Guide to Real Estate License Costs in California

By Ciprian Morariu Published: April 22, 2024

Real Estate License Costs in California

Introduction to Real Estate Licensing in California

The Golden State is also known as a real estate paradise - as it is home to the best companies, great weather, and relatively less taxes. 

All these factors make it a popular destination for homebuyers and investors who want to be a part of the booming real estate market. 

With dreams in their eyes and goals in their minds, people from all walks want to make it big in the California real estate industry. 

Being an exciting and rewarding career, the real estate industry attracts thousands of beginners as well as experienced professionals. 

After all, who doesn’t like the thrill of earning commissions and feeling the satisfaction of helping people achieve their property goals?

Imagine earning a six-figure salary along with commissions and perks while enjoying a life of flexibility. Sounds like the perfect professional dream come true, doesn't it? 

If you are interested in carving a successful career path in California’s thriving real estate landscape, you need to prepare for it in a structured way. 

Wondering is it worth it to get a real estate license in California? The answer is a resounding yes! 

A licensed real estate agent or broker has access to more job opportunities and more clients, and they are considered more trustworthy overall. 

Just like a specialized doctor or a certified lawyer for advice, a licensed agent or broker provides the same level of expertise and service quality to their clients. 

Your clients will always seek to work with a credible, skilled, and experienced agent, irrespective of where they are located in California. 

The California Department of Real Estate (DRE) states that you can legally practice your profession only if you have a license

With a license, you can earn, work, and grow without restrictions or limitations. 

However, without a license, you will have to rely on a licensed agent or broker to earn your commissions.

Obtaining your real estate license is like taking your first official steps into the rewarding and lucrative world of California real estate. 

Now that you have learned about the need and importance of having a real estate license, let us learn more about the costs involved in getting one. 

Initial Real Estate License Cost in California

Many aspiring agents and brokers have a common question before starting in the world of real estate. 

They all want to know how much is a real estate license in CA so that they can plan their expenses better. 

Getting your license is like an investment, it will pay off in the long run. Let us take a look at the cost components and the overall amount you can expect to spend. 

Application Fees

To get a California real estate license, you will need to apply to the Department of Real Estate (DRE). 

The real estate license application fee is a mandatory cost and every applicant has to pay. 

The cost depends on whether you are applying for an agent or a broker’s license. For an agent’s license, you need to pay $245 and for a broker’s license, the fee is $300. 

Along with the application fee, you must also pay an additional fee for processing the fingerprints and other background verification documents. 

This should cost you around $49 if you are a California resident. 

Examination Costs

One of the most important components in getting your California real estate license is taking and clearing the license exam successfully. 

To appear for the California license test, you will have to shell out an exam application fee. 

Again, the fee will vary depending on the type of license you are applying for. For a salesperson license, you will have to pay $60 for every attempt. 

For taking a broker’s license exam, you will have to spend $90 for an attempt. 

Note that you are allowed to retake the licensing exam as many times as you want to, but there will be an additional fee for each subsequent attempt.

The cost for a fresh exam attempt will be the same as the original cost i.e. $60 for an agent’s license and $90 for a broker’s license. 

As a first-time applicant, you should also note that each time you reschedule the license exam it will cost $30. 

Is Getting a Real Estate License Worth It?

Whether your goal is to work independently or as part of a big real estate firm, getting your California real estate license is like getting a badge of your skills, knowledge, and trust.

If you are wondering how much is a real estate license in CA and if it’s worth it, you should think of it as an investment that will reap dividends in the long run. 

First and foremost, having a state-approved valid license is mandatory as per the state law and industry rules.

Failure to comply with California state law could lead to some serious legal and financial consequences. 

As per the Department of Real Estate (DRE) in California, if you participate in the sale, purchase, or renting of real estate without a license, it could land you into trouble and you might find yourself on the wrong side of the law. 

Next, let us look at the career benefits of having a state-issued and approved real estate license. 

1. Skills and Knowledge: 

One simply does not get a state-approved license, it has to be earned. 

Completing the process of applying for a real estate license requires studying for the state-approved courses and completing the mandatory pre-licensing education. 

The education and coursework will give you the skills and knowledge of the real estate industry. 

It will give you the foundation you need to succeed in the competitive landscape. 

Knowledge is power and having a strong foundation of the state and federal laws, regulations, guidelines and best practices will pay off in the long run. 

2. Trust and Credibility: 

To succeed in real estate, one must go all in to establish trust. 

Be it sellers, buyers, or investors, your clients will only work with they think you have credibility. 

Building trust with your clients is the foundation of a lasting relationship that can reap dividends in the short and long term. 

Having a real estate license means you have successfully cleared the state requirements and fulfilled all the mandatory criteria. 

Becoming a licensed professional improves your perceived credibility and trust in the eyes of potential clients. When potential and existing clients trust your credentials, they are more likely to trust your decision-making in the matters of a real estate transaction. 

3. Earnings and Commissions: 

With a California real estate license, your earnings and commission opportunities will increase manyfold, as compared to someone who does not have a license to begin with

Firstly, only a licensed salesperson will find sponsorship from a broker or brokerage firm. 

Having a state-approved license is a prerequisite that almost every senior broker expects from a new agent. 

Without a license, your likelihood of finding sponsorship will be limited and this might severely affect your earning potential. 

According to the law, only licensed agents and brokers are allowed to help clients sell, buy, or lease properties. 

Without a license, you will not be able to demand the standard commission rate or earn as per the industry-established range. 

4. Networking and Events: 

One of the most important benefits of being a licensed real estate agent or broker is having access to industry associations and networking groups. 

Real estate is a highly specialized field and it comprises a diverse number of professionals such as realtors, appraisers, attorneys, and home inspectors among many other roles. 

As an agent or broker, you will have to work closely with other professionals and this is why networking is a must to grow and succeed. 

Take for example the Multiple Listings Service (MLS) which is the country’s largest database of property listings for sale in a locality, neighborhood, or state. 

Only licensed professionals have access to the MLS database and make use of the opportunities available. 

5. Being your boss: 

Without a real estate license, you will have to rely on a licensed agent or broker to earn your share of commission as part of a real estate deal. 

With a California salesperson or broker’s license, you can take control of the deals on your own or work with your clients.  

A license allows you to legally charge commissions and take full ownership of selling or buying a property on behalf of a client. 

Only licensed agents and brokers can set the prices, decide the commissions, and negotiate the deals with a lender or financial institution. 

6. Legal Compliance: 

One of the most overlooked reasons why getting a real estate license, and complying with the law in California is a must if you want to build a successful career or business. 

As per the Department of Real Estate (DRE) in California, every real estate professional must have an active, valid license. 

Once you obtain a license, you become fully compliant with the state and federal laws. 

Thus, you will not face any restrictions or limitations in your career from the authority. 

Renewing Your Real Estate License in California

Renewal Fees

If you are an active license holder in California and want to know how much does it cost to renew a real estate license then we have put together a cost breakdown for you. 

The license renewal fee will depend on the type of license you have. 

For example, if you have a real estate agent’s license, you will be paying $245 to renew your license. 

For real estate brokers, the license renewal fee comes down to $300. 

Many active license holders might feel that the renewal fees are on the higher side, however, it is an investment to maintain your licensure and keep control of your career’s growth trajectory.

Late Renewal Penalties

It is recommended that you start the license renewal process early to avoid any last-minute rush. 

The DRE in California allows active license holders to start their renewal process 3 months before the expiration date. 

Here’s what you should always keep in mind - if you fail to renew your license on time, the cost to renew your license in CA will increase. 

Every active license holder must renew their license after every four years from the date it was issued. 

Missing the renewal deadline means you will have to bear the late renewal penalties of $367 for a salesperson’s license and $450 for a broker’s license.