Starting a new career is an electrifying endeavor for any professional veering out of their comfort zone into the unknown. Becoming a real estate agent is an excellent opportunity to test your limits, master the art of the deal, and earn a salary by helping others facilitate one of the most important transactions of their lifetime.
So,
Should you get a college degree?
License—wait, how much does that cost?
Is it worth it? How much do real estate agents even make?
What kind of humans thrive in real estate?
Slow down! We’ll get to that, promise. Let’s start with the question of becoming an agent in the first place.
Is Becoming a Real Estate Agent Right for Me?
Becoming a real estate agent has its ups and downs. The job is truly unique, and many candidates wonder, “What are the pros and cons of being a real estate agent?”
Pros:
- Unlimited income potential
- Flexible Schedule
- Real estate is a people-centric business.
- Facilitate life-changing financial transactions
- No college degree necessary
If you’re a driven individual with excellent communication skills who enjoys creative problem solving and networking—the job might be for you. According to Payscale, the pay isn’t so bad either, averaging $48k nationwide. Another interesting fact is that the more hours you put into it, the more you earn. Real estate agents can average $99k a year if they decide to work more than 50 hours a week and even more if they invest additional time into their careers.
Although there are many benefits, real estate isn’t for everyone. When things are slow, agents might daydream of noncommissioned salaries. The people business isn’t predictable either, since some clients might hold unrealistic expectations about their selling timeline and the amount of money they can get for their home.
Cons:
- Being patient during slow periods
- Potentially demanding clients and hours (work on weekends and holidays)
- Facing rejection
- Deals falling through
- Fierce competition
Overall, the industry is great for some and not for others. Identify your skillset and take advantage of tools like personality tests to determine if real estate is a match for you.
Personality profile: In the Myers-Briggs personality test, people who identify with the Supervisor profile (ESTJ) are likely to be great real estate agents. “They excel at following set procedures closely and adhering to guidelines. They’re dedicated and hardworking. Guiding others is something they feel strongly about.” (Indeed Career Guide)
Are There Any Prerequisites?
Yes. There are prerequisites to consider before taking your pre-licensing course. And if you’ve already decided on becoming a real estate agent, congratulations! You’ve completed the first step. Now, research the costs and requirements before you sign up for the course.
Your start-up costs will be roughly $600-1000, covering the real estate course, the licensing exam, and the license itself. These costs are nonrefundable and can increase if you cannot complete the course or pass the exam. Once you’re a real estate agent, there will be other fees such as brokerage fees ($25-500+ a month) and Realtor fees ($200+ annually). Additional costs to operate include marketing, business expenses, and continued education, which all vary based on your unique situation.
The most significant cost, especially when starting, is your time. State-specific courses vary. Florida, for example, requires 63 hours of pre-licensing education before taking your exam. Texas, on the other hand, requires six 30-hour courses (180 hours). Once you’ve taken these courses, you must schedule, study, and meet state requirements to pass your exam.
Pre-Licensing Education
Real estate courses teach you each step of the buying and selling process while complying with state-mandated educational requirements. You’ll explore the different aspects of being a real estate agent and gain insight into an average day’s work. These courses are offered in-person and online at state-accredited real estate schools (all states at the time of writing allow online courses except Idaho, Rhode Island, and Connecticut).
Passing the Exam
If you don’t plan on studying for the real estate exam, that might be a mistake. The test, in most cases, is pretty tough. In California, for instance, the pass rate is roughly 44%. The exam takes approximately two to four hours to complete and includes over 100 questions in some states. Studying the course material is a solid plan of action, mainly because it costs between $50-200 each time you take the exam.
Once you receive your license, it will be valid for several years (each state’s license renewal requirements vary).
What If I’m Moving?
If you’re moving and already have a real estate license, some states will require you to retake the licensing exam and the real estate courses. Others, however, have what’s called license reciprocity. License reciprocity skips general course material and allows you to transfer your license when you complete the state-specific section of your exam.
Also, many states allow partial reciprocity, meaning they’ll enable transferring a license to a specific grouping of states. Always look into your state’s licensing requirements before deciding to study real estate.
Decide If You Want to Become a Realtor
A licensed agent can choose whether they want to become a Realtor or not. While this term is used interchangeably with “real estate agent” and “broker,” all three have a different meaning. Some agents and brokers are Realtors, while others aren’t.
Real estate agents, with the supervision of a broker, work for themselves and provide representation for their clients. One caveat is that they must work under a broker’s license and usually split their commissions or pay monthly fees.
There are additional educational requirements when becoming a broker, which is why brokers can run a real estate firm or work independently. Brokers are real estate agents who have taken their education to the next level.
Both agents and brokers can become Realtors, but it’s a matter of personal preference. Realtors are licensed professionals who adhere to the National Association of Realtors (NAR) code of ethics. They must pay a membership fee, which is a non-refundable $395 application fee at the time of writing. The fee covers applicant data form (ADF) and examination costs. Once the examination is complete, the NAR charges a $205 certification fee.
Join a Brokerage
Finding a place to hang your license is the last step before you can start earning commission for your hard work. However, choosing which company to trust with the future of your career isn’t easy.
You may become interested in a brokerage that gives you a favorable take on each sale, but real estate agents should look under the hood before making a decision. Focusing exclusively on the commission split and brokerage fees is similar to sellers who focus solely on your commission. Not all real estate agents are equal, and neither are brokerages. Picking the right broker, especially as a new agent, can give you the toolkit you need to succeed in real estate. Often, brokerages will provide you with support channels, mentorship, or even pay Realtor fees to get you started.
Finding the right brokerage starts with a series of interviews. Brokerages will determine if they want to hire you, and you’ll decide if you’re going to hire them.
Here are a few sample questions to ask during the interview:
- What are the goals of your training program?
- Do you offer continued education?
- Are there mentorship programs available?
- What do you expect from new agents?
- How does your lead distribution system work?
- Do you provide support such as transaction coordination, photography, business cards, staging coordinators, or meeting rooms?
Ultimately, you should interview with a few different brokerages. Try not to get caught up on whether they’re big, small, or a household name—focus on if they’re the best fit for your career.
The Bottom Line
If you’ve determined becoming a real estate agent meshes with your personality, career expectations, and skill set, you should research your state’s licensing guidelines. Aspiring agents should set aside time for real estate courses and study for their final exam to receive their license.
Licensed agents will need to work under a broker’s license to represent any buyer or seller. So buckle down, pull out the interview questions, and find a brokerage that will not merely allow you to practice, but enable you to thrive.
Real estate is a challenging but rewarding career choice for those passionate about the industry. With a little hard work and determination, you could be well on your way to facilitating your first real estate transaction.
