Cost of Prelicense Education: $250–$300
The first step you must take to become a real estate broker in Washington State is to complete a 60 hour course in Real Estate Fundamentals and a 30 hour course in Real Estate Practice for a total of 90 hours. Over 30 private schools in Washington, plus many community colleges and public universities, offer these courses in classroom, home study, and online formats. The cost for the two courses plus examination preparation materials can run from approximately $250 to over $300, depending on the format.
AMP Exam Provider Fee: $138.25
The state of Washington contracts with a test provider, PSI to create and administer the qualifying exams you must take and pass in order to apply for a real estate broker license. There is a 100-question national exam and a 30-question state portion. A candidate must obtain a scaled score of 70% on both portions in order to pass. Candidates who only pass one portion must take and pass the other portion within six months or they will have to retake the entire examination. The $138.25 fee (as of 12/22/2016) covers both portions.
Broker Original License Fee: $146.25
The total fee of $146.25 goes to the Washington State Department of Licensing (DOL) The fee covers a period that expires every two years.
Criminal History Questions: No cost
You are required to complete documentation that answers a series of criminal history questions. There are no costs associated with this requirement.
Associations of REALTORS™: $300 - $400
The above items and costs are mandatory to perform acts for which a real estate license is required. Starting with joining a local association of REALTORS™, the remaining items may be discretionary and will vary depending on the real estate broker you associate with and the marketplace in which you operate. Most real estate brokers belong to local, state, and national associations of REALTORS™. The above annual costs of $300 to $400 include dues in the local, state, and national organizations. Dues are prorated based on what month you join. There may also be an application fee of up to $100. 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: $480 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). Some may have a one-time activation fee of up to $250. The MLS provides more information than the public can access online, such as 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. These cost roughly $40 per listing.
Lock Box: $200 per year
The lock box fee is typically paid monthly and can also consist of an activation fee. Having a lock box key allows agents easier access to 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. This is in the high range of what people pay by career. 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 endeavor. You certainly don’t want to have your insurance cancelled because you were in an accident and hadn’t disclosed that you changed your automobile to a commercial use.
The above expenses total roughly $2,000 for a new broker’s first year in the real estate profession. Some of these expenses can be paid on a monthly basis, and 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 Washington, you are required, on your first active renewal, to complete 90 hours in your first 2 years, thereafter, you are required to complete at least 30 hours every two years.
- 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.