Real Estate Startup Expenses: What Costs Can New Agents Expect?
Becoming a real estate agent can offer unprecedented professional freedom and prosperity, but it is important to consider the expenses associated with getting the ball rolling. While no two brokerages are identical, there are common fees and expected expenses that are usually essential to the startup process. A key benefit of working with Champagne & Parisi is the lack of fees and costs associated with equipment, office space, and even in-house marketing services. For most new Realtors, however, these costs can be unilaterally expected, especially when working with a fee-based brokerage. Here are a few common real estate startup expenses new agents can expect when launching their careers.
Licensing and Education Fees
This is universal. Every Realtor needs to be educated and officially licensed before facilitating a real estate transaction. This requires a review of ethics, best practices, legal concerns, and any state & local considerations as part of a broader and ongoing educational process. The licensing exams can become quite pricey, which is part of why pre-licensing courses and seminars are a significant component of startup costs for Realtors. Testing can cost up to a thousand dollars depending on your location, while maintenance of your license may require additional continuing education courses.
Champagne & Parisi provides a custom domain and website access to each of our Realtors, but in most cases, you will not experience the degree of in-house marketing support our agents do. Expenses can be everything from digital assets such as websites, print ads, mailers, or outsourced labor. As a new agent, getting yourself out there is crucial since your reputation will not precede you until you have built it through hard work and diligence.
Office Space and Equipment
Office space and equipment constitute everything from workspace, computer access, phones, printers, and business cards. As a new agent, you have the benefit of choosing to work from home, however, it is a known fact that working in a shared space separate from your home in the presence of more esteemed professionals is a superior way to grow as a Realtor. Working from home is also an expense in itself – as everything from your internet equipment to the increased utility use will factor greatly into your expenses as a new agent.
Membership and Association Fees
It’s never a bad idea to join a professional association, such as the National Association of Realtors, shortened to NAR in common parlance. Your local Realty board will also afford many benefits to you, such as meeting places, professional seminars, and networking opportunities. In addition, your annual dues to your state Realty board will include things like the Realtor legal hotline, considering the many ways litigious action can be incorporated into real estate. You will also need MLS access, which is often included in
Insurance and Legal Fees
The two-letter phrase to describe these fees is E&O (errors & omissions). It’s not your fault as a Realtor that we now live in an overly litigious, bureaucratic housing market, but it is your fault for not having the proper coverage in place for honest mistakes that could cost millions. Much like doctors, though trained, are not infallible and thus require malpractice insurance, you as a Realtor require legal protections from potentially devastating litigious actions.