Becoming a successful real estate agent is a combination of investing time in education, researching a broker who can help you get your first clients and passing state and national licensing exams. But that's not all there is to the industry. Read on to find out some of the more overlooked aspects of the real estate business.
1. Get Educated
No matter in which state you live, you must take pre-licensing courses. However, state requirements differ greatly. For instance, California requires three college-level courses. Others (such as Idaho, which requires two courses totaling 90 hours) require a set number of hours of education. Contact your state's real estate commission for your state's requirements for licensing.
Some real estate agencies have specific education requirements. Thus, you may have to take an additional course after being hired on with an agency.
2. Choose a Brokerage
A real estate brokerage is the agency or office from which real estate agents and brokers work. Since working with a broker is a requirement in order to practice as a real estate agent, you will need to contact a broker before graduating from your training course. Brokers have at least three years additional real estate training, and can guide you through questions you have when it comes to working in the field, as well as listing and selling homes.
When you look for a broker, think about size of brokerage, its reputation and additional training offered. Check broker reputations by reading online comments, asking friends and neighbors who they've had experiences with and getting advice from your instructor on choosing a brokerage.
Another way to learn more about a brokerage is by carefully crafting your interview questions. This will not only help you gather information, but solid interview questions help the broker determine if you'd fit in well with the agency.
A few questions to ask:
- Does your brokerage require additional coursework?
- How many years of experience do you have?
- Is there someone within the brokerage I can work with a majority of the time while learning?
- What is your client contact style for developing leads?
- How long does it take on average to earn commission checks?
Which answers are acceptable is up to you. For instance, one person may prefer a brokerage that does ask for additional coursework because of a desire for more training before jumping in, while another may appreciate having someone who will work with them every day while learning.
3. Get Licensed
Real estate licenses require the passing of state and national exams. In addition, you may have to provide a criminal background check. Between the courses, exam and license fees for a real estate salesperson, you can expect to pay at least $200, though prices vary from state-to-state.
4. Develop a Real Estate Agent Budget
While becoming a real estate agent isn't cheap, it's cheaper than entering many professions. Startup fees are estimated between $1,500-2,000, which should be divided between licensing courses, business cards, signs and advertising and association fees – not counting additional exam fees.
Since real estate is a commission-based business, you'll also need enough money set aside for you to get by for a few months. These are approximations of actual costs because they can vary based on individual choices and state-by-state costs.
5. Make the Realtor/Real Estate Agent Decision
In order to utilize the title "realtor," you must join the National Association of Realtors (NAR). This is done by choosing an affiliated brokerage as well as attending a set number of meetings designated by your local chapter.
6. Build Your Client/Referral Portfolio
The best way to build your portfolio is twofold: get a mentor, and use your personal network. Barbara Kennon, of the National Association of Realtors, says the best arrangement for a new agent is to find a mentor in the real estate agency you choose who guides you towards buyer/seller contacts and splits commission. You'll learn the profession from your mentor, while gaining your first commission checks.
Also, asking your friends and family for referrals of people who are considering buying or selling a home is a great way to begin networking. Someone's always looking for a new home, and that referral may get you started in your new business.
The Bottom Line
Becoming a real estate agent is similar to starting a small business. Even though you'll work within a brokerage of established realtors or real estate agents, you need a startup fund for business expenses and to cover several months of personal expenses while you build your client base. Take every step seriously, and you'll have your first "sold" sign up with your savings account still intact.