According to Zippa’s current estimates, more than 156,622 real estate agents are employed in the U.S., and the industry is growing despite the unpredictability the career can bring. But like any worthwhile endeavor, if you are creative, tenacious, and willing to put in the work, the job can be yours. So how do you know if a career as a real estate agent is right for you and what it takes to get there? Here are some answers to some frequently asked questions.
6 Steps to Becoming a Real Estate Agent
Understand Your State’s Requirements
A common question: What are the requirements to be a real estate agent? The answer varies from state to state because the licensing requirements are different. Typically, you must be at least 18 years old, have a high school diploma or equivalent and complete the real estate courses and pass the exam. Some states require the completion of prelicensing courses and the exam taken in a matter of weeks. In other states, college-level prelicensing courses are required with a minimum number of hours. Read on for more helpful information.
Take the Prelicensing Courses
License qualification requirements vary from state to state, guided by that state’s real estate commission. They usually involve fees for an application, course registration, exam registration and a criminal background check. The courses are normally offered in a variety of formats from distance learning to in-person, with a minimum number of clocked hours. Visit your state’s real estate commission website for the proper guidance on taking pre-licensing courses.
Complete the Licensing Exam
Prelicensing students must apply to their state’s real estate commission before scheduling the license exam. In addition to fees for prelicensing classes, new agents should expect to pay a fee for each real estate licensing exam. The exams are computerized and cover national general real estate principles and practices and state-specific real estate laws. While you will probably pass the first time with flying colors, if you fail you can retake the exam. Again, rules vary state by state, but there is generally no limit to the number of times you can take the exam before you pass. Also, you will likely need to take your real estate license exam in person.
Activate Your Real Estate License
After you pass your exam, submit an application along with the required documents and fees, to your state’s real estate commission. When your license is approved, you will receive it in the mail.
Consider Becoming a Realtor
So, what’s the difference between a real estate agent and a Realtor? All real estate agents are licensed by the state, but not all real estate agents are Realtors. A Realtor pays dues to the National Association of Realtors (NAR) and is entitled to the benefits of membership including access to different technologies and transaction management services; access to health, dental and personal property insurance; banking services; and discounts.
Realtors also have access to NAR’s training programs, statistics and research. NAR advocates politically on behalf of Realtors: Its lobbying group is considered one of the most powerful in the country. And the association has constructed a Code of Ethics and standards of practice, requiring Realtors to complete its training requirement every three years. Realtors must complete ethics training of not less than two hours and 30 minutes of instructional time and it may be completed through NAR’s online courses or another method, such as online or classroom courses via local/state associations.
Join a Real Estate Brokerage
A real estate agent must find a sponsoring broker to supervise their sales. Some new agents choose to find sponsoring brokers before they take the licensing exam; others wait until they have passed the exam to find sponsoring brokers and some become Realtors.
How Much Does it Cost to Become a Real Estate Agent?
In addition to the aforementioned costs of prelicensing courses and exams, there are several other fees affiliated with becoming a real estate agent. These include multiple listing service or association fees, errors and omissions insurance, lockboxes, annual brokerage accounting fees and brokerage materials fees, for such supplies as badges and orientation binders. And you need to spend money to grow your business in real estate for transportation, a cell phone, a marketing budget, office supplies, and lead generation budget.
How Long Does it Take to Start Making Money as a Real Estate Agent?
Some ask the question: How long does it take to start making real estate? The median annual wage for real estate brokers was $62,010 in May 2021, when the median annual wage for real estate sales agents was $48,340, according to
the U.S. Bureau of Labor Statistics. But to get there takes time. Many agents might begin slowly, earning a lower salary but can more than double their income after the first year. After hitting the pavement for six months without any progress, consider reaching out to other resources, such as joining a team or networking with builders and lenders.
Do I Need a Broker?
What’s the difference between a real estate agent and a broker?
Real estate brokers are also licensed by the state. The licensing requirements are more rigorous for real estate brokers than for agents, but those requirements also vary state-by-state. You must usually work for between one and three years as an agent before you can become a broker.
What should I know about my sponsoring broker?
New agents should ask their sponsoring brokers questions about training and support that the broker offers — mentoring or shadowing more experienced agents, for example. New agents will also want to ask about any monthly desk fees at the brokerage and the commission splits they can expect in their first couple of years on the job. Other questions to ask include additional fees, such as transaction fees and association dues; marketing or advertising options, such as what the brokerage will provide; the office culture and environment; referral policies; information about any regular sales meetings; and how receptionists manage and distribute phone calls are all good things to know about your potential new brokerage.
Will I be considered a brokerage employee or an independent contractor?
This depends on the brokerage. Some brokerages offer salaries and benefits for employees. However, most brokerages hire real estate agents as independent contractors. This could mean that your health insurance coverage and other benefits that are typically picked up by full-time employers might be considered your responsibility.
What do I need to do to get clients?
Know your strengths and weaknesses and act on that knowledge
If you make friends easily and have no problems approaching new people, but you aren’t very savvy about marketing, then you might want to look for a sponsoring broker who can help you market yourself but who’s relatively hands-off when it comes to generating new leads (finding new clients).
On the flip side, if you’re an introvert who finds it difficult to strike up conversations with people you don’t know very well, but you’re skilled at writing copy and putting together a marketing plan, then your ideal sponsoring broker will help you with lead generation or referrals but will let you manage your own marketing. Be sure to check out other agents’ abilities to leverage social media to help put their names and listings out there, with such offerings as podcasts, blogs, Facebook, Instagram, YouTube and Twitter.
You will need to be able to provide advice about market conditions and listing price, host open house events, prepare documents and manage negotiations for your clients. Emotions can run high, so it will help to garner skills in problem solving and soothing ruffled feathers.
Choose the right technology
There are hundreds of tech tools available to help make your job as an agent easier. These include tools to help you manage your lead generation, client documents, listing videos, listing photos, open houses, business marketing and many, many more. How do you know which technology is right for you? Pick tools that you will use. If there’s a free version or demo available, try it before you commit to spending money for something.