amount of credits for continuing education. The cost for these classes are assumed by the agent. There are also other variable expenses to be considered, such as desk fees and commission splits. These are two examples of the types of expenses that may be charged by your real estate agency. The broker-owner should explain what expenses you should expect to pay as a sales agent for the company.