Want to jump into Pennsylvania real estate? You might be wondering how much it costs to get started. Here’s a guide to help you understand the costs involved with getting into the business. The license is one piece of it, an important first step. But you will invest more as you set up your business with a broker and market yourself in the field. We’ll start with the license, then dive into many of the other expenses that will likely come up for you.
What is the Cost to Get Your Pennsylvania Real Estate License?
Cost #1: Education ($300-$650)
Before you can get your license, you need to study. That involves taking the 75-hour Real Estate Fundamentals and Real Estate Practice course for the Commonwealth of Pennsylvania. These courses can be found online and start at about $300; in-person classes could be $600 or more.
Aceable Agent offers a completely online course for about half the cost of an in-person one. When you’re done, your test can be completed online, too. And we also offer a 100% pass guarantee or your money back!
Cost #2: Exam and Licensing Fees (up to $200)
You need to pay $40 to take your Pennsylvania real estate exam. Not everyone passes on the first try, as it is a hard test, so you may need to take it more than once.
After you complete your exam, you will need to file your application with the Pennsylvania Licensing System (PALS). The license application fee is $97. You will also need a background check. Budget an extra $10 to $25 for this.
Total Cost for Your Pennsylvania Real Estate License
Adding all of this up, your total cost to get your license will be about $500 to $850. That's not bad, but there are several other costs you may need to pay to start getting clients.
Cost #3: Association Expenses ($800-$1,200/Year)
Once you get your license, that’s when the rubber hits the road on your career. You partner with a broker and talk with him or her about what it takes to succeed.
The first big expenses will be related to local and national associations. Particularly, if you stick with residential real estate, it’s a good idea to join the local association of Realtors. This gives you access to education and networking opportunities. Being part of your local and national chapters could cost between $500 and $600 per year for dues.
But most importantly, it gives you access to the Multiple Listing Service, which is where most homes for sale are listed in a community. The MLS is also great for running property reports and comparative market analysis for your clients. If you want to add MLS access to your service (very few agents don’t), this could cost you an additional $300 to $600 per year.
Cost #4: Continuing Education (up to $200)
With your association memberships, you can gain access to a wide range of continuing education opportunities. Some agents like the a-la-carte approach and take their 14 hours every two years progressively as classes come up. Others like to take the bundled approach and complete them online at their convenience in one shot.
Pennsylvania has seven hours of required topics and seven hours of electives. Prices can range from $20 to $30 for one three-hour class to $200 for a whole package and everything in between.
The good news is that you have two years to complete the hours. And you also have the option to knock it all out in one convenient package if you get busy and forget about it until the last minute.
Cost #5: Broker Fees ($100 a Month)
You might budget $100 a month for fees to your broker as well. Your broker has to hire staff, pay rent, get office supplies, and create an environment where you can work, learn, and even bring clients. This all costs money. So, brokers need to cover some of those expenses by charging their agents. Some may charge a desk fee, while others just charge commissions. There are administrative fees, but you should count on paying some nominal amount of money to your broker every month.
You may be able to negotiate this figure down, especially if you do a lot of work from home and don’t need the office much. But it’s better to budget for the expense instead of getting surprised by it. Also, you may use the office more at first when you’re training. Then you realize you need it less as time goes on. You might be able to reduce some of these expenses later.
Cost #6: Marketing Yourself and Running Your Business ($2,000+/Year)
Business cards, cell phone plans, fax services, digital document signing software, signage for listings, and listing flyers are all things you may want to think about when starting your career. You should also expect to pay Errors and Omissions insurance, which could range from $20 to $30 per month. Lockboxes can cost $200 per year.
You also need to stay on top of technology tools so you can market yourself and communicate effectively and efficiently with customers. You may need tax software or a CRM tool to help you organize contacts and clients.
Cost #7: Vehicle Expenses ($1,500/Year)
Busy real estate agents live in their car. They are always studying the market and taking care of buyer and seller needs. That means a lot of driving around. Expect your insurance rate to bump up a little, and log your miles in a spreadsheet.
You can track your expenses for the year, or you can take the mileage deduction on your taxes. The latter usually ends up being easier and offers a good expense write-off for most agents. Keep track of your gas receipts and repairs in the first year while you track your mileage. Total both up at the end of the year, and you can easily see which benefits you most.
As you establish yourself in the business, you will get better at recognizing situations that are worth traveling for. You will be more selective and be more productive remotely. This could reduce some vehicle expenses for you.
Before you start on your path in Pennsylvania real estate, you want to have some money saved. Consider having a few months of living expenses on hand. That first sale may not come right away.
It’s also a good idea to have cash set aside for all your initial fees (education, licensing, and testing). You also want to have your first year of association dues on hand, so you don’t have to think about some of these expenses popping up every month. As sales come, reinvest as much of your early commissions as possible back into marketing and future expenses.
Ready to Get Started?
Real estate is hot in many states. If you’re a Pennsylvania resident and have always been curious about jumping into the business, now is a great time.
The good news is that most of your upfront costs like your licensing, exam, and education, are easily covered by your first commission. If you have more questions about the initial process, check out this FAQ page we put together for you.
Your success in real estate hinges a lot on planning and persistence. Be realistic about your expenses and work hard, and you may find success faster than you think!