Real Estate License Costs in California: How Much Will You Pay?

May 16, 2022
5 min

To become a licensed real estate agent in California, you can expect to pay, on average, between $500 and $1000. That includes exam and licensing fees and the cost of enrollment in state-approved mandatory pre-licensing courses.

Obtaining your real estate license is just the first step in launching a real estate career in California. You’ll need to spend more money and time to maintain your license and gain membership to professional organizations that will aid in your success. 

Still, it’s a small price to pay when you consider how lucrative a career in California real estate can be.

This article will break down the costs of obtaining your California real estate license and maintaining it, as well as review the cost of remaining competitive in today’s market.

The Costs of Getting a Real Estate License

To obtain a California real estate license, you will need to complete the following steps:

  1. Complete a pre-licensing program (real estate school)
  2. Submit a real estate exam application, license application, and live scan form
  3. Pass the real estate exam

These steps will determine the final cost of obtaining your real estate license. Some of the costs remain fixed, like the exam and licensing fees, while others, like pre-licensing tuition, will vary.

Real Estate School (Pre-Licensing Program)

California requires the completion of three college-level real estate courses to qualify for a real estate salesperson examination. 

These include courses on Real Estate Principles, Real Estate Practice, and another subject of your choice from an approved list, for a total of 135 hours of coursework. The cost of tuition for a pre-licensing program varies, depending on the provider, and can range from $125 to $700. 

Real Estate Exam Application Fee

The California Department of Real Estate (DRE) exam fee of $60.

Live Scan Cost (Background Check)

The live scan is a background check that uses your fingerprint to perform a California criminal and  Federal criminal history. You can expect to pay a $60 fee directly to the live scan service provider.

Real Estate License Fee

The DRE’s real estate licensing fee is $245.

How Much Does it Cost to Maintain a Real Estate License?

In California, real estate agents must renew their license every 4-years and participate in 45-hours of continuing education courses before they can apply for a renewal.

Continuing Education Courses

Continuing education consists of 45-hours of DRE-approved courses. These include an 8-hour course covering Ethics, Agency, Fair Housing, Trust Fund Handling, Risk Management, and Management and Supervision. 

Real estate agents may also choose to take classes on those subjects separately; 18-hours of courses on consumer protection; and the remaining hours on approved courses related to consumer service or protection. The cost of these courses is relatively low, with packages offered for around $60

License Renewal Fee

The DRE’s real estate licensing renewal fee is $245. But, you only need to renew your license every four years. 

Additional Real Estate License Fees

As we mentioned earlier, there are other fees that you will likely need to pay if you want to have a successful career in California’s real estate industry. 

While none of these fees are required, you will find that, to stay competitive, they may be well worth the cost.

Brokerage Fees

In California, licensed real estate agents must work for licensed brokers.

Brokers will charge a fee to the real estate agent each time that agent makes a commission from a sale. The commission between new agents and their broker is usually 50/50. More seasoned agents can strike a deal of a 70/30 or an 80/20 split.

Multiple Listing Service Fees

The Multiple Listing Service (MLS) is the most recognized and widely used database for real estate listings. For agents, MLS is crucial to success in real estate.

Real estate agents can post to the local MLS as members of a local Realtors® association and local MLS. Fees vary by association and MLS database but typically cost between $20 and $50 a month.

California Association of Realtors® Fees

The California Association of Realtors® (CAR) is a nonprofit association that helps develop programs and services to enhance a member's business ability through competency and integrity. 

To join, you must be working under a broker that is a REALTOR® member. Yearly dues are just under $184, but there are additional fees associated with the application, including your national membership dues, and other related expenses, including new member fees

National Association of Realtors® Fees 

Being a member of the National Association of Realtors® (NAR) is a nonprofit organization that gives agents the chance to build their expertise and reputation as ethical real estate professionals. 

As a member of NAR, you enjoy member benefits such as continuing education opportunities and discounts. To be a NAR member, you must first join your state or local association of Realtors®. The cost to be a member of NAR is $150.  

How Much Money Do Real Estate Agents Make in California?

According to Indeed, the average salary for a real estate agent in California is $99,581 per year. Still, the possibilities are endless for making money in the California real estate market.

Real estate agents receive a commission based on the property's sale price. The commission ranges anywhere from 1%-6% of the sale price in California. However, other factors affect the final commission amount, including the broker split and the split between the listing and buying agent. 

Still, a successful California real estate agent can far exceed the state's median salary in no time.

Final Thoughts on a Real Estate License's Costs

There are a lot of varying costs associated with obtaining and maintaining a California real estate license and jump-starting your real estate career. It is a small price to pay when you consider the earning potential that awaits you as a licensed California real estate agent.

It doesn't take long to recoup the money you spent upfront, and when the money starts rolling in from your first few sales, you will be happy you took the leap and obtained your California real estate license.

TL;DR: In California, a real estate license can cost you anywhere from $500 - $1,000. Considering you are running and operating your own business, this is a small start-up cost that can return hundreds of thousands later in your career.

May 16, 2022
5 min