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The first step you must take to become a real estate salesperson in New York is to complete a New York Department of State approved 75-hour qualifying course. Many private schools in New York, as well as some community colleges and public universities, offer these courses in classroom, home study, and online formats. The cost for the 75-hour qualifying course can run from approximately $250 to $400, depending on the format.
Examination Fee: $15
The state of New York creates and administers the qualifying exam you must take and pass in order to apply for a real estate salesperson license. The exam consists of 75 multiple-choice questions. You must obtain 70% or better in order to pass it, and you are given 1.5 hours to finish it.
Salesperson Standard Initial Application Fee: $55
The total fee of $55, which goes to the New York Department of State, Department of Licensing Services, covers a two-year period.
Local Association of REALTORS®: $575–$745
The above items and costs are mandatory to be a be a New York real estate salesperson. The remainder, starting with this one, are discretionary and will vary depending on the real estate broker you associate with and the marketplace in which you operate. There are 31 different local associations of Realtors in New York State. Most real estate brokers belong to local, state, and national associations of REALTORS®. The annual costs of $575 to $745 include dues for the local, state, and national organizations. Dues are prorated based on the month you join. The broker you associate with will be able to tell you what organizations they belong to, and which ones you will have to join.
Multiple Listing Service: $550 per year
In addition to belonging to a local association of REALTORS®, most real estate salespeople also elect to belong to a local multiple listing service (MLS). In addition to an annual cost, you may also need to pay a one-time “new agent processing fee” of up to $25. The MLS provides more information than the public can access online, including directions for accessing property for a showing, and broker commission sharing agreements. It also provides your listings with maximum exposure to agents and buyers in your marketplace. In addition to membership fees, there are typically also fees for submitting listings.
Lock Box: $200 per year
The lock box fee is typically paid monthly and can also include an activation fee and optional insurance to cover lost or damaged keys. Without insurance, replacement of a lock box will cost you roughly $250. Having a lock box key allows agents easier access to a property. While it is not required, it is the industry standard.
Increased Auto Insurance Rates: $300 per year (approximately)
Choosing a career in real estate may have an effect on your automobile insurance rates. The national average annual rate for auto insurance for people with careers in sales or real estate is approximately $1,200. According to one nationwide study, the average annual auto insurance cost for non-sales types of employment was approximately $900. It is important to contact your insurance broker, tell them that you are getting into the real estate sales profession, and ask them if there will be any insurance ramifications to your new career. You certainly don’t want to have your insurance cancelled because you were in an accident and hadn’t disclosed that you are using your automobile for commercial purposes.
The above expenses total roughly $2,000 to $2,250 for a new salesperson’s first year in the real estate profession in New York. Some of these expenses can be paid on a monthly basis, while some are prorated. These figures are estimates only, provided at a specific moment in time, and can change without notice. In addition, you should anticipate additional, variable expenses for the following:
- Continuing education: In New York, you are required to complete 22.5 hours of continuing education every two years in order to renew your real estate license.
- Personal marketing: This can include costs associated with launching and maintaining a personal website, generating leads, promoting your listings on websites like Zillow, and creating a variety of other printed and digital marketing resources.
- Business expenses: You’ll need office supplies, a mobile phone, and internet. You’ll likely also share a number of costs with your broker, such as Errors and Omissions Professional Liability insurance.
- Technology: There will be costs associated with upgrading your computer and mobile phone to business-level. You’ll also need tax recordkeeping software, such as Quicken, and customer relationship management (CRM), such as TopProducer, in order to be as efficient with your time as possible.