A career in real estate is potentially very lucrative, but becoming a real estate agent can be hard work — and it gets even more difficult once you are licensed.
That said, being a real estate agent comes with a number of benefits — even beyond the potential paydays — such as flexible hours and the thrill of being your own boss.
But before you start hitting the books, take some time to consider if you have the natural qualities that make a successful real estate agent and if the day-to-day sounds like something you will enjoy for years to come.
Qualities of a Successful Real Estate Agent
I spoke with Linda Kreider, senior associate at KW Commercial and Keller Williams Home Town Realty in Dayton, Ohio, to learn what makes a successful real estate agent.
She said it’s all about having the drive: “The work and effort you put into your business will determine how successful you are.”
For residential agents, who sell and buy homes for regular people, like you and me, that means you’ll be passionate about bringing buyers and sellers together. “They are usually very good at handling the emotional side of real estate,” Kreider says.
But the commercial agents — those who buy and sell business properties — “like to work with the numbers,” Kreider explains. “They work transactions that can be worth in the millions.”
Ultimately, real estate agents need to be friendly, charismatic, tenacious and transparent. They also have to know how to market themselves and their properties. “Promotion of yourself in the business is key to success,” says Linda.
Real Estate Insider Magazine adds traits such as knowledge of the local market, organization and, of course, connections (or the ability to network) as other key qualities.
The Day-to-Day of a Real Estate Agent
I asked Kreider what her day-to-day as a real estate agent looks like. Her answer, in short: It depends.
“A typical day can encompass several activities or just a few,” she says. First and foremost, you are always promoting yourself and planning where to spend your advertising dollars. In fact, there is a lot of planning involved: “You need to determine a plan to promote houses, both in print and on the internet. A large amount of time can be spent researching homes.”
Much of what you do as a real estate agent depends on whether the client is buying or selling a house. “If your client is a buyer, you need to determine what your client’s needs are, find homes that fit those needs, set appointments to look at them, show them the homes, write the contract on the one they want, help them through the loan process and make sure all inspections are taken care of.”
As if that’s not enough, you’ll be juggling a number of buyers all at once, assuming business is good.
And you’ll be helping out sellers as well. “If your client is a seller,” says Kreider, “then you need to… [do] the research for homes comparable to theirs, offer suggestions for staging the home for showings, plan an advertising strategy, handle offers that come in, make sure the buyer is qualified and make sure all terms of the contract are upheld.”
How to Become a Real Estate Agent
Assuming you are the proper age (18 or 19, depending on your state) and are a legal US citizen, you will need to complete just a few steps to become a real estate agent, according to Realtor.com:
- Take pre-licensing coursework.
- Find a brokerage.
- Pass the licensing exam.
- Activate your license and pay your membership fees.
1. Pre-Licensing Coursework
According to Kreider, the amount of pre-licensing coursework you need to take depends on your state. For example, in Ohio, where Kreider is licensed, interested candidates must complete 120 hours of various coursework and then 20 more after being licensed. My state of Tennessee, however, requires just 60 hours pre-exam and 30 hours post-exam.
Do your research to determine what courses you will need to take, which schools offer programs and how much the education will cost. It all varies by state, but Kreider does warn the cost can sometimes be prohibitive to some real estate agent hopefuls. According to one estimate, the cost can be between $300 and $1,000.
A real estate brokerage is the organization that oversees the work of several real estate agents to make sure they are conducting their business legally and ethically. According to Realtor.com, brokerages are usually eager to welcome new agents because you are of no cost to them but will earn them money. Instead of a salary, you will earn a commission on each property you sell.
Many states require you to find a brokerage before taking your exam, so it’s a good idea to start researching early. When choosing a brokerage, do thorough research yourself. Read online reviews and ask for an interview with the agency.
3. Licensing Exam
Like the coursework, the actual content and cost of the required licensing exam will vary based on your state, though the typical test will be at least $200. However, you can anticipate, regardless of your state, a section on federal real estate laws and a section on general real estate principles.
Each section will include multiple choice questions (anywhere from 60 to 100), some of which will be math-related. Be sure to study with sample questions that you can find online; many pre-licensing courses will even offer practice tests.
4. Activation and Membership Fees
As if paying for the classes and the exam wasn’t enough, upon earning your license, you will need to pay to activate it (again, it varies by state but could reach $400) and then pay for membership to the multiple listing service (MLS) so you can list properties.
Becoming a Realtor®
There is a distinction between a real estate agent and a Realtor, and it’s one worth making.
“Realtors are members of the State and National Board of Realtors,” Kreider explains, adding that — you guessed it — becoming one involves more fees. “They promise to uphold the ethical values to protect the consumer. Realtors view their real estate as a career, not a hobby.”
Realtor.com notes that this title also earns you a number of benefits, like access to crucial market data and discounts on continued education.
How Much Money Can You Make?
The commission-based nature of the work means that real estate agents and Realtors have an unlimited earning potential. However, in reality, actual earnings depend on a number of factors, including location and the size of the transaction.
Data from the Bureau of Labor Statistics states that the median pay for real estate brokers and sales agents was $50,300, or $24.18 per hour, in 2018.
According to data from the National Association of Realtors, the median gross income for Realtors with at least 16 years of experience was $71,000 in 2017. Realtors with a maximum of two years of experience had a median gross income of just $9,300. Their greatest expense was on vehicles, which cost them about $1,370 (think about all that time on the road going from property to property).
If you’ve read all of this and think real estate is the right choice for you, I wish you luck in your endeavors. As a fellow Penny Hoarder, I know how exciting it is to make a career decision that will bring you closer to achieving your financial goals.
Timothy Moore is an editor and freelance writer living in Nashville.
Editor Sushil Cheema contributed to this post.
This was originally published on The Penny Hoarder, which helps millions of readers worldwide earn and save money by sharing unique job opportunities, personal stories, freebies and more. The Inc. 5000 ranked The Penny Hoarder as the fastest-growing private media company in the U.S. in 2017.