Licensing Fees

Start-up costs are the most prohibitive aspect of going into real estate. The licensing process can take anywhere from 3-12 months to complete and you should be prepared to spend a significant amount of money. Although it’s a spread-out process, you’ll find the fees associated with each step will add up quickly. If possible, you’ll want to continue employment elsewhere during this time to support all of the fees associated with getting your real estate license.

1. Background Check

The background check is the first step in the licensing process and is required for all Iowa real estate license applicants. It involves completing a fingerprint card and signing both state and federal waivers, which are submitted together to the Iowa Real Estate Commission through the Professional Licensing Bureau. This process ensures that the state and federal authorities can review your criminal history as part of your application.

The total cost for the background check is $51, which can be paid online when requesting the packet or by mailing a check or money order with the completed forms.

Total Cost: $51

2. 60-Hour Pre-Licensing Course

The 60-hour pre-licensing course is the most expensive step in the licensing process. The cost of the course varies so choose the course that best suits your budget. Pre-licensing courses can be taken online or in-person. In-person courses have both weekday and weekend options available. Each option comes with its own price tag and additional fees. 

In-Person Weekday Pre-Licensing Course – $375-$500

There are currently only two approved in-person weekday course providers in Iowa: the Iowa Association of REALTORS® (IAR) and the Skogman Edge-U-Cation Center. The IAR® offers the course for $375 and Skogman offers the course for $500. 

The benefit of an in-person course is that all supplementary learning materials (such as textbooks, workbooks, study guides, etc.) are included with the class so you won’t have to pay for them separately. 

Online Pre-Licensing Course – $379-$767

You can take the 60-hour pre-licensing course with any of the nine course providers currently approved by the Iowa Professional Licensing Bureau. You’ll find the cost range is much wider with online providers, which gives you the freedom to shop around to find a provider that fits your budget. However, online course providers do not necessarily give supplementary learning materials with their courses, so you may find yourself paying extra for these.

 It’s up to you to research all the pre-licensing courses currently provided and find the one that best suits your learning style while still fitting into your budget. 

Total Cost: $379-$767

3. Licensing Exam

Once you’ve completed the 60-hour pre-licensing course, you’ll take the licensing exam. The exam is administered by PSI Examination Services and costs $95 each time you take it. The fee can be paid when you register to take the exam. 

Total Cost: $95

4. Additional 12-Hour Courses

All real estate license applicants are required to complete three 12-hour courses, in addition to the 60-hour pre-licensing course. These three courses are not required for the licensing exam. In fact, most people take them once they’ve passed the exam. 

All 12-hour courses are in-person. There are no approved online providers. Each course ranges in cost from $80-140, depending on which provider you choose. 

Total Cost: $240-$420

5. License Application

Once you’ve completed the 60-hour pre-licensing course, passed the exam, and completed the three 12-hour courses, you will submit your license application. At this point, you’ll have chosen a brokerage to work with and your sponsoring broker will sign off on your application and help you obtain errors and omissions insurance (E&O). 

Some brokerages will enroll you in their own E&O plan and the cost will be rolled into your broker fees. However, some brokerages will have you carry your own insurance. If this is the case, you’ll have to enroll and pay for that before you apply for your real estate license. This cost is accounted for in the next section. 

The license application can be submitted online and there is a $125 fee. You’ll receive approval of your license within seven business days and then you can apply to join your local, state, and national REALTOR® associations.

Total Cost: $125

6. Join Local MLS and REALTOR® Association

This is the last step in the licensing process (but definitely not your last start-up cost!). Your new brokerage will walk you through joining the local Multiple Listing Service (MLS) and REALTOR® association. 

Your local REALTOR® association is the first stepping stone to the state and national associations- membership to your local group typically includes membership to the state and national ones as well. The cost to join varies by association, but you should expect to pay around $765-$1,035 upfront. This includes the entrance fees split among the local, state and national associations and the ongoing annual dues that go to all three organizations. 

From there, you’ll pay annual dues to your local association and portions of it will go to the state and national groups. Your annual dues will be prorated based on the time of year you join.

You can read more about the advantages of joining a REALTOR® association here. 

Total Cost: $765-$1035

How Much Does It Cost to Get Your Iowa Real Estate License?

Exactly how much does it cost to get your Iowa real estate license? You’re looking at spending around $1,575 to $2,300. 

Your total may vary depending on your course provider, if you purchase additional study materials for the exam, if you take the exam more than once and what your local REALTOR® association charges for dues and entrance fees.

Common Real Estate Agent Expenses

One of the most important things you can do as you start your career in real estate is plan and budget intentionally. The costs do not stop once you receive your real estate license. In fact, most expenses continue throughout your career. While some brokerages cover certain tools or services, real estate agents should expect to take on many business expenses themselves.

The National Association of REALTORS® (NAR®) publishes an annual Member Profile based on a nationwide survey of REALTORS®. The most recent report, the 2025 NAR® Member Profile (reflecting 2024 activity), provides updated insight into what agents are spending to run their businesses today.

According to the 2025 NAR® Member Profile, the median amount REALTORS® spent annually on business expenses was approximately $8,010. This is an increase from pre-pandemic levels and reflects higher costs for marketing, technology, and transportation.

This number gives you a realistic benchmark for what many agents invest each year to operate their business.

National Association of REALTORS®, “2025 Member Profile,” August 2025. Copyright © 2025 National Association of REALTORS®. Used with permission. Highlights available at nar.realtor/infographics/2025-nar-member-profile-fast-facts.

Brokerage Fees

Every brokerage operates differently, but regardless of where you work, you should expect to pay some form of brokerage fees. These may be charged monthly, annually, or per transaction.

Brokerage fees typically support services such as:

• Broker oversight and compliance

• Transaction management

• Training and education

• Trust account management

• Errors and Omissions (E&O) insurance for the brokerage

Some brokerages also include tools like marketing resources, coaching, CRMs, or office space. Others operate on a lower-fee or commission-split model, where agents pay for many of these services separately.

Administrative Expenses

Administrative expenses include the small but necessary costs that keep your business running day to day. This can include:

• Printing and supplies

• Transaction or compliance fees

• Software or document management tools

Based on recent NAR data and industry estimates, agents spend several hundred dollars annually on administrative costs, depending on what their brokerage includes.

If E&O insurance is not covered by your brokerage, agents should plan for an additional $250–$500 per year for their own policy.

Marketing

Marketing is one of the most important investments you’ll make as a real estate agent. This category includes:

• Business cards and printed materials

• Yard signs and listing marketing

• Website and domain costs

• Social media advertising

• Email marketing and third-party platforms

While older NAR reports broke this into smaller categories, current data shows marketing remains a significant and growing expense, especially as digital marketing and paid advertising become more common. Many agents spend hundreds to several thousand dollars per year, depending on their strategy and volume.

Professional Development

In Iowa, real estate agents must complete 36 hours of continuing education every three years to renew their license. Unless your brokerage provides CE at no cost, you will need to budget for:

• Required CE courses

• Elective or specialty classes

• Conferences, workshops, or coaching programs

According to NAR data, agents spend several hundred dollars annually on professional development, with newer agents often investing more as they build skills and systems.

Technology

Technology is essential to running a modern real estate business. Agents are typically responsible for:

• A computer or laptop

• Smartphone and data plan

• CRM or contact management system

• Website hosting and tools

• Email, design, or marketing software

The NAR Member Profile indicates that technology costs remain a core ongoing expense, with agents spending hundreds of dollars per year, not including major purchases like a new computer, which can range from $200 to $2,500.

Transportation

Transportation continues to be one of the largest expenses for real estate agents. Daily business activities include:

• Showing homes

• Meeting clients

• Attending inspections and closings

• Hosting open houses

• Networking and training events

Vehicle expenses include gas, insurance, maintenance, repairs, and depreciation. NAR data consistently shows transportation as a top expense category, with agents often spending $1,000+ annually, depending on mileage and vehicle costs.

MLS Dues and Lockbox Fees

To practice real estate, agents must typically join their local MLS and REALTOR® associations.

You should budget for:

• Local, state, and national REALTOR® dues

• MLS access fees

In many markets, agents spend around $500–$1,000 per year on dues alone.

If your MLS requires lockbox access:

• Lockboxes may cost around $100 each

• Lockbox access fees may range from $18 per month to $250+ annually, depending on the system used

Client Costs

Many agents invest in client experience and relationship-building, which may include:

• Client appreciation events

• Closing gifts

• Holiday cards or pop-bys

• Small thank-you gifts throughout the year

These costs vary widely based on your business style and client volume, but they should be planned for as part of your annual budget.

Health Insurance

As a real estate agent, you are typically classified as self-employed. Most brokerages do not provide health insurance, meaning you will need to:

• Purchase coverage through the healthcare marketplace, or

• Be covered through a spouse or partner’s plan

Health insurance costs vary significantly and should be considered separately from your business operating expenses.

Final Takeaway

Owning your real estate business means taking responsibility for both income and expenses. While some brokerages help offset certain costs, most agents should plan for ongoing annual business expenses averaging around $8,000, based on the most recent NAR data.

Budgeting early and understanding these costs can make a significant difference in your first year and beyond, helping you build a sustainable and profitable real estate business.

TOTAL COST FOR START-UP: UP TO $6,575-$8,590

Starting a career in real estate can be expensive but if you develop a game plan for these costs, this will be one less hurdle for you to jump over. Be aware that your first year in the real estate business will have its ups and downs but is much easier to manage when you have realistic expectations of your start-up costs and a solid budget in place. Still, feel a little lost? Check out our guide to succeeding in your first year where we cover business budgeting and the real costs in depth.