The Complete Guide to Becoming a Real Estate Agent
You will need to be at least 18 years of age. Well, unless you live in Alabama where the age requirement is 19. Becoming a real estate agent can be a very rewarding and exciting career. In theory, you can make as much money per year as you want!
However, according to the Bureau of Labor Statistics or BLS, the median pay for real estate agents is $50,300 per year or 24.18 per hour. New York has the highest average salary for real estate agents making $154,696 per year.
In this article we discuss everything from how many hours of pre licensing requirements, which vary state by state, to the best apps for real estate agents. For example, if you lived in Virginia, the course requirements are only 60 hours, compared to other states such as California, which requires 135 hours.
In the next 10 years ( 2018-2028) it is projected to grow by 7%! That’s faster than average! -Bureau of Labor Statistics
In reality, this isn’t always the case and we’ll provide you some insight that most real estate professionals and brokers won’t tell you. Ah heck! You want the good stuff!!? What are each state’s licensing requirements? How much is the application fee for your state? How to make a complaint? What schools are approved for your state? What can or can’t pass on your criminal background check? We have the answers!
Look no further!
We’ve included ALL 50 official state’s requirements for licensing, guidelines, testing, from your state’s official website!
So you hear it straight from the horse’s mouth! ( well, you can read it anyways haha.)
There is also a full blog article below the state list that offers other practical guidelines and insight. Even a calculator to help you understand how commissions work!
Click on your state below and get started today!
What do you need to become a real estate agent?
Take and pass an accredited real estate school class, exam, and your state’s official exam conducted by your state’s sanctioning body or DPOR. Most states will also require you to pass a background check as well. But that’s not all. Only the tip of the iceberg.
Becoming a real estate agent, you can and will be, at times, be handling people’s personal information and contracts worth 100’s of thousands of dollars. So, you will often be acting as a fiduciary ( a moral obligation to act in the best interest of your client(s) at all times. Even more so for real estate brokers.
So, if you meet these criteria you will need to enroll and get started by getting your real estate license through an accredited real estate school.
Real Estate Schools
Most states and real estate schools offer both in-person and online courses through their accredited schools.
In Virginia, for example, you can take your real estate class online or in person. For the full list of accredited schools from the Department of Professional and Occupational Regulation, also known as “DPOR” you can find the full list of schools here. Check your state’s official sanctioning body for professionals.
The classes you take are timed. For example, if you’re taking online classes and the classes require 60 hours of course work, you’ll have to take the entire 60 hours even if you go faster than the outline. Or if say you live in California, one is required to take 135 of pre licensing education. There will be tests and quizzes at the end of each topic that covers state and national laws.
After completing the school’s quiz and exams. You will have to take a proctored exam. $50 to $100
The cost of schooling to get a real estate license alone ranges from $160 to $500 online.
In addition, you will also have to pay for your background check and fingerprints. $50.00 to $100 per.
Important things to consider about being a real estate agent
Many people make this mistake when they choose to become a real estate agent. They have this belief that as soon as they become a real estate agent, they’ll join a brokerage and somehow just magically start getting sales and making all of this money. While this is true in some instances, and you can certainly make a lot of money in real estate, this is not always the case.
In essence, you are your own “boss” and act as an independent contractor. Some brokerages, not all, will pay for things like E&O Insurance ( Errors and omissions), office fees, and even yard signs. While others do not.
So, shop around and find the best brokerage for you and see what they have to offer. You may be surprised as to what some will and will not pay for.
This is why most real estate agents fail. They don’t have the right mindset that when you become a real estate agent. You are going into business for yourself. Technically, you are an independent contractor and will have to put in the time, money, and effort to achieve success.
Think of it as starting your own business for yourself and plan accordingly.
If we were to advise someone of becoming a real estate agent, we would tell them to have at least 6 months of living expenses covered in the beginning or start on a part-time basis until you can replace your full-time income or salary.
In addition, to needing money for Real estate school, licensing fees, business cards, yard signs, Local MLS dues, and continued education classes, which are mandatory as laws are constantly changing with the times. You need to plan accordingly for slow times.
On average it takes at least 30 days to close on a home. That’s one under contract. Not to consider getting the listing, doing open houses and getting the home under contract. So, This involves budgeting.
If you are getting concerned because of past business failures or endeavors, try not to let this deter you. You can certainly do this. Just most agents and brokers that we know of won’t tell you this upfront. We’ve been in the business and want to give you the cold hard facts before you invest any of your hard-earned money or time.
As in any business deal, you should do your due diligence and know all the facts before making any decisions.
Is Becoming a real estate agent safe?
Yes and… no. Yes, as in statistically speaking. It is not as risky as being a police officer per se, but you will definitely want to learn a few best practices in the field such as self-defense and some common-sense approaches to staying safe when showing a home or meeting with prospects. After all, the majority of people you will be meeting will be complete strangers.
We provide some helpful apps that are commonly used by real estate agents and Realtors in the section below.
According to the US Bureau of Labor Statistics (http://www.bls.gov/iag/tgs/
In that same year, there were 64 work-related fatalities (real estate sales and property management, both residential and non-residential). These fatalities were a result of transportation accidents (8), and falls, slips, and trips(15), Fires and Explosions (3), and exposure to harmful substances or environments (9). Two deaths were uncategorized.
It is estimated that 27 real estate agents were killed on the job due to violent acts of persons and animals. (https://www.bls.gov/iif/
Best Real Estate Apps for personal protection and agents
Personal Safety Apps
Real Estate Agent Apps
How do real estate commissions work?
After becoming a real estate agent and you make a sale. You will be responsible for paying a percentage of your commission to your broker. This ” fee” or “commission” helps to cover expenses related to your real estate brokers business such as ongoing and in-person training, leads given to you by the broker, overhead, marketing, copier use, office fees or “desk fees and so on are all some of the basic necessities. While most real estate brokerages are shifting to online transactions, there will be less of these fees and more money for you. Hopefully.
Since you are technically an independent contractor as a real estate sales agent. Your broker will charge anywhere between 10 to 50% of your commission. Most brokers have a structured commission based on whether you are selling a lot of proprieties, creating a lot of volume or business. The more you sell, the less your commission percentage should be.
The standard listing percentage is 6%, however, some real estate agents, this is negotiable. So, say you sell a $200,000 home with a 6% selling fee. $12,000 is what would be called the gross commission. Then, that fee will typically be split between you and the buyer’s agent (3 % each or $6,000) and then out of your $6,000, your broker would get in this example 25% or $1,500, netting you $4,500 for your sale. Sound confusing? With a little practice, you’ll get the hang of it and your broker will also help with this process.
Here’s a free commission calculator that you can play with some numbers to see what your overall and net commission would be on a sale. remember. there are two huge variables. 1. The amount that you agree to list or sell the home. 2. What percentage your broker charges.
What is is the best state to become a real estate agent?
According to Zippa, New York is the best place to become a real estate agent. With the cost of living and high demand for space in a highly-populated area that makes sense. However, in our opinion, you can do well in whichever state you live in if you apply yourself. Every state people need a home and place to live.
Another way to make money being a real estate agent is to work directly with landlords, investors, and wholesalers. You can read more about how to become a landlord here.
5 steps that will get you started and beyond
- Take a real estate education course. ( Required in every state)
- Pass your state’s exam ( A Must do )
- Apply to become an agent ( Everyone has to)
- Join a brokerage. (This is a must as you have to be an agent for at least two years before becoming a broker. )
- Continue your education through continuing education courses. ( Required by most states to keep your license.)
Becoming a real estate can be a great and rewarding career. Keep in mind that it can take time to build your customer base and close sales. Don’t forget to budget for your expenses and think about things like if the market gets slow or you aren’t selling homes as fast as you thought.
A lot of variables come into buying and selling a home. From the home not appraising for the desired value, to failing a home inspection, or the buyer not getting qualified for their loan or some other event that makes the sale fall through.
Some real estate agents make and have a very good career out of it while others fail. Like most things in life, when you apply yourself and practice and don’t give up you can succeed.
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