Too often new agents come away from the onboarding process excited about all the potential money they could make in their new careers, but they are unprepared for the investments they’ll have to make to function as a plugged-in businessperson.

In this recurring column, Inman hosts various contributing writers who share personal and business finance insights they’ve picked up throughout their careers to help you stay financially fit.

When you’re taking on a new agent, you’re probably used to discussing commission splits and the way your team functions. Too often, however, agent orientation ends with the nice warm glowing discussion of how much agents will potentially make selling real estate.  

However, all agents — most especially new agents — desperately need to be prepared for how much they will have to spend before they open the front door on the very first property they show to house-hunting buyers. And they have to realize many of those costs recur every year whether they have commissions coming in or not. 

So do them a favor, and walk them through this reality upfront.

Fees, fees, fees

Most agencies require their agents to join the local Realtors association. When they call the local association, new agents discover they can’t simply join it. They have to gain membership in national and state associations before the local group will allow them to join. 

Association membership at the national, state and local levels combined cost about $500, and that fee has to be paid twice a year. 

The new agent looks at that annual expense of roughly $1,000 and thinks, “OK, I wasn’t expecting that, but it’s manageable.”

Then, once new agents are members of the multiple levels of Associations of Realtors, they discover that the multiple listing service (MLS) is an entirely separate entity. And they need to join that. In California, MLS dues are levied quarterly. The annual total is about $500. 

Again, this cost is not deal-breaker expensive. And for a new agent, being able to access the MLS on their brand new (expensive) iPad is amazing. The MLS gives them inside information on properties that they can’t get from public sites like or Zillow. So, this expenditure makes them feel like the real deal, finally. Best $500 they will ever spend — again and again, every year.

Their MLS membership buys them a roster of newly listed properties being held open for agent previews each week. And having homes available to tour is a major benefit, especially for new agents who need to get up to speed on their market as fast as humanly possible.

If they want to attend weekly pretour agent meetings, however, there is another annual fee. At least that’s how it works in our local market.  Obtaining a discounted year-long meeting pass is optional for our agents. But we encourage new agents to go because this is the easiest way to become acquainted with their fellow agents and learn how their more experienced peers position new listings.

If, after previewing listings new agents want to show clients the properties, they need a Supra eKEY app on their (expensive new) cell (with a personal hot spot). This allows them to open the Supra lockboxes that secure access door keys. There are, of course, annual fees for Supra access — not to mention the cost of the lockboxes themselves when agents list their first properties. 

Be prepared for fixed-business costs

Agents are typically advised to maintain a financial cushion covering at least six months’ living expenses at all times. But they need an additional cushion to devote to fixed, annual, business costs. Just opening the front door on a listing, as this example shows, costs somewhere in the $2,000-$3,000 range — every single year.  

That’s a hit many new agents simply aren’t prepared enough to take. While we can’t forewarn agents about all the ugly surprises that might lie ahead, their annual fixed business costs shouldn’t be any surprise at all.

So consider adding a detailed outline of fixed business costs in your location to your onboarding packet. 

The scout motto is right. Being prepared is everything.

Do you want to share your financial insight with the community? Reach out to us to contribute your own “Dollars and Sense” column.

Looking for more new agent advice? Click here for more on everything a rookie agent needs to know. 

Nicole Solari is owner and managing broker of The Solari Group in Solano and Napa Counties in Northern California. Nicole runs one of the highest producing brokerages in all of Northern California.

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