By the end of 2015, the housing market looked more robust than it had in years, which means more people are turning to a career in real estate. When you get your real estate license, you become responsible for one of the biggest decisions your clients will ever make. In every state, the process for how to become a real estate agent is different, but there are some constants across the industry: you’ll need to use technology to keep up with the fast pace and consumer demands, you’ll need to be able to adapt; and you’ll need to develop people skills if you don’t already have them. It’s not an easy career, but it’s a rewarding one.
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 answers to some frequently asked questions.
What do I need to know before getting into real estate?
What is a real estate agent?
In the U.S., a real estate agent is a person licensed to represent a buyer or seller in a property transaction. In exchange for representing the buyer or seller, agents are typically paid commission on the price of the property — though agent compensation varies from agent to agent and brokerage to brokerage.
Who licenses real estate agents?
Real estate agents are licensed by each state (and the District of Columbia). Although every state requires pre-licensing courses, the licensing requirements can vary widely from state to state.
How many real estate agents are there?
The Bureau of Labor Statistics reports that there are 337,400 real estate agents and 83,900 real estate brokers — a total of 421,300 operatives.
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.
Realtor listings are posted for free on realtor.com, and Realtors also have access to NAR’s training programs, statistics and research. NAR advocates politically on behalf of Realtors, as well; its lobbying group is considered one of the most powerful in the country.
NAR also has constructed a code of ethics and standards of practice. It asks Realtors to complete 150 minutes of ethics training that meets its guidelines within a four-year cycle. The current cycle ends Dec. 31, 2016. Realtors may complete their ethical training through classes offered at local Realtor associations, correspondence, online courses or home study.
How many Realtors are there?
NAR reported that it had 1,160,392 members as of Sept. 30, 2015.
That’s a lot more than 421,300. Why is that?
The Bureau of Labor Statistics number is a projection “predicated on assumptions including a 5.2 percent unemployment rate in 2024 and labor productivity growth of 1.8 percent annually over the projected period.” This estimate is based on the Occupational Employment Handbook, which relies on the Occupational Employment Statistics survey, “a semi-annual mail survey of non-farm establishments.”
On the other hand, NAR membership comprises people “who are involved in residential and commercial real estate as brokers, salespeople, property managers, appraisers, counselors and others engaged in all aspects of the real estate industry.”
What does the average real estate agent make?
The median pay for real estate brokers and sales agents was $43,430 per year in 2014, according to the Bureau of Labor Statistics.
Anything else I should know before I consider getting my license?
The real estate industry is facing some challenges — consumers are not required to use their services, for example, and some technological advances have made it easier for sellers and buyers to work without agents.
There are other threats to the industry, too. More than anything, real estate industry professionals themselves say that the biggest threat to the industry is low-quality agents.
How do I get my real estate license?
How long does it take to become a real estate agent?
It varies from state to state. Because the licensing requirements are different, in some states, the pre-licensing courses can be completed and the exam taken in a matter of weeks. For example, the pre-licensing courses can be finished in 63 hours in Florida. In California, three college-level pre-licensing courses must be taken — a total of 135 hours.
Are there pre-requirements?
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.
How much does it cost to become a real estate agent?
New agents should expect to pay for their licensing classes and a fee for every time they take the real estate licensing exam. Again, those fees vary from state to state.
There are a number of other fees affiliated with becoming a real estate agent. These include MLS and/or Association fees, errors and omissions (E&O) insurance, lockboxes, annual brokerage accounting fees, brokerage materials fees (for badges, orientation binders and so on).
And you will need to spend money in order to grow your business in real estate. You will need transportation and a cell phone at the very least — at best, you will have your own marketing budget and lead generation budget. There are office supplies and business cards to be considered, too.
What happens if I fail the real estate exam?
You can retake the real estate exam if you fail. 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 it. You must wait until you have been notified that you failed the exam before you apply to re-take it in most states.
What happens if you practice real estate without a license?
Practicing real estate without a license — selling property that isn’t yours on behalf of a client — is illegal. If caught, at best, you will be fined. At worse, you will face jail time. Like licensing requirements, consequences vary from state to state.
What else do I need to become a real estate agent?
Real estate agents must find a sponsoring broker to supervise their sales. Some new agents choose to find a sponsoring broker before they take the licensing exam; others wait until they have passed the exam to find a sponsoring broker.
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 (transaction fees, association dues), marketing or advertising options (what will the brokerage provide, and what might you want to add yourself), 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 (like Redfin) offer salaries and benefits for employees.
Most brokerages, however, 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.
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 have skills solving problems 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.
Did we miss something that you think should be added here? Leave a comment.