The recent barrage of real estate TV shows on channels like HGTV has left many viewers interested in exploring a career in real estate. They show a fast-paced, exciting line of work that gets you out from behind a cubicle and making some serious money – many times after looking at just three houses.
It’s true that real estate is absolutely exciting, no day is ever the same and the money can be phenomenal. But, as we all know, the reality of day-to-day experiences can lie in stark contrast to the expectations of a 30-minute TV show. Here’s an inside look at what you can expect if you decide to become a real estate agent.
[See: 10 Tips to Sell Your Home Fast.]
Licensing. The first step in the process will be taking your state and national real estate course. For many years, these were conducted in a classroom setting, but they are trending online more and more. How many hours are required is dependent on the individual state, but programs offering real estate education courses, like realestateexpress.com, spell out the requirements in their state-by-state courses.
Once you’ve passed your course exam, you’ll need to take both state and national board exams. These are typically done at the same time and in the same location. Upon successful completion, you’ll have a certain number of days to become associated with a brokerage.
Finding a broker. Deciding which brokerage to partner with is by far the most important aspect of your fledgling real estate career. Take the time to research and meet with brokers either before or during your licensing classes so you don’t have to make a mad dash after passing your boards.
The most important information to find out is what a brokerage can offer you in regards to training, transaction assistance and technological tools, as well as how much they are going to charge you. After association dues, desk fees, technology fees and insurance, you could pay in excess of $10,000 a year just to be an agent. However, not all fees are required or even applicable in all areas. Depending on your brokerage, you may have a commission split so you would have few out-of-pocket expenses, but you would give a cut of all commissions to your broker.
Commission. Unlimited income potential may be one of the most alluring aspects of real estate for you, and for good reason. If you work hard and smart, develop people skills, make the right connections, learn the industry and your local market, you can make a ton of money. The average transaction side makes between 2.5 and 3 percent of the sale price. On a $250,000 house, that’s at least $6,250 in commissions. Sell just one house a month and you’re already up to $75,000 per year.
Again, it’s important to discuss with your broker how commissions work. Do you have a set split that doesn’t move? Will your split change depending on your total sales, or will you take home every dollar you make?
Hours. If you’re looking for a 9-to-5 job where you get to leave your work at the office, please stop reading this now as real estate is just not for you. If you’re looking for a part-time job to make supplemental income, again, don’t waste your time. There is no such thing as typical hours in real estate and you need to be prepared to work all hours of the day, seven days a week. You will absolutely end up showing houses at 8 a.m. one day and writing contracts at 11 p.m. another.
The times most convenient for your clients are, more often than not, evenings and weekends. This doesn’t include the plethora of paperwork and marketing you’ll be doing during the day. Discuss with more experienced agents where and how to use your time so you spend the least amount of time spinning your wheels and putting your focus where it needs to be.
Newbie status. The thing most likely to hamper your real estate career in its first few years is convincing people to trust you with the largest investment of their lives while you learn the ropes. The key goes back to who you surround yourself with in your brokerage.
Potential clients may not trust you and your three months in the business, but when they know you’re being looked over by an agent with 20-plus years of experience, it will help put them at ease. In fact, many new agents start by working with a team so they can have an experienced agent hold their hand through the first few transactions, cover their fees and potentially feed them clients.
As a newbie, you’ll want to focus on working with buyers. This will put you in a position to view as many houses as possible, have a much more hands-on learning experience of how transactions work and create a pipeline of sellers down the road.
Clients. Ultimately, the key to a long and successful career in real estate is continually working to grow your list of clientele through providing the highest level of customer service, so those you work with will rave about you to others and create a ripple effect of new clients coming in. One of the greatest aspects of real estate is the ability to work with, and create relationships with, an ever-changing group of people as you help them through one of the most important transactions of their life.
As you begin your career, you’ll most likely be taught to reach out to your “sphere of influence,” aka your friends and family as both clients and referral sources. Your first instinct may be to shy away from these groups in an effort to preserve relationships, but you can keep them intact through the fundamentals of honesty and communication. This will provide a strong foundation of principles, as you should work as hard for everyone as those you love most.