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Janel, Home Buyer in Honolulu, HI

What is the cost of becoming an agent? I'm just beginning to look in to the process of getting an agent's

Asked by Janel, Honolulu, HI Sat Feb 21, 2009

license. But after I complete the education, what other fees can I expect to pay in order to get started? The school I'm looking into says it'll cost about $400 for exam and licencing fees on top of course fees, but others have told me much higher costs to become active. Just wondering about how much of my savings I will have to dip into. Your input is much appreciated.

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The cost of becoming an agent is between $500.00 and $1,000.00 for school. Your books are an additional $150.00. I am a Broker in Colorado. I'm sure the prices vary for every area. But, before you go into real estate, realize it costs "you" very much money to practice real estate. It's certainly a rewarding career, but very expensive. Most people don't understand that YOU pay for all your advertising, which is very expensive. As a new agent, you will depend on friends, family and good fortune to have any business. Have some money in savings to get you through those lean times!
0 votes Thank Flag Link Thu Feb 26, 2009
I do not know what the board in HI will charge for their annual fee and quarterly dues. Here in CA --I pay 435 annually and another $145 a quarter for supra key. Then biz cards, smartphone, paper and ink.
After that I pay for E & O insurance directly out of each check $77 per transaction. We have no desk fees or transaction coordinator fees or marketing fee and we get a min of 70%.commission split. I work out of the home and it keeps costs down and makes the career affordable given the times. Remember to to keep all receipts and be diligent about logging all your biz mileage in a log. Donna L Meyers Connect Realty
PS I wish I were in HI with you!
0 votes Thank Flag Link Thu Feb 26, 2009
Thanks everyone for the useful advice!
0 votes Thank Flag Link Sun Feb 22, 2009
Hi Janel,
The cost of being an agent is ongoing as it really comes down to running your own business with all business associated monthly expenses. The main financial concern is you have to pay those business expenses from your own account/pocket. The sooner you start closing deals in your career and the better chance you have to stay in business.
As you are starting you might have extra expenses than just those monthly business expenses (one time front fees for various services/memberships, home office supply and hardware, For sale signs and riders, business cards, stationeries, Supra, etc…).
Monthly cost is really dependant of your savings and how serious you want to invest in your new career. Personally, I generate between $1k and $2k in monthly operating expenses (not including my salary).

Cathy C.
0 votes Thank Flag Link Sun Feb 22, 2009
Let's assume you already have a good laptop, so you won't have to buy one. Generally you will have to belong to the National Assn of Realtors and their local (Island) and state divisions - The cost is about $650 per year (there may also be a one time registration fee around $200). You will want to have good Errors and Ommisions insurance (Brokers have wide varities of ways to cover this) Generally this is about $30 / month. Next, you will have to join your local MLS (about $650 plus an initial setup fee). FInally, you should budget in your costs of marketing, business cards, etc. Don't forget to factor in the costs of education, both in time and in money. I advise my prospective agents to have about 6 months of living expenses available (a regular sale often takes between 60 to 90 days to close -- If it is a short sale or a "distrssed property" under Act 137, it may take 6 months or longer to get all the principal parties to sign off).
Your first year will be quite intense from taking classes and learning about the "how to" parts of real estate sales to developing your marketing and sales strategy.
In short, you will be looking at about $2,000 to $3,000 plus your regular living expenses.
Costs will also depend on the brokerage you sign up with (there are a lot of different ways to split the pie, but every brokerage has fixed and variable costs that must be covered to keep the office open). Some use a flat monthly fee and others might use a commission charge on each sale. There are many variations, but the thing to remember is there is no such thing as a free lunch.

Good luck in your new career. I hope this has been of some help to you.

Walt Berhalter
Web Reference: http://reschool.org
0 votes Thank Flag Link Sat Feb 21, 2009
I would plan on spending $1000 per month without ANY income for the first year. On average, 1/3 of agents have no closings in any given year.
Now, I am seeing experienced agents close 2-3 properties a year (that used to do twice that number). Let's say that they sell for $500,000 on average. That's $1.5 million. Your broker gets $45,000. You get 60%, or $27,000.

If you survive, you will close 4 or so in the first two years. Then you will catch up and be at zero profit/loss. It generally takes 2 full years to get up to speed.

As they say in music "Don't give up your day job." Every time someone asks me about becoming an agent, I advise them not to do it. If you decide to go ahead, you need to have an income of at least $50,000 in another job to survive.

Frank
0 votes Thank Flag Link Sat Feb 21, 2009
My annual operating expenses to be active are approximately $2500. Licensing, E & O insurance, local, state & NAR fees, continuing ed course fees, Supra key, etc. I'm sure it is different state to state. You should speak to a local brokerage to get a better idea of what it is in Honolulu.
Good Luck!
0 votes Thank Flag Link Sat Feb 21, 2009
I would recommend for anyone who wants to become an ACTIVE professional real estate agent have one years worth of income for personal expenses.

EXPENSES:
a) Car
b) Car insurance
c) Car maintenance
d) Cell phone
e) Lap top
f) Air card where you are mobile with clients quick access to info.
g) Local board fees
h) Key pass purchase and yearly fees
i) Continue education annual classes mandatory
j) Broker monthly desk fees
k) State license renewal fees
m) Signs
n) Lock boxes
j) Website hosting
k) Efax
l) Marketing fees
m) Central Showing Service if you are listing agent
n) Broker splits

NOTE: Majority of time when you 1st start to work with client IF IN SALES it can take 90 days for that closing, however NEVER SPEND THAT MONEY till you have closing completed... lenders at times decline loan right up to closing ... OUCH... you just spent money !

Hope that assists
Web Reference: http://www.lynn911.com
0 votes Thank Flag Link Sat Feb 21, 2009
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