If you are considering your options on how to become a real estate agent, you are probably not alone. When real estate market starts to heat up, a lot of people may consider starting a real estate career: real estate commissions are financially attractive, the schedule is flexible and initial investment to get into the business is relatively low compared to other professions.
As one old agent told me, “when real estate market is at its peak, the only thing it takes to becoming a successful real estate agent is to breathe.” There is no lack of buyers and sellers which results in an abundance of business in the up market. It takes patience, established clientele base and skills to survive the down market. While weighing in your options, carefully consider the drawbacks of real estate profession: as an old saying goes, one-third of real estate agents are in business, another third is getting into business, and the final third is getting out of the business. Of that third that is in business, only small percentage does practically 90% of all the volume while others have an occasional sale or two.
Before starting a real estate career, you might consider finding a mentor first – a successful real estate broker or agent who may be in need of a part-time assistant. This is a safe way to see real estate profession from inside the trenches, learn from a seasoned professional and decide if you really want to invest time and money in becoming a real estate agent. It may take a lot more than you think if you really want to learn how to become a successful real estate agent.
The basic steps to becoming a real estate agent are relatively few and straight forward:
- You must be 18 years old and citizen or legal resident of USA;
- You must fulfill the required number of educational hours which differs from state to state (for example, CA requires 135 hours while TX – 180 hours of required education);
- You must find a sponsoring brokerage (unless you chose to have inactive license)
- You must pass the licensing exam and background check, including fingerprinting.
- You must have enough savings to help you with the marketing and to sustain you through the first few months until your business starts growing.
Take Real Estate Courses
Getting required educational courses is relatively easy whether you decide to enroll into online real estate courses or your local community college that offers real estate pre-licensing courses. Prepping yourself for the state exam to become a licensed real estate agent takes some study. There are plenty of options to chose from, with some real estate schools offering a complete package including required courses, review materials and exam preparation test with guarantees that you will pass the real estate exam (student that doesn’t pass their real estate salesperson’s licensing exam with the state on their first attempt will receive a full refund PLUS an additional 10% for a total of 110% of the purchase price returned). Note that guarantees as to the passing of real estate exam are not legal in some states so they are not offered in states, such as Florida and Tennessee, for example.
Another advantage of online real estate courses is that you may take them at your own pace (at night when kids are asleep or when you have spare time on the weekends). Many people are considering becoming a real estate agent as a change of career and it is an excellent option to slowly delve into while you continue working your old job. The study materials are not overwhelmingly complicated though real estate financing and property taxes topics can be confusing at first. Give yourself plenty of time to study and practice, practice, practice before licensing exam – this will ensure that you have the greatest chance at passing your test on the first try and that you can finally be on your way to becoming real estate agent.
Choosing a Brokerage when Starting a Real Estate Career
While searching for a sponsoring brokerage, you may find out that some do offer their own educational courses and may even pay for your licensing exam. It may be a great option if you are sure you want to work for that brokerage after you get your real estate license. An additional advantage of in-house training is that as a new agent, you will get hands-on mentoring after your licensing process is complete. Some brokerage firms require mandatory training for new agents for 1-2 years which will include marketing, MLS classes, paperwork review, farming groups, etc. Others will want you to take classes and exam prep on your own but will offer mentoring with veteran agents after you get a license. Go and interview with a few real estate brokers and see which makes you feel more comfortable – you will have a close relationship with your broker for a long time and you must feel comfortable enough to ask for help and advice when you need it. Check out the atmosphere in the office – as a new agent you need lots of help in a stimulating environment, so make sure your firm is not too cut-throat competitive (you won’t survive) or overwhelmingly cozy and filled with real estate agents that are there mostly for socializing and coffee (you will fell asleep at the wheel and will never prosper).
Besides finding the brokerage that is within your comfort zone, decide if you want to work for a big international brand name company, a small real estate brokerage local to your market or one of online discount brokers that will only charge you flat fee per transaction instead of percentage of your commission. The recent studies found that the brand name has very little to do with consumer preferences – brand is trumped by personal referrals and trust that is associated with a certain sales person as an expert in a local market. So it all depends on the business model you would choose for yourself. Check what resources each brokerage is offering to its sales agents – as a new real estate agent just starting in business every free perk can be a huge help. If you already have an established network you are bringing with you from a former career you may not need a lot of hand-holding and may feel more comfortable navigating on your own while paying less of your commission to the brokerage. There are many choices of business models out there so do your homework before making your decision. You can always change brokerages down the road if you feel it would be a better fit for your business.
Even if you will find a great firm keep in mind that the best way to learn and be paid at the same time is finding one of the most successful real estate agents in this brokerage who would be willing to take you as an assistant.
Get Your Real Estate License
You have finished your educational courses and practice test, have an idea where you want to work – now it is time to take your exam. Don’t delay actual exam date – do it while the material is fresh in your memory and keep practicing until your actual exam date. Exams are usually offered in major big cities, so you may have to travel to take your exam. You can find all necessary applications and exam dates on your state’s official government website, under department or bureau of real estate. The exam and licensing fees vary from state to state but you can expect to pay a few hundred dollars total. For example, for California, exam fee is $60, 1st re-scheduling is $15, all consequent re-schedules are $30, re-examination fee (if you don’t pass on your first try) is $60; license fee is $245 which includes fingerprinting. You also have to provide a proof of citizenship or legal residency in the United States and have a clean criminal record (no felony or misdemeanor convictions).
After successfully passing your exam, you have to wait for your license to be issued and mailed to you, before you can practice any real estate sales activities. You can take that time to familiarize yourself with the current inventory of homes for sale and required paperwork for an active listing or sale, attend sales meetings, broker’s preview and open houses, as well as work on your budget and marketing plan. After you finally receive your license, you would also need to join a local real estate board (to be able to participate in the Multiple Listing Service, or MLS) as well as National Association of Realtors (NAR) – they both require membership dues that will total around a thousand dollars. Another necessary expense item is an electronic key that will allow you unlock the box that stores keys for the houses offered for sale. Without it you won’t be able to preview properties or show it to potential buyers.
You may already know that simply getting your real estate license doesn’t mean “windfall profits” even during the most favorable times for real estate.
The questions is not “How to Become a Real Estate Agent” but “How to Become a SUCCESSFUL Real Estate Agent!
This is why you will need to spend a lot of time learning from the best in real estate field and keep taking online real estate courses or find free real estate training if those courses are too expensive.
Starting a Career in Real Estate Requires a Budget and a Marketing Plan
Keep in mind that there is no such thing as real estate agent salary, unless you are working as an assistant to some big-shot real estate agent who is paying you out of his pocket for your duties (which may be a good idea for a new licensee). If you are on your own, be prepared to have a realistic budget for some necessary start-up costs while depending completely on your savings or support of a spouse while you get your business going.
You would have to get business cards, your own custom business website, signs (when you are lucky to get a listing), some printed materials such as farming postcards, marketing newsletters or fliers to let your personal contacts know that you are now in business of real estate. Don’t ignore some free ways of publicity such as Facebook (where you can create your business page and post interesting facts and promote your brokerage listings until you get your own), Youtube , Google+ ,Twitter, Instagram, Pinterest, etc. These and many other real estate marketing ideas will be discussed later in more details. Designing and following your own business plan based on these ideas and methods is the key to becoming a successful real estate agent.
Follow Your Real Estate Marketing Plan
You would also have to prepare yourself mentally for many pitfalls and difficulties that come with real estate profession. It may take months before you see the first paycheck – even if you are lucky to get your first sale relatively soon (after six months of intense marketing). Don’t forget to factor in the time it takes to have your first escrow to close – 30-45 days or more. And sometimes houses fall out of escrow if the seller and the buyer can’t compromise on repairs or the buyer doesn’t qualify for the loan. All that time you have to eat and pay for your own mortgage. Most new real estate agents are starving and sales persons who become successful in the business don’t usually depend on quick money and can weather several months without commissions.
Learn how to be successful in real estate by working for top agents or brokers.
Real estate is people’s business, so if you don’t enjoy heavy interactions with people you won’t be successful. Even if you are a “people person” you have to practice saintly patience to deal with sellers and buyers every day. Even the most gentle and kind people can lose their cool when their home equity is at stake – the most valuable and significant investment of their lifetime. Real estate transactions also have a tendency not to go as expected and these thirty or forty days can become most stressful time for buyers and sellers, not to mention agents involved in the transaction.
What other qualities are important to be successful as a real estate agent?
Home inspectors may find major problems with the property that neither party is ready to deal with; loan approval process can present numerous challenges. So your task is to be on the top of your customer service game and demonstrate extraordinary organization skills to keep the process going while keeping buyers, sellers, and other agent informed and happy. Real estate transactions have strict legal deadlines that have to be met in performing inspections and filing requests and responses. If you miss one of these deadlines it may mean the failed transaction and lost money. Be prepared to become the best negotiator, peace-maker, confidant, and hard-truth deliverer to keep all contractors and parties to the transaction happy.
The flexible schedule you were dreaming about may not be what you expected, at all. Sometimes it may mean meeting with clients at night, when it is most convenient to them, or show a house when you’d rather be at your child’s recital. It may mean long hours, busy weekends and no vacations for a while, until you team up with someone to look after your business when you are gone. Flexible schedule, as you will learn, means that you have to be flexible to accommodate your clients’ needs. You should be prepared as soon as you get that phone call to drop what you are doing to show a house or save a transaction that is falling apart. Otherwise you lose that client and a potential paycheck to another agent who is willing to serve them right then and there.
Becoming a real estate agent may put a lot of stress on you and your closed ones. Ensure your family’s support and understanding that you may miss on some Friday date nights and Saturday morning games while you are building your business. Seasoned real estate agents make their own rules and usually pick one day a week when they are not accessible (either Sunday or Monday) so they can recharge their batteries and get their sanity back.
Prepare for More Real Estate Courses in Order to Stay Licensed
After you get your real estate license, it will take money to stay licensed as you are obligated to fulfill certain continued educational requirements every few years and pay renewal fees. These courses are available from numerous accredited real estate schools, both online and through correspondence materials that you can order. These real estate continuing education classes will take time and money to complete, though you can pick a few hours of education through the educational seminars offered by title or Escrow Company, which will list the amount of credits you get if you’d attend. Don’t delay until the last minute to complete your courses as it might be quite stressful to finish them by the deadline. You must also pay your board and NAR fees yearly (close to a thousand dollars) that you have to budget for to keep you going.
Becoming a real estate agent nowadays means that you not only will have to constantly educate yourself, be very friendly with the latest technology, keep testing new marketing methods but also be computer-smart and learn how to automate or outsource time-consuming tasks to be able to enjoy your new profession.