How to become a real estate agent and build a business

What the business is, and how agents grow it

Texas defines the job precisely: a sales agent is “licensed by the Real Estate Commission to act as an agent on behalf of a real estate broker and their clients”, and “must be sponsored by a licensed Broker in order to perform any act of real estate services” (TREC). California requires “the supervision of a licensed broker” (California DRE). So starting this business does not mean opening an office. It means earning a license, choosing a broker and building a client base under that broker’s name.

From there, the paths we see agents take:

• Solo under a brokerage. Everyone starts here. You find your own clients and the broker supervises, holds the contracts and pays you your share.
• A team inside a brokerage. NAR’s 2026 Member Profile found REALTOR teams “typically completed 31 transaction sides and generated a median sales volume of $17.5 million in 2025.” Texas lets an agent advertise under a “Team” or “Group” name only if the ad carries the broker’s name and the broker has registered that team name with the Commission (TREC FAQ).
• Your own brokerage. Years away: Texas wants “at least four years of active experience as a license holder during the 60 months preceding” a broker application (Tex. Occ. Code 1101.356), and Florida wants an active sales associate license “for at least 24 months during the preceding 5 years” (Fla. Stat. 475.17).
• Referral only. Texas recognizes a Limited Function Referral Office, but it “must have a business entity brokerage license”, and any referral fee “must be paid to the sponsoring broker” (TREC FAQ).

The Census Bureau’s 2023 figures show how small most of these businesses are. County Business Patterns counted 163,894 offices of real estate agents and brokers with paid employees, and 92.2% of them had fewer than five employees. Nonemployer Statistics counted 824,003 real estate agent and broker businesses with no employees at all, about five for every employer office. Most agents are one-person businesses, and the tax rules below treat them that way.

The outlook for agents

Bureau of Labor Statistics data on O*NET shows 420,900 people employed as real estate sales agents in 2024, a 2025 median wage of $52,830 a year, and average projected growth of 3% to 4% from 2024 to 2034, with 36,600 openings over the period. Brokers number 111,300, with a $73,220 median (O*NET).

Treat the wage figure with care, because BLS wage data covers employees and most agents are self-employed on commission. NAR’s member data is closer to what a new agent will see: the median gross income from real estate was $59,200 in 2025, the typical member “completed nine transaction sides”, and agents “with two years or less experience earned a median of $8,000” (NAR, 2026 Member Profile).

The market is also thin. The same NAR report describes existing-home sales “hovering just above 4 million units annually”, “the lowest level since 1995.” NAR’s 2025 buyer and seller profile put first-time buyers at “a record low of 21%”, with a median age of 40, yet “88% of all home buyers used an agent or broker” and “91% of sellers used an agent.”

Licensing: no federal license, a different path in every state

There is no national real estate license. Each state licenses salespeople and brokers, and in the three states below a new licensee has to work under a sponsoring broker. Fees and hours are as of October 2026; confirm both with the commission before you enroll in a course.

State	Agency	License	Key requirements, as the agency states them
Texas	Texas Real Estate Commission	Sales Agent	Age 18, US citizen or lawfully admitted alien, TREC’s standard of “honesty, trustworthiness, and integrity”. 180 classroom hours in six 30-hour courses. Fingerprints through Texas DPS. State and national exam portions by Pearson VUE. $206 application, $43 exam, $37 fingerprints (fee schedule). Inactive until a broker sponsors you
California	Department of Real Estate	Salesperson	Age 18. Three college-level courses of at least 45 hours each: Real Estate Principles, Real Estate Practice and one elective. Exam of 150 questions in three hours, 70% to pass (DRE). $450 combined exam and license application, plus $49 Live Scan for residents (DRE fees)
Florida	DBPR, Florida Real Estate Commission	Sales Associate (RE 1)	Age 18, a US Social Security number and a high school diploma or equivalent. A 63-hour approved pre-license course, valid for two years. Pearson VUE exam. Livescan fingerprints through an FDLE-registered provider. The fee is set “as provided in the application”

Texas. You can ask TREC for a Fitness Determination ($54) before paying for school if anything in your history worries you. Fingerprints already on file with another agency “will not be accepted”, an application “expires one year from the date it is filed”, and failing either exam portion three times sends you back for more education. The first renewal needs “a total of 270 hours of qualifying course hours, and the Legal Update I and II courses” (TREC FAQ, and Tex. Occ. Code 1101.454), then 18 hours of continuing education every two years. Acting without a license is “a Class A misdemeanor punishable by confinement of up to one year in a county jail and a fine of up to $4,000.”

California. Since January 1, 2024, the Real Estate Practice course “must include components on implicit bias and fair housing”, including a role play in which the applicant plays “both the consumer and the real estate professional.” The DRE warns that a conviction “may result in the denial of a license”, and every fee is nonrefundable.

Florida. The shortest course and the harshest deadline. Before the first renewal a sales associate needs “45 hours Post-Education”, then 14 hours of continuing education each cycle (Florida Real Estate Commission). Miss the 45 hours and the license is “considered null and void”, which means retaking the 63-hour course and the state exam (Fla. Stat. 475.17). Put that deadline in your calendar the day the license arrives.

In any other state, start at the real estate commission’s site.

Errors and omissions insurance as a license condition

Some states make E&O coverage part of the license. Iowa requires “as a condition of licensure that all real estate licensees, except those who hold inactive licenses, carry errors and omissions insurance”, offers a group policy, and treats a gap as grounds to deny, suspend or revoke a license (Iowa Code 543B.47). The Texas, California and Florida pages read for this guide list no E&O requirement for a sales license. In practice many brokerages carry a policy and pass part of the cost to agents.

Choosing the broker you work under

Every state above ties you to one broker. Texas hands you “an inactive license” until a broker sponsors you. Florida says a sales associate may not work “for any person not registered as her or his employer” (Fla. Stat. 475.42). California requires a responsible broker before any licensed act.

That choice decides more than the split. Texas states that “a buyer representation agreement is a private contract between the buyer and the real estate broker, not the sales agent” (TREC FAQ), so a buyer under agreement stays with the brokerage if you move. Listings work the same way in our experience. Ask each broker you interview how the split, caps and desk fees work and who pays for E&O; whether new agents get open houses on the broker’s listings or company leads; who reviews your first contracts; and whether the CRM and your contacts leave with you.

The rules that arrive with the license

Written buyer agreements. Since August 17, 2024 (NAR settlement FAQs), NAR’s homebuyer guide tells buyers: “You will sign a written agreement with your agent before touring a home.” The agreement states your pay in objective terms (“$0, X flat fee, X percent, X hourly rate”), stops you from collecting more than that “from any source”, and carries “a conspicuous statement that broker fees and commissions are fully negotiable and not set by law.” It covers live virtual tours too. A seller can still offer to pay the buyer’s agent, but “the offer cannot be shared on a Multiple Listing Service.” A new agent needs a plain explanation of what the fee buys before meeting the first buyer.

Texas disclosure. At the “first substantive communication” about a specific property, a Texas license holder must give the written Information About Brokerage Services notice “in at least a 10-point font” (Tex. Occ. Code 1101.558).

Fair housing in advertising. Federal rules make it unlawful to publish any housing ad “which indicates any preference, limitation or discrimination because of race, color, religion, sex, handicap, familial status, or national origin” (24 CFR 100.75). The rule also reaches “selecting media or locations for advertising” that deny parts of the market information about housing, so where an ad runs counts as much as its wording. Google says “ZIP code location targeting cannot be used for Housing” ads in the US, and neither can age, gender, marital or parental status (Google Ads policy). Meta puts listing ads in its Housing special ad category, where “age, gender, ZIP code or postal code, exclusion targeting, lookalike audiences and saved audiences” are limited or unavailable (Meta).

Your broker’s name on every ad. Texas wants the broker’s name “in at least half the size of the largest contact information” for any agent or team, and counts social media and texts as advertising (22 TAC 535.155). TREC adds that an agent’s ad cannot imply the agent runs a brokerage, so a name like “Sally’s Spectacular Properties” is out. California requires your name, license number and responsible broker on “all solicitation materials intended to be the first point of contact with consumers” (BPC 10140.6), with the “eight (8) digit” number on websites and electronic ads (10 CCR 2773). Florida: “All real estate advertisements must include the licensed name of the brokerage firm” (61J2-10.025).

Referral fees and lenders. RESPA Section 8 says “no person shall give and no person shall accept any fee, kickback or other thing of value” for referring settlement business on a federally related mortgage, and the agent-to-agent exemption “has no applicability to any fee arrangements between real estate brokers and mortgage brokers” (12 CFR 1024.14). Run any lender co-marketing offer past your broker.

Setting up the business

Entity. The SBA notes you are “automatically considered to be a sole proprietorship” if you do business without registering as anything else, and that an LLC combines features of corporations and partnerships. Whether the license itself can sit in an entity is a state question. Florida will license a sales associate as “a professional corporation, limited liability company, or professional limited liability company” with Department of State authorization (Fla. Stat. 475.161); most agents elsewhere hold the license personally and ask an accountant whether an LLC is worth it.

Taxes. The IRS names “licensed real estate agents” as one of three groups of statutory nonemployees, treated “as self-employed for all federal tax purposes” when “substantially all payments for their services” are tied to sales rather than hours and the work is “performed under a written contract providing that they will not be treated as employees for federal tax purposes” (IRS). Read the independent contractor agreement your broker hands you, because it is part of that test. No one withholds tax from a commission check, so quarterly estimated payments become your job.

EIN. The IRS issues one online “in minutes for free”; if you are forming an LLC, form it with the state first.

Insurance.

• Errors and omissions. The SBA describes professional liability as cover for “financial loss as a result of malpractice, errors, and negligence.” Required in Iowa, often supplied or charged by brokerages elsewhere, and checked by Google for Local Services Ads where local law requires it.
• General liability. For “bodily injury, property damage, medical expenses, libel, slander”, per the SBA.
• Auto. You will drive clients. Ask your insurer whether your personal policy covers business use; in our experience many agents find out too late that it does not.
• Workers’ compensation. Only once you hire, and the rule is set by your state. Texas “doesn’t require most private employers to have workers’ compensation” (TDI), so check your own state’s workers’ compensation agency before your first hire.

Association dues. REALTOR is NAR’s membership mark, not a license. National dues are “$156 per member for 2027”, plus a $45 consumer advertising assessment, with state and local dues billed on top (NAR). MLS access usually comes through the local association or an MLS subscription.

Startup costs. No published estimate with a stated method was found, so none appears here. The public pieces add up from the fee pages: $286 to the state, exam provider and fingerprint vendor in Texas, $499 in California, before school tuition, association and MLS dues, E&O and brokerage fees.

Equipment, space and software

From experience rather than a sourced list: a reliable car, since showings and inspections happen across a county on short notice; lockbox access through your MLS or association; a CRM, e-signature and transaction software, which many brokerages supply; and a professional photographer for your first listings. Texas promulgates mandatory contract forms, but a buyer representation agreement “is not promulgated or regulated by TREC” and comes through the Texas Association of Realtors for its members (TREC FAQ). Most agents work from the brokerage office and home.

Commission, splits and cash flow

Your pay is a share of a commission, and every buyer agreement must say commissions “are fully negotiable and not set by law” (NAR guide). We do not quote an average rate here, because no source we would stand behind publishes one after the settlement.

Money comes through the broker. In Texas “any referral fee must be paid to the sponsoring broker” (TREC FAQ), and the broker then pays you under your split, cap or flat-fee plan. Income lands at closing, often months after the first conversation, and NAR’s $8,000 median for agents in their first two years is the planning number. Agents we know who last keep months of expenses in the bank.

The year has a shape, too. NAR’s seasonal analysis puts existing-home sales at about 16,530 a day from April to June against 11,380 from December to February. Our real estate agent marketing page charts the months; for a new agent, it means spring buyers come from conversations started in winter.

One gifting rule worth knowing early: in Texas you may not pay an unlicensed person for a referral, but “gifts of merchandise with a retail value of $50 or less are not considered valuable consideration”, and a Visa gift card that converts to cash “is not permissible” (TREC FAQ).

Hiring and safety

• Assistants. An unlicensed assistant cannot do anything that requires a license, and whether that person is an employee depends on whether “you have the right to control the details of how the services are performed” (IRS).
• Personal safety. No OSHA standard specific to agents was found, but showings to strangers in empty houses are a real risk. Habits we see in careful offices: meet new clients at the office first, share the showing schedule with someone, and keep the car parked where you can leave.

Finding the first clients

Your sphere. NAR found the typical member earned “28% of their business from repeat clients and customers, and another 22% through referrals” (NAR). A new agent has no past clients yet, so the first sphere is family, friends, former coworkers and neighbors.

Open houses. “You do not need a written agreement if you are just speaking to an agent at an open house” (NAR guide), which makes hosting your broker’s listings the one way to meet buyers before any paperwork. Bring a sign-in sheet and follow up the same day.

Google Business Profile. Google lists real estate agents among “individual practitioners”, who may hold their own profile if they “operate in a public-facing role” and “can be contacted directly at the verified location during stated hours” (Google guidelines). The brokerage keeps a separate profile, and yours should carry only your name. A virtual office “isn’t eligible for a Business Profile.” If you serve clients at their homes, you can list “up to 20 service areas”, no more than “about 2 hours of driving time” across (Google), and Google recommends video verification where it is offered (Google). Our Google Business Profile work covers the setup in detail.

Local Services Ads. Google’s real estate category screens with “license checks for each real estate agent in the firm”, professional liability insurance where local law requires it, and a verified Business Profile; in 21 states Google relies on the state licensing background check instead of running its own (Google). Agents cannot target these by ZIP code. Opting into the buyer’s or seller’s agent job types adds Home Listings Ads on mobile (Google). Apply once your license is active and your profile is verified.

Reviews. BrightLocal’s 2026 survey found 47% of consumers will not use a business with fewer than 20 reviews. The FTC’s 2024 rule bans fake reviews and incentives tied to a positive rating (FTC), so ask every client after closing, the same way, and never pay for one.

Calling and texting. Calling expired listings and owners selling on their own is the first-year tactic most likely to cost money. The FCC bars telephone solicitation to anyone on the national Do Not Call registry, and the safe harbor requires a copy of the registry “obtained from the administrator of the registry no more than 31 days prior to the date any call is made” (47 CFR 64.1200). An established business relationship lasts “eighteen (18) months” after a transaction or “three months” after an inquiry. Autodialed or prerecorded telemarketing needs “prior express written consent”, meaning an agreement “bearing the signature of the person called.” The FTC says calling someone who asked not to be called can bring “a civil penalty of $53,088 for each violation.” Ask your broker how the office scrubs lists before you dial.

When you are ready to add paid ads, our page on Google Ads explains how search and Local Services Ads fit together inside the housing rules.

What trips up new agents

• Picking a broker on split alone. In year one, training and open-house access are worth more than a few points.
• Florida’s first renewal. Forty-five post-licensing hours, or the license is void and you start again.
• Texas’s 270-hour total. Education does not end at the exam: Texas wants 270 qualifying hours and both Legal Update courses by the first renewal.
• Ads without the broker. A personal Instagram account is advertising in Texas, and every post needs the disclosure your state asks for.
• Dialing unscrubbed lists. One afternoon of calls to registered numbers can outweigh a year of commissions.

Questions about becoming a real estate agent

How many hours of classes does a real estate license take?

It depends on the state: 63 hours in Florida, at least 135 in California across three 45-hour courses, and 180 in Texas. Texas then requires 270 qualifying hours in total before the first renewal, and Florida requires 45 post-licensing hours.

How much does a Texas real estate license cost?

The state fees total $286 as of October 2026: a $206 application, a $43 exam fee paid to the exam provider and $37 for fingerprints. School tuition is separate, and an optional Fitness Determination costs $54.

Can I work as a real estate agent without a broker?

No, not in Texas, California or Florida. Texas issues an inactive license until a broker sponsors you, California requires a responsible broker, and Florida bars a sales associate from working for anyone other than a registered employer.

Do real estate agents need E&O insurance?

Some states require it of every active licensee, Iowa among them; Texas, California and Florida do not list it as a license condition. Many brokerages require or provide it anyway.

Can I cold call homeowners as a new agent?

Only within the Do Not Call rules: no calls to registered numbers without an exemption such as an established business relationship, a registry copy no older than 31 days, and written consent for autodialed or prerecorded calls.

When can I open my own brokerage?

Texas requires four years of active licensed experience in the five years before you apply, and Florida 24 months as an active sales associate in the past five years, plus a broker course of up to 72 classroom hours.

Sources

Checked on October 3, 2026. Rules and fees change, and many are set state by state or city by city: confirm the current requirements with the agency that issues them before you apply.

• Texas Real Estate Commission, sales agent license and FAQs
• Texas Real Estate Commission, fee schedule effective December 15, 2025
• Texas Occupations Code 1101.454 (first renewal education)
• Texas Occupations Code 1101.356 (broker experience)
• Texas Occupations Code 1101.558 (Information About Brokerage Services notice)
• Texas Administrative Code, 22 TAC 535.155 (advertisements)
• California DRE, salesperson license requirements
• California DRE, taking the exam
• California DRE, fees
• California Business and Professions Code 10140.6
• California Code of Regulations, 10 CCR 2773
• Florida DBPR, sales associate (RE 1) licensing checklist
• Florida Real Estate Commission, education requirements
• Florida Statutes 475.17 (qualifications and post-licensing education)
• Florida Statutes 475.42 (violations)
• Florida Statutes 475.161 (licensing as a corporation or LLC)
• Florida Administrative Code 61J2-10.025 (advertising)
• Iowa Code 543B.47 (errors and omissions insurance)
• O*NET 41-9022.00, Real Estate Sales Agents (BLS wages and projections)
• O*NET 41-9021.00, Real Estate Brokers (BLS wages and projections)
• US Census Bureau, County Business Patterns 2023 national file
• US Census Bureau, Nonemployer Statistics 2023 national file
• NAR, The Feature Sheet: 2026 Member Profile
• NAR, 2025 Profile of Home Buyers and Sellers release
• NAR, Navigating the Housing Market: A Seasonal Perspective (2024)
• NAR, settlement resources for homebuyers (July 2024)
• NAR, settlement FAQs
• NAR, membership dues information
• 24 CFR 100.75, discriminatory advertisements (Fair Housing Act)
• 12 CFR 1024.14, RESPA Section 8 referral fees
• 47 CFR 64.1200, telephone solicitation and the Do Not Call registry
• FTC, Complying with the Telemarketing Sales Rule
• IRS, statutory nonemployees
• IRS, get an employer identification number
• IRS, independent contractor or employee
• SBA, choose a business structure
• SBA, get business insurance
• Texas Department of Insurance, workers' compensation for employers
• Google, Business Profile guidelines (individual practitioners)
• Google, Business Profile service areas
• Google, Business Profile verification
• Google, Local Services Ads requirements (real estate agents and brokers)
• Google, Home Listings Ads
• Google Ads, personalized advertising policy (housing targeting limits)
• Meta, special ad categories (Housing)
• BrightLocal, Local Consumer Review Survey 2026
• FTC, final rule banning fake reviews and testimonials (2024)