What Are The Costs and Steps to a California Real Estate License?

California Real Estate License Steps and Costs

Learn how to get your license fast and easy

Note: A license is likely excessive for property flippers, builders, and home sellers, and is not required to sell your home. You can get agent savings and tools without being licensed - see below to learn more.

California Requirements

To get a license, you must:

• Be at least 18 years old
• Complete 135 hours of required education
• Apply for the license, including fingerprinting and background check
• Pass the California salesperson license exam

Step 1. Complete 135 hours of required education

• Time 135 hours
• Cost $99
• Notes: The required courses can be taken online through many sites, like licensesolution.com, realestateexpress.com, etc. Each site has slightly different pricing.

Step 2. Apply for the license, including fingerprinting and background check

• Time 1 hour
• Cost $354
• Notes: The cost consists of 3 separate fees:
  • 1) $49 fingerprint fee,
  • 2) $60 exam fee,
  • 3) $245 license fee.
    • You will pay the fingerprint fee directly to the business that does the fingerprint scan, known as a live scan service operator. You can find a nearby operator here.
    • The live scan service operator will provide you with a form that you will submit with your combination exam/license application.
    • When you submit the combination exam / license application, you will pay the exam fee ($60) and license fee ($245). Read more on the fees here. Note there is a waiting period for processing (currently 6 weeks). See the current wait times here.
    • Note you may instead submit just the exam application and wait to complete the fingerprints and submit the license application once you have passed the exam, but this is slower than doing the combination exam / license application. Honesty is a requirement for approval.

Step 3. Pass the California salesperson license exam

• Time 4 hours
• $0*
• Notes: Once your application has been processed and approved, you will be able to schedule an exam date at a nearby location: Fresno, LA area, Oakland, Sacramento, or San Diego. For locations offering electronic exams, you will get your test results immediately. For locations offering paper/pencil exam, you will get the results within 5 business days. *The cost for the exam is paid when you apply to take the exam (see the step above).

Note that you can no longer immediately take the broker exam without first practicing as a salesperson. You are now required to practice real estate full-time for two years before you can take the broker exam and open your own brokerage.

Broker Fees, REALTOR® Dues, MLS Costs, and Other Considerations

Here is the typical first year cost breakdown to join a most basic real estate brokerage.

Broker Fees $500 / sale - $1,200 The commission split (broker fee) that you pay to your broker for each property sale varies. On the lowest end, some brokers offer plans as low as $500 per sale with no monthly fees OR $100 per month with a $100 per sale fee.

Note that the lower cost brokerages may not offer the same level of training as higher cost brokerages.

REALTOR® Dues $569 This amount may vary slightly by what your local association of realtors charges. Find your local association here. 

The amount shown is for the San Diego Association of Realtors and is broken down as follows: 
1) Initial application fee = $120,
2) San Diego Association of Realtors = $110 / year, 
3) California Association of Realtors = $184 / year, 
4) National Association of Realtors = $155 / year.

MLS Costs $870 There are dozens of MLSs in California and each one costs a different amount to join and has different ongoing quarterly dues.

If you want to collect the commission offered on the MLS, you typically need to be a member of that MLS. Find your local MLS here. Example costs for different MLSs:
1) San Diego MLS = $620 / year + $250 to join
2) Sacramento MLS = $420 / year + $200 to join
3) Los Angeles MLS = $350 / year + $86 to join

Lockbox + Key $221 There are dozens of MLSs in California and each one charges different lockbox key fees. You will need to be a member of the MLS and pay the lockbox fees to be able to open lockboxes for listings on that MLS.

Typically, you will need to be a member of multiple MLSs if you plan on conducting business in more than one area. Example lockbox key fees of different MLSs:
1) San Diego MLS = $84 / year
2) Sacramento MLS = $192 / year + $50 activation
3) Los Angeles MLS = $180 / year + $50 activation

Lockboxes are sold by the local association of realtors and the price and lockbox type varies by area and the lockboxes may not be usable in other areas. Purchasing a lockbox is $137 in San Diego, $159 in Los Angeles

On the lowest end, your first year cost to be a REALTOR® and join the MLS in San Diego is $1,523, plus $137 per lockbox and $500 per transaction. You will also have to complete 45 hours of continuing education every 4 years to keep your license.

Do You Need A California Real Estate License?

If you want to sell a home that you own, the answer is no. Homeowners and property flippers often mistakenly think they need a license in order to get low cost access to agent tools, such as listing on the MLS or lockboxes.

The truth is, you can purchase the individual real estate agent services you need for a flat fee and save thousands - something that the U.S. Department of Justice has an entire webpage telling home sellers about.

Examples of services that can be purchased for a flat fee are: listing your home on the MLS (we do this for $95) or renting an MLS linked lockbox ($125). In addition, there are many brokers and attorneys available to assist with the paperwork for a nominal fee.

This post originally appeared on the homecoin.com blog.

All info herein is believed to be accurate, but is not to be considered professional advice.