This is my personal experience with becoming a real estate agent in Virginia and all of the costs involved. I am writing this post just to clarify things for anyone interested in becoming a real estate agent so that they truly understand the process and what is involved for agents in Virginia. Not that there is anything special about Virginia, that's just where I live and I wanted to share my experience. I am a full-time IT contractor for the Navy and have been interested in real estate for quite some time. I make good money doing that, but don't really have a substantial amount of extra money to invest. I also don't have any friends or family with money I can borrow to invest.
So, I recently made the decision to get more involved with the BiggerPockets' community and decided to go to a meet-up. The meet-up was hosted by someone that was an agent and every successful investor that I met there had their license. After attending that meetup and listening to a large number of the podcasts, I could see that the pros of having your license far exceed the cons, so I made the decision to get my license. I also figured it would be a good way to earn some extra money while working my full time job that I could use for investing.
So I knew I needed to take the class, but also knew that I didn't have enough bandwidth at the moment to attend in-person classes. I found RealEstateExpress.com and bought one of their packages (the Competitive Edge package) that comes with everything you need to become an agent, including the 30 hours of post-license course-ware that is also a requirement in Virginia. When I purchased it, the course was on sale for around $244. It's currently on sale now as well for Father's Day for $244 with promo code DAD30, if anyone is interested. A warning about doing the class online though, you have to commit the time and effort needed to complete the course. Online learning is not for everyone and it consist primarily of reading slides. You also have access to an instructor via email and an optional online live Q&A session scheduled everyday. So if you're good at self study, it's well worth it.
After completing the 60-hours of course-ware, in Virginia, your course final exam must be proctored by an uninterested third party. I was able to do this at my local library for free. They provided the laptop and I just logged into the Real Estate Express website, took the test, passed, and then the proctor was required to enter their contact information (including their official work email address) to verify that the test was, in fact, proctored.
After passing the proctored final course exam, you then want to start prepping for the state licensing exam. Luckily, Real Estate Express has an entire section dedicated to passing the state license exam, called Exam Prep Master. For most states, they also give you a Pass or Don't Pay Guarantee if you pass all of the Exam Prep Master practice exams with an 80% or higher. The state licensing exam for Virginia costs $60. If you fail the exam, it will cost you another $60 every subsequent time you take it as well. If you pass the exam, you will also need to pay $50 for fingerprinting for your FBI background check. Luckily, I passed on the first try.
During the time I spent going through my 60 hours of course-ware, I was also interviewing various real estate brokers. In Virginia (and I assume everywhere else), you are required to hang your license with a brokerage for it to be active. Without an active license, you cannot perform real estate transactions or get MLS access. So I interviewed a few brokers, both big international companies and smaller local brokerages. Some were Realtors and some were not. I found that in order to be a Realtor, it would cost ~$495 for the Realtor application and would then cost $295 per year to maintain that status. However, you are not required to be a Realtor. From what I understand, being a Realtor has added perks and legal benefits, but I decided it wasn't worth the added cost if you can find a brokerage with the same standards. I also learned that the commission splits vary depending on the brokerage.
It seems there are two different paths you can take as a new real estate agent. You can join a brokerage and be independent and have higher commission splits or you can join a brokerage and join a team with lower splits. There are some outliers that give you mid-range splits and consider you independent, but you'll want to interview various brokers on your own to find out what they offer. I am not going to say that either path is better than the other. It all depends on what your personal goals and constraints are. Different brokers also have different start up fees and costs. For example, as an independent agent, at most places you will need to purchase your own business cards and marketing material, some also charge you a technology fee ($50+ per month), and some even charge you to print or make copies. I personally decided that even though the commission split would be lower, the team route was the way to go for me. On the team, I don't pay out of pocket for any marketing material, there are multiple team members at my disposal (closing coordinator, marketing specialist, courier, etc.), and they provide warm leads. Leads are the life-blood of real estate, without them, you will struggle as a new agent. So while my commission split will be lower, the amount of hours I have to spend on tedious tasks (picking up signs, delivering lockboxes, etc.) will also be lower, allowing me more time to do what makes money in this business, converting leads. The onboarding fee at the brokerage I decided to go with was $199. This includes my initial order of business cards, training, etc. They also charge $250 ANNUALLY for insurance, which is prorated for the current year and they have allowed me to pay via my first commission. There is also a separate fee to the Virginia Department of Professional and Occupational Regulation (DPOR) of $170 to send off for your actual license.
Once your license is hanging at a brokerage, you will also need MLS access and eKey access (for lockboxes). In my part of Virginia (and I think in all of Virginia), the MLS is run by REIN (Real Estate Information Network). eKey is run by Supra, if I'm not mistaken (haven't gotten mine yet). Together, these fees will add up to approximately $250 PER QUARTER (~$1,000 annually). For MLS access, you also have to complete a 3.5 hour New Agent Orientation and Training at a REIN office, which mine is scheduled for June 13.
So that about sums up my experience with this process so far. As far as a timeline goes, it took me about a month and a half to get through the 60-hour training (committing at least 2-3 hours everyday), final course exam, and state licensing exam. Then once, you sign on with a brokerage, you'll want to complete any and all training you can get from them about what you'll actually be doing from day to day. It will take a few weeks for your license to come in and to complete REIN training, so this is a good way to spend that time. I also have the 30 hours of post-license course-ware I now need to complete. Luckily, it came with my initial purchase, so no extra out of pocket for that.
I haven't helped anyone buy or sell a house yet, but am extremely optimistic and hopeful that I'll jump over that hurdle soon!
Sorry if this post is categorized incorrectly, I wasn't sure where else to put it.
