An initial investment is always inevitable when starting a new career. Investment in a new career is necessary in nearly every industry.
So, it should come as no surprise that starting a career as a licensed real estate agent will involve some upfront costs to get you started.
When determining the cost of a real estate license in California, there are several factors to consider beyond the California Department of Real Estate (DRE) licensing fee, such as the cost of the state-run exam, required background checks, and the cost to enroll in state-accredited real estate school.
Considering these factors, the average cost of a real estate license in California is between $450 and $800, depending on the school and prelicensing course package you choose. It is also important to note that jumpstarting your career after getting your real estate license may require an additional investment, depending on your needs and goals. As your career progresses, you must pay to keep your license current and become a member of crucial real estate organizations.
Any investment you make now, however, pales in comparison to the potential return on your investment that a career in California real estate offers.
In this article, we deliver a comprehensive breakdown of the cost of becoming a licensed California real estate agent, maintaining your license, and remaining competitive in the current market.
Mandatory Costs Associated with Becoming a California Real Estate Agent
There are specific steps that everyone who wants to become a licensed California real estate agent must take, including:
- Enrolling in a DRE-approved real estate school.
- Complete 135 prelicensing course hours.
- Submitting a background check, exam, and licensing application.
- Passing the California real estate licensing exam.
Because these steps are mandatory, they ultimately make up the baseline cost of your CA real estate license. Some expenses, such as DRE fees, remain fixed. At the same time, the price of a real estate school and which California prelicensing course package you choose will vary.
Here’s a closer look at these mandatory costs:
Enrollment in a California DRE-Approved Real Estate Licensing Program
To be eligible to take the California real estate salesperson exam, applicants must first complete three DRE-approved college-level prelicensing courses, totaling 135 hours, broken down as follows:
- Real Estate Principles (45 hours)
- Real Estate Practice (45 hours)
- A DRE-approved real estate elective (45 hours)
The cost to enroll in an accredited prelicensing course program varies by school and, depending on the school you choose, can also vary by course structure.
For example, at License Solution, we offer three distinct course packages, all of which provide you with the DRE-required 135-course hours:
- The Bronze Package ($89) is our most basic package, designed for students who only need to complete the required real estate courses.
- The Silver Package ($129) includes the required courses, an audio version of all classes, and exam prep to enhance your educational experience.
- The Gold Package ($199) includes our popular video crash course, giving you the extra boost you need to pass the state exam on your first try.
Some online real estate schools can cost as much as $700! So, as you can see, your coursework will be the only variable in the mandatory costs associated with obtaining your real estate license.
California Real Estate Salesperson Exam Application Fee
The California DRE’s real estate salesperson exam fee is $60 and allows you to schedule your salesperson licensing exam. The fee covers the administrative costs of processing your exam application and delivering the test.
It’s important to note that this fee is per attempt. If you don’t pass the exam on your first try, you must re-register and pay another $60 to retake it.
License Solution’s state exam prep tools, offered through the school’s silver or gold course packages, provide students with a “pass guarantee.” Suppose students do not pass the state exam on their first attempt. In that case, License Solution will pay the state’s testing fee of $60 for each additional attempt until they pass.
Background Check Fee (Live Scan)
The California DRE uses Live Scan, a digital fingerprint service, to conduct background checks on all California real estate licensing applicants. Through the Live Scan service, the DRE electronically transmits an applicant’s digital fingerprint to the California Department of Justice (DOJ) to check against California and Federal criminal databases.
The $49 fee for the Live Scan is paid directly to the Live Scan service provider unless you are not a California resident. In that case, you will submit the $49 fee to the California DRE and the licensing application.
California Real Estate License Fee
The California Department of Real Estate (DRE) charges a $245 licensing fee to obtain a real estate license. This fee covers the processing and issuance of your official license, allowing you to practice real estate in California.
It’s important to note that the timing of this fee can vary depending on how you apply.
Suppose you have a sponsoring real estate broker already lined up. In that case, you can use a more streamlined process by submitting a Combined Exam/License Application. This application allows you to apply for the exam and your license simultaneously. However, with this option, the $245 licensing fee is typically due at the same time as the exam application fee.
If you still need to secure a sponsoring broker, you can submit a separate application for the exam first. In this case, you’ll only pay the $60 exam fee upfront. Once you pass the exam and have a sponsoring broker, you’ll submit a separate application for the license and pay the $245 fee.
What is the Average Cost of a California Real Estate License?
Based on the DRE’s mandatory educational requirements and fixed fees, anyone who wishes to become a licensed real estate agent in California can expect to pay at least $443.
The cost may go up from there, depending on the school you choose, the course packages they offer, and whether you must take the exam more than once.
Beyond Your Initial Investment: Maintaining Your California Real Estate License and Growing Your Career
While the costs of obtaining your real estate license are crucial, they are just the first step.
Building a successful and long-lasting career in California real estate requires ongoing investment in maintaining your license, professional development, and marketing efforts.
Here are some of the additional costs, some required and some optional, that you can expect to incur to stay competitive in the California real estate market:
Maintaining Your California Real Estate License
While it may not be top of mind when you’re just starting, it is essential to remember that maintaining your California real estate license will cost you money in the future.
A California real estate agent is required to renew their license every four years. To be eligible for renewal, the agent must:
- Complete continuing education courses.
- Pay a $245 license renewal fee.
Here’s a closer look at what those entail:
California Real Estate Continuing Education
When a California real estate agent renews their license for the first time, the DRE requires them to complete 45 hours of approved continuing education, including:
- a three-hour ethics course
- a three-hour agency course
- a three-hour course on trust fund handling
- a three-hour risk management course
- a three-hour fair housing course
- a two-hour implicit bias training course
- 18 hours of consumer protection courses
- 10 hours of additional consumer protection or consumer service courses
When renewing their license for the second time and all subsequent renewals, licensees whose license expires after January 1, 2023, or are renewing late, after that same date, must complete 45 hours of approved continuing education, consisting of:
- A nine-hour survey course covering ethics, agency, trust fund handling, risk management, management and supervision, fair housing, and implicit bias training (agents can also choose to take individual courses on each of those seven subjects).
- 18 hours of consumer protection courses
- All remaining hours from either consumer protection or consumer service courses
Like the cost of California prelicensing education, the cost of continuing education courses varies by real estate school. Still, the average tuition cost is around $50.
California Real Estate Re-Licensing Fee
The DRE charges a $245 re-licensing fee to renew your real estate license every four years. This fee covers the administrative costs of processing your renewal application and maintaining your license on the official DRE database.
It is important to note that if you let your license lapse, the renewal fee increases to $367 if you apply for a renewal within two years of expiration.
The Costs Associated with Building a Successful Career in California Real Estate
Beyond the regulatory fees that California real estate agents must pay throughout their careers, there are other costs to consider. Although some of these costs may be optional, like the initial investment you made to begin this journey, the rate of return can be significant when you consider how each contributes to your overall success.
Here are some costs moving forward:
Brokerage Fees
Licensed California real estate agents are required to work under a licensed broker. Brokers charge real estate agents a fee each time they make a commission from a sale.
The split for new agents is typically 50/50. However, as you establish yourself in the industry and become a more seasoned agent, you can command a 70/30 or even an 80/20 split.
Multiple Listing Service Fees
No tool is more critical to a real estate agent’s success than the Multiple Listing Service (MLS). This comprehensive database is the premier platform for real estate listings nationwide. Real estate agents gain access to the MLS through their affiliated real estate brokerages, which typically hold memberships in local Realtor® associations or MLS boards.
While MLS fees are not a direct expense for most agents, it’s essential to understand how they might impact you. Brokerages typically cover the base MLS membership fee, which may be included in their agent fees or dues. However, additional fees could be charged for features like data downloads or enhanced listing exposure. Be sure to discuss these potential costs with your chosen brokerage.
California Association of Realtors® Fees
The California Association of Realtors® (CAR) is a non-profit professional association that provides programs and services to enhance members’ business skills and uphold ethical standards in the real estate industry. Being a CAR member can offer benefits like educational resources, legal resources, and networking opportunities.
To be eligible for CAR membership, you must work under a real estate broker who is a National Association of Realtors® (NAR) member. Annual dues associated with CAR membership typically fall around $184, but the amount may vary slightly depending on your local association.
National Association of Realtors® Fees
The National Association of Realtors® (NAR) is a trade association that represents real estate agents across the United States. NAR membership offers benefits like access to continuing education opportunities, professional development resources, and discounts on various products and services.
To be eligible for NAR membership, you must first join your state or local association of realtors®. The annual dues fee is currently $150. However, NAR dues can change yearly, so checking their website for the latest fee information is wise.
The Cost of a California Real Estate License: Is It Worth It?
If you’re wondering whether the cost of a California Real Estate license is worth it, the answer is a resounding yes, considering the average annual salary of a California Real Estate agent is $109,714. Couple that with having the luxury of working flexible hours and helping others achieve their dream of buying or selling property, and any costs associated with obtaining and maintaining your California real estate license are a small price to pay.
It takes little time to get back the money you invested in your career. Once the money starts rolling in from this potentially lucrative path, you’ll be happy you chose to become a California real estate agent.
Are you ready to start your journey?
