Becoming a Real Estate Agent: The Process Revealed

So you want to become a Real Estate Agent?

What draws you to the career? Is it the limitless income? The business meetings that happen over cocktails?

It’s not as easy as you think. And you have to be willing to put down a whole lot of your own money to get started. Before you decide on getting started in the industry, I’m going to lay out all of the steps it took for me to become a Realtor® with absolute transparency.

* Note that you must be over 18 to apply, have not had a past license revoked, and must pass a background test. I am licensed in Iowa and am explaining our process.

1. Take the 60-Hour Pre-Licensing course

This is by far the biggest time commitment and is usually the first step. The course will cover all of the required aspects of the real estate industry and is meant to prepare you for the licensure test.

It is VERY BORING but you can’t avoid it. You don’t necessarily need to know it backwards and forwards to thrive in the Real Estate industry, however you need it to pass the test. I took the course in one weekend, most people complete it over 6 months.

COST = $425

2. Complete a background check

You must request a fingerprint packet and an application from your state’s association. Head on down to your local police department and have them take your finger prints! This costs $10. You cannot do this yourself.

This process takes up to 10 weeks, so jump on this ASAP. There is a fee ($51) associated with sending this into the state association and for them to screen you.

COST = $61

3. Take the National and State license exams

Study up because this is TOUGH. You must pass both your state and national exam, a combined 180 minutes of exam time. They ask a combination of all of the aspects you learn about in the 60-hour course.

Although I passed the national exam, I failed the state portion and had to pay to retake the entire thing. It’s best to study hard and pass on the first try.

COST = $95 (plus another $95 every time you retake it)

4. Complete additional state mandated courses

In Iowa, we’re required to take 3 additional courses that are each 12 hours long. Sadly, this consumed my Friday night and your entire Saturday (3 times).

My courses were Buying Practices, Listing Practices, and Developing Professionalism and Ethical Practices. These courses, I believe, are more helpful for the real world and will teach you things that apply to real life situations. Think along the lines of how to price a house or how to write a Purchase Agreement. Each course cost me $140.

COST = $420

5. Purchase Error and Omissions Insurance

This is required before submitting the application. I went through RISC and the insurance will protect you from any potential defense costs or damages if you are sued in that year.

COST = $153

6. Apply for the license

So you passed your exams and completed the required courses. Yay!

You will submit the proof of passing the exam and your courses and proof of insurance to your state’s Real Estate Commission. The fee I paid was $125. It took about a month to process my application before I received my license.

COST = $125

7. Join the National Association of Realtors®

Once you receive your license number, you must be represented by a brokerage where you may hang your license. To begin using your area’s MLS you must sign up to be a Realtor®, which is entirely different than just being a Real Estate Agent.

A Realtor® subscribes to a particular code of ethics and must be signed up through the National Association. Annual dues are $120 but there are some resources included with membership.

COST = $120 

8. Join your local Association and get on the MLS

Initially joining cost me a pretty penny. I believe it was somewhere in the neighborhood of $1200 just to begin and pay an up front fee. This allows you to post your listings for all other Association Realtors® to see, use ShowingTime (super helpful application to show houses), browse listings, and more.

Annual dues to my local Association are $1266. We pay them quarterly so it’s nice that they are a little more spread out. Being a part of a local Association also connects you to other Realtors® through classes and events.

COST = $2466

TOTAL COST = $3,865


As you can see, just becoming a Realtor® comes with a hefty price tag, and many of these costs reoccur annually (dues, E&O insurance, continuing education…). The job may seem easy and glamorous, but it is a long and expensive road to even start. I hope this explains the process and answers and sheds more light on becoming a Realtor®. Best of luck!

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