The real estate industry pulls in thousands of people every year. Why? It’s a career in which you can earn tons of money and become highly successful as you sell families their dream homes. And the average real estate agent makes over $47,000 a year. Knowing that, you can see why so many people would want to become one!
If showing houses and finding homes for families sounds like a career path for you, then you should consider becoming a real estate agent. However, it does take some time and a lot of dedication to get yourself established in the industry. In fact, roughly only 20 percent of new real estate agents continue after their second year. The rest quit because they’re likely making no money.
Don’t let that statistic scare you away, though. Becoming not just a real estate agent, but a successful one, is doable. With the right guidance and the willingness to put in the work, you can make your way up the ladder to becoming one of the best agents in your area.
Take a look at some of the following steps you should take if you want to become a successful real estate agent.
1. Weigh the Benefits and the Risks
Before you dive into any courses or purchase your license, you should first weigh up the risks and rewards of being a real estate agent. Becoming one is not a cheap task. Many fees are non-negotiable, including your license to sell homes. You’ll have to provide the money to do all the courses and pay any fees required, not to mention any spending you’ll need to do to sell a house.
Decide if the costs and risks of becoming a real estate agent are worth the potential income (remember that it will be based on commission, so your salary is not guaranteed). Consider your current financial situation. Could you afford to live even if you went months without any income? Would you have enough money to pay the bills as you tried to establish yourself as a real estate agent?
2. Consider the Timing
If you decide that the benefits outweigh the risks of switching careers and becoming a real estate agent, you might also want to consider the timing. Depending on where you are, whether it’s in New York City or Toronto, take a look at the housing market. For instance, is the Toronto real estate market hot enough right now that you’ll be guaranteed to make some money?
When you consider the timing of everything, you also need to look at the time you have available. There are many courses to take just to get your license. On top of that, when you are a real estate agent, there is a lot of additional work that you must do. It’s a common misconception that real estate agents don’t have to do too much work to make a hefty paycheque.
3. Know the Laws in Your Area
Becoming a real estate agent is not a federally regulated task. This means that what someone did in one state is not something that you necessarily also have to do. It’s imperative that you know and understand your state laws before beginning.
Certain states will have different laws around how someone sells a house, requirements between landlords and tenants, construction and many other things. There are even different laws across states governing how real estate agents can promote and list properties.
4. Meet All Licensing Requirements
You cannot simply watch a video on becoming a real estate agent and then start selling houses. There are licenses you must acquire and, again, each state will be different. There likely will be a pre-licensing course—which can be up to $300—that you must complete. This course will teach you the principles of what it means to be a real estate agent. You’ll have to complete a certain number of training hours provided by a certified institution.
Once you’ve done everything needed for the pre-licensing course, you can start working towards the licensing examination. The exam will likely have two parts—one for federal real estate laws and the other for laws specific to your location. Each part could have anywhere between 60 and 100 multiple-choice questions.
5. Get Your License
Once you’ve completed your training and passed your licensing exam, it’s time to get everything together and get your license. You must do this before you begin engaging with the public. There is a cost to activating your real estate license, and it again varies from state to state. It averages, though, between $200 and $400.
After you have obtained your license, you’ll want to become a member of your local multiple listing service. This service is the way that you list properties, so it’s essential that you become a member. The downside, however, is that in some states the annual fee can be over $1,000.
6. Look into Being a Realtor®
It’s quite common to use the terms Realtor® and real estate agent interchangeably. However, there are significant differences between the two that you should consider. A Realtor® is a member of the National Association of Realtors. If you have this membership, it adds to your credibility, as well as providing many perks and benefits.
A Realtor® has access to more educational opportunities, discount programs, different business tools and market data, as well as many other things that make the job desirable. It also gives you access to an online database that has public records for millions of properties. So, you should consider if becoming a Realtor® is worth it for you.
7. Team Up with a Brokerage
Joining a brokerage is not a step you can skip. It is legally required for a new real estate agent to work under the supervision of a broker.
Brokers are people that the state licenses to oversee all real estate transactions, as well as ensuring that real estate agents are adhering to all of their state laws and standards. Don’t expect a reasonable hourly wage. Chances are that the brokerage will only pay you commission based on your sales.
Every brokerage is different, but all are eager to sign on new real estate agents. It tends to come at little or no cost to the company. You will likely have to front the costs for almost everything you need to conduct business. So, shop around for a brokerage that works best for you.
Being a real estate agent can be a rewarding career. Another advantageous aspect is that your hours are somewhat flexible and you can work as little or as much as you want to. With this said, though, it’s important to weigh the cost and time needed to become a real estate agent with all of the perks. You want to ensure that after you make the investment, you will enjoy your new career path.