If you’re asking yourself this question, you are not alone. There are over 1.4 million real estate agents in the United States. There are many good reasons to join the profession. If you want the independence of being self-employed, love networking, flexible hours, and the chance to earn a great living – then real estate could be for you.
Successful agents are ambitious problem solvers with strong customer service skills. They have the ability to get along with all personality types, and have the demeanor and focus to lead clients through a very stressful time and complex transaction. It doesn’t matter how old you are, where you live, or who you know. It all comes down to your drive and the effort you put in.
New agents have different goals in mind as they enter the business. Some want to earn six figures in their first year; others want to handle a maximum of 10 transactions to keep their personal lives in balance. Either way, all new agents need to be fully engaged in the business in order to achieve a true career instead of a hobby. While the annual income of a real estate agent can range from $5,000 to $500,000, according to the National Association of REALTORS® (NAR)’s latest research, the average agent made $41,800 in 2018, a 5% increase from 2017.
Getting started requires some degree of initial funding since your first transaction might not close for 3-4 months after you receive your license. Some of the upfront costs of getting your license include:
- Cost for education
- Fees charged to take the real estate salesperson test and subsequent licensing
- Annual membership fees charged by local REALTOR® boards and MLS’s
Once you obtain your license and are affiliated with a broker, you’re typically responsible for any marketing expenses you incur as part of reaching out to your personal sphere of friends, family, and co-workers. You will also need a smartphone and a laptop or tablet if you don’t already have one.
Ready to take your first steps into real estate sales? Start by researching the requirements specific to the state in which you wish to practice. Next, select a good educator for the pre-licensing class. Note that some states allow online classes and others require live classroom instruction. Here are links for all this information for our service areas:
Now that you have passed your exam, how do you choose the right brokerage?
Start by comparing and understanding compensation, because there are a wide range of compensation plans offered. There are straight split plans where you start at a split of 50%-70% (you retain 50%-70% of the commission earned in a transaction); the split percentage may increase depending upon your production history. Capped plans offer an initial split, then once you have generated a particular amount of commission income, you “cap” and retain all commissions earned until your anniversary, then you start over again. Some firms will have franchise fees and other charges that are referred to in different terms, so make sure you ask a lot of questions until you understand it fully.
Check out the culture and reputation of the brokerage by asking around. Reach out to agents within the company you are considering, as well as agents in other firms to get a true picture.
After you have selected a company to partner with, as an independent contractor, you will effectively become your own boss and will need to manage your time carefully. You should begin to create and manage a database of contacts that you will regularly market to. Attend training classes available to you through your company or local board. Reach out and join networking groups, town and school committees, or anywhere else you will be able to network. Build and expand your social network – Facebook, LinkedIn, and Instagram are all free tools (with paid options) that will help you to network and self-promote.
The rest of your real estate career will be defined by the amount of effort you put into it. Again, it’s important to have savings on hand prior to jumping in for those expenses that build up before your first commission. Even as you move forward in your career, it’s important to budget 5%-10% of your gross income for marketing efforts.
In summary, a career in real estate can be very rewarding. You get to meet and help people with the biggest purchase and one of the most important events in their lives. With the right work ethic and commitment, you can earn a great living while having the flexibility to enjoy your family.
If you’re interested in taking the next step, contact us today to get started.