The dream of helping people buy and sell property is yours, but you’re struggling to determine whether or not it will help you buy your own property someday, or at least cover your bills. Becoming a real estate agent places you in the “self-employment” career category, which naturally elicits anxiety about whether or not you’ll be able to provide for yourself. 


Questioning your dreams isn’t a comfortable space, but it’s a smart decision to know what to expect in your future career. Budgeting for your first year as a real estate agent can help you feel less stressed and give you the freedom to focus on leads and clients. 


Tim and Julie Harris have 30 years of combined real estate experience helping people buy and sell properties. Through every imaginable market change, they’ve built successful careers and now offer their career guidance to others through Harris Real Estate University. 


The team at Harris Real Estate University can help you set realistic expectations for your first year as a real estate agent. We’ll discuss your up-front career investments, your first-year expenses, and your potential to earn. We’ll also give you some vital information about how you can get more leads and increase your earning potential. 

Up-Front Investment Costs

Some agents decided on their careers because they didn’t want a four-year degree or the cost associated with it. Because the real estate industry is so lucrative, it’s absolutely plausible that you can make a six-figure salary with less than even a two-year degree. Plus, between 2020 and 2030, there is a notable expected demand for real estate agents.


You will, however, have an investment in your career in terms of education, testing, and licensing. The exact costs of each are determined state to state, but here are some estimates. 


  • Pre-licensing courses. Before you sit for your state exam, you’ll be required to take state-licensed courses. These courses vary from state to state, but the general cost is between $80-$200.00. 


  • Testing and licensing fee. You may have an application fee, the testing fee, and a retest fee if you don’t pass your exam on the first try. These fees generally range between $50-$100.00, with re-testing fees costing about $50-$75 per attempt. 


  • Post-licensing courses. Some states require post-licensing courses before you can use your license. These cost approximately the same as your pre-licensing fees of $80-$200.00


  • Fingerprinting fee. In most states, you’ll be required to have your fingerprints on file. This fee is generally $50.00. 


The total cost of becoming a real estate agent, then, is between $260-$550, depending on where you live. 

First-Year Expenses

Your first year as a real estate agent will have its share of expenses. Knowing what to expect ahead of time can prevent them from becoming unexpected. 


Even if you work for a brokerage, you’ll need to determine a budget for marketing. In your first year, you can keep costs low by marketing on free platforms, attending in-person networking events, and ensuring you have an up-to-date and engaging realtor bio online. 


You already know you’ll be in your car a lot, which means you’ll be filling up the tank more frequently. What you might not have considered is the total investment in maintenance. You’ll need oil changes more often, new tires and breaks sooner than most, and probably hit your recommended maintenance milestones more quickly. 

Continued Education

Most states have requirements for continuing education prior to renewing your yearly license. These courses are generally paid for out of your own pocket. Additionally, if you’re a member of an association like the National Association of Realtors, you’ll need to stay current on CLE requirements that keep you in good standing. 

Association Fees

Speaking of professional associations, they too cost money. Becoming a member of a professional association can give you clout with clients but can also afford you an open door to marketing and networking expos, seminars, and other informative, career-building platforms. 

Brokerage Fees

A first-year real estate agent will work for a licensed broker through a brokerage. Brokerages may operate differently, but you will usually pay the brokerage a percentage of your sales commissions up to a certain threshold or pay a flat fee yearly cost. This number is not set in stone and is unique to every agent, broker, and situation. Commissions vary and can change in every transaction.


The benefit of working for a brokerage is that they may take care of other fees you’d have to pay yourself. Multiple Listing Service (MLS) fees, errors and omissions insurance fees, office supply costs, and website hosting for your realtor bio may all be included with your brokerage fees.

Self-Employment Tax

Everyone loves the idea of being self-employed until they have to face that dreaded 15.3% self-employment tax. The IRS self-employment tax can seem daunting, but because of the Protecting Americans from Tax Hikes Act, there are numerous expenses you can itemize in your career. 


The Protecting Americans from Tax Hikes Act of 2015 helps to offset the self-employment tax and lower your tax burden. Speaking to a tax professional to discuss your personal tax situation is a great idea. Not being prepared at tax time doesn’t help your career (or your anxiety). 

How You Make Money

As a realtor, you’ll make the majority of your money through commissions.


There are two main ways you’ll make a commission: 


  • Representing a seller. As a listing agent, you’ll help a seller with the sale of their home. You’ll help them decide on a sales price, get their property listed on the MLS, and negotiate offers.


  • Representing a buyer. As a buyer’s agent, you’ll help potential homebuyers find the perfect property. You’ll take them to showings, help them determine a good offer, and handle negotiations. 


The standard real estate commission on a residential transaction is different from state to state and sometimes from county to county. Commissions will also change from sale to sale. This number is always negotiable and can alter through the buying and selling process.


For example, the selling agent might take 6%, but this is certainly not a guaranteed number. Commission percentages may fluctuate with market trends, property location, and the price range of the property.


Additionally, you’ll be splitting the commission with other real estate agents who are parties to the transaction. If you represent the seller on a transaction, you’ll split the commission with the buyer’s agent and vice versa. 

Bottom Line: Here’s What You’ll Make Year One

A first-year real estate agent can expect to make between $40,000 and $85,000. There’s a huge variance in these figures because of variables that might or might not be within your control. 


  • Location
  • Market fluctuations and trends
  • Your own personal motivation and drive
  • Hours worked
  • First year experiences. 


You can absolutely have a successful and profitable first year as a real estate agent if you’re smart, create realistic expectations, and commit to learning more about the industry as a whole. 

How To Make More Money

As a real estate agent, you have a unique opportunity not afforded in most other professions. You can give yourself a raise any time you want. Your salary is directly related to your personal investment of time, marketing, and education. Here are three steps to increasing your income. 

1.  Stay the Course

If you make less than the national average your first year as an agent, you might consider hanging it up and doing something else. Staying the course, however, will help you increase your income. Your income is directly related to your number of years in the field. 

2. Market Yourself. 

We can’t say it enough. Market, market, market. As a real estate agent, your entire career depends on how you market yourself and attain leads. At Harris Real Estate University, we equip our agents with the ability to generate leads, appeal to your target market, and increase your visibility.

3. Get Coaching

Coaching helps you understand the market and the industry from the standpoint of seasoned professionals. Learning from experienced agents helps you better prepare for your future and is the best way to get trusted, reliable, and useful career information. 

Train the Harris Way

Anyone can call themselves a coach, but if you want to hire a real estate coach who’s actually going to help you grow your business, there are three qualifications they should have. 


  1. A real estate license. You might be surprised to learn that many coaches don’t even have a real estate license. Make sure your coach does.


  1. Selling 100 homes a year. An effective coach should have plenty of face-to-face, real-life, situational experience. Selling 100 homes in a year is essential; it shows a coach has experience and has been successful, but without the third qualification, it isn’t enough.  


  1. Five years of 100+ sales. A coach you can trust has not only sold 100 homes in one year, but they’ve also done it consistently. Anyone can sell 100 homes in a year (especially if those homes are new construction). However, a resale agent that has consistently sold 100 homes in a year for more than five years has the tried and true methods of effective selling you can learn to be successful.  


The professional coaches at Harris Real Estate University meet all three qualifications and are agent obsessive. Their goals are to help you grow your business and make it as successful as their own. 

Hire a Coach and Earn More Cash

Your first year as a real estate agent may not be as lucrative as you’d like, but staying the course and investing in your career will pay dividends that you’ll see rapidly. Give yourself the ability to earn more, by learning from the most experienced coaches in the industry. The Harris Real Estate University team can help you learn how to be more successful every day. 




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