There are more than 2.25 million licensed real estate agents in North America, helping sell properties from the Pacific to the Atlantic. Even with this sizeable amount of agents out there, becoming a real estate agent is still of major interest to millions. With real estate values climbing across key markets, selling homes can be very lucrative. In fact, the top 10% of realtors make $166,000/year on average. That said, the average real e
state agent yearly takeaway is much lower at $46,000/year. Regardless, if you have the determination and perseverance to become one of the best in your local market, there’s a lot of success to be had.
Here are the steps to becoming a real estate agent.
1. What You Need to Know
Before you get going on the steps to becoming a real estate agent, it’s worth repeating that 87 percent of all new real estate agents will fail within their first five years. It can be very tough getting started and established, with high competition in the marketplace and a lot of business derived from word-of-mouth. The rewards are high however the risks are also sizeable. If you don’t have the time or money to do it right, becoming a real estate agent can be very tough.
2. Pre-Licensing Real Estate Course
The first step to becoming a real estate agent is a pre-licensing course, which can be up to 120 hours of training and is a requirement in most regions. Real estate concepts like escrow and lien are explained, real estate best practices are gone over, and the legal aspects of selling a home are emphasized. Pre-licensing courses can thankfully be taken online so if you cannot attend in person, you can likely receive training on your own schedule.
3. Real Estate Licensing Exam
Now’s time to take the real estate licensing exam. These exams are usually divided between general real estate principles, federal real estate laws and requirements, and state-specific practice. These licensing exams are usually multiple-choice with up to 100 questions, including some mathematics.
A lot of real estate commissions provide sample questions online to give you an idea on what to expect. You can also likely procure some sample tests, prior to taking your licensing exam. The likelihood of failure the first time on one of these licensing exams is as high as 50 percent.
4. Set Yourself Up
After you are licensed and are ready to make your next move, you need to activate your license through your local real estate commission’s website. After this, you can pay membership to relevant listing services which will allow you to get the word out on properties.
Listing systems like MLS will allow your property to be advertised across multiple sites, in addition to letting you pull market trends, property tax info, and see other listings before they even hit the market. Costs for these can vary and are generally an annual fee you will have to pay.
5. Becoming a Realtor
A licensed agent with the ability to use the respected title of ‘Realtor’ has to register to do so. To this point, the term ‘Realtor’ applies only to real estate agents who are members of the National Association of Realtors.
Thankfully, there are several benefits to becoming an official realtor, including adding credibility to your operations, discounts on real estate education courses, additional access to real estate market data, and transaction management services.
The steps to becoming a real estate agent isn’t always easy, especially during the beginning. While you are just getting started, it can be difficult to earn your first commission. Fortunately, there are commission services that can give you income in advance, giving you some much needed flexibility and stability in your earnings.
6. Joining a Brokerage
The next step to take – and the last before you can start selling and meeting clients – to get set up with a supervising broker. Brokers are licensed by the state, overseeing real estate transactions and ensuring that legal as well as ethical standards are being upheld. Akin to stockbrokers working within a firm to trade stocks, real estate is a similar system.
Brokerages usually provide agents with commission-only pay which means no annual salary and payment only after you complete a transaction. Because of this structure, which is of no risk to the brokerage, these organizations oftentimes are eager to welcome in new members and finding one shouldn’t be difficult.
7. Start Making Connections
Now you’re ready to get going. As a new agent, connect with experienced veterans in real estate. Make friends in the field. Find mentors who may be able to help you get ahead and establish yourself. Develop a reputation for someone who is reliable and who learns quick.
You’d be surprised at how far you can get on this alone. If there’s opportunity to connect with others within your brokerage, network and do so. The more embedded you become in your market’s real estate game, the further along you’re going to get.
8. Build an Online Presence
A lot of real estate is word-of-mouth. Some realtors to this day will tell you it’s all about who you know. As an agent starting out with little to no connections, starting a website, opening up professional-minded social media accounts, and generating attention online is a great start.
Brokerages may offer assistance with some of these strategies. Digital marketing is far less expensive than traditional marketing and can net you significantly higher ROI. It’s also the fast-track towards building your client list and starting momentum for yourself to carry you through to a successful career as a real estate agent.
