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A Guide to Becoming a Real Estate Agent
Are you considering a career in real estate? You are in good company; many Americans hold an interest in becoming a real estate agent. This is due in part to the fact that real estate sales can offer an incredibly lucrative career - if you put the work in. It can also be an attractive business because licensing requirements, while varying from state to state, due not usually require a college degree. If you are interested in learning more about how to become a real estate agent, then please read on.
Why Become a Real Estate Agent?
A career in real estate offers a great deal of variety. You have the opportunity to work with a diverse client base as well as a wide variety of homes. Consequently it is unlikely you will feel that you are stuck in a rut, doing the same thing every day. Most real estate agents operate as independent contractors and as such you will be serving as your own boss. This means that you will be in charge of your daily schedule and controlling your own hours which is great for those with other responsibilities. The earning potential does vary widely of course. Since income is usually based on sales commissions, your earnings will depend on how many homes you sell and the market you are selling in. According to the National Association of Realtors, the median gross income an estate agent earned in 2020 was about $43,300. Keep in mind that this is the median income, which means one half of the Realtors made less while the other half made more. Hard working experienced agents will often make many times more than the median income.
If you want to make a career change into real estate, then it is important to be aware of how the process works. It takes time and money to get your license, although the specifics will vary depending on your state. While certainly not a comprehensive list, here are a few actions you can take to make the process easier.
Research Your State's Requirements
There is no such thing as a national real estate license, which is why you must do your due diligence to learn what your state requires of you. Typically, each state will have specific requirements regarding age, education, pre and post-licensing requirements, exams, applications and background checks. Some states have reciprocal licensing agreements with other states, which means that your license may work across multiple states, but this is something to research. There are a lot of amazing resources online that can help you when it comes to getting your realtor license; for example, Agent Advice has guides that detail the requirements for each individual state; they also list the best real estate schools which will be crucial to making sure that you pass the necessary exams.
Take Pre-licensing Courses
This is non-negotiable; no matter where you live, you will need to complete a number of required courses from a suitably accredited school before you will able to take the licensing exam. The number of hours you will need to complete does vary by state; some states require up to 200 hours, whereas others only require 65. Most states will offer you several ways to log these hours, either by online courses, real estate schools, or via a community college. It is worth shopping around because you can often save yourself time and money by choosing one program over another. You may also have a preference when it comes to the method that works best with your learning style or your schedule. The quality of the materials used and the instructors will impact how prepared you are and how well the exam will go, so make sure to do your research and be selective.
Sit the Licensing Exam
As part of your pre-licensing course, your instructor should explain the intricacies of the exam as well as how to schedule, register, and pay for it. If this is not covered in your training, then you can also visit your state’s real estate commission website. The exams are usually administered via a computer, and it normally consists of two parts: The national portion covers general real estate principles and practices while the state-specific portion covers the laws and legislation relevant to your state. The exams are normally multiple-choice and the number of questions as well as your allotted time to answer those questions will vary depending on the state. The two sections are scored separately, and you must usually pass them both. If you fail one, then you will need to retake the entire exam. Again, depending on the state there may be rules on the number of times you can take the exam or how long you need to wait between retakes.
Activate Your License
After you have passed your exam, you will then need to submit an application along with accompanying documents or fees required by your state’s regulatory body. The accompanying fees and documents vary from state to state, and it can cost as much as a few hundred dollars. Again, your instructors should go through this with you as part of your course; if not, you can always find more information online or at the regulatory body’s website. When your application is approved, you will then receive a certificate in the mail, and you will be searchable as a licensed real estate agent. You cannot work as a real estate agent until you receive your license.
Consider Becoming a Realtor
The terms real estate agent and Realtor are often used interchangeably, but they do differ. Realtors are members of the National Association of Realtors or NAR and, as such, subscribe to its code of ethics. It is important to point out that membership is optional, but it can add to your credibility as a real estate agent. Membership isn’t free, but it does give you access to business tools, market data, research, statistics, educational opportunities, and discounted programs. Being a member of one of the biggest trade associations in America also means that you will have a huge support system, the NAR advocates for its members. They also host networking events that can further your prospects and provide opportunities. Depending on how much use you would get out of these benefits, the membership cost may be worth it.
Join a Brokerage
While it is true that as a real estate agent you act as your own boss, you should work under the umbrella of a supervising broker. The broker should be licensed by the state to oversee transactions and make sure that you and all of the others working under them are fully compliant with legal and ethical standards. Generally, you won’t earn an hourly wage; instead, your salary will be made up of a percentage of the commission that you collect from your sales. Some brokerages do charge things like desk, tech, and marketing fees. You will also be responsible for other expenses, some yearly like renewing your license and others which are ongoing, like lockbox fees or listing service memberships. The costs can easily mount up; in the extreme, they can reach thousands of dollars every year. You should factor this into your budget when deciding if a career in real estate is for you.
In Conclusion
As mentioned above, getting into real estate does take time and money, but it can also be an incredibly rewarding and lucrative business. A career as a real estate agent can be as flexible as you need it to be; you dictate your working hours to suit you and your lifestyle. The trade-off being, of course, that this can limit your earning potential and success. However, real estate is a broad field; it holds a lot of potential for those willing to put the work in.
Meet The Author:
As a woman making her way to the top of the corporate ladder, Ella Woodward has the expertise and business knowledge to guide readers through the latest developments in the fast-paced business, financial and investment spaces. She has the contacts, instincts and insight to discover the latest deals, trades and organisations that are worth your time. Being in constant demand, she’s made this blog as a resource for you to see a small selection of the work she’s done over the years.
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