There are lots of questions that come up when people think about becoming a professional real estate agent. (“How do you get started in the business?” “Do I need to work with a broker?” “How much [money] do agents make a year?” “Can I make money selling real estate part-time?” etc.)
For many people who are considering a new career, or starting a side business to earn additional revenue, becoming a real estate agent has a lot to attract it.
Although becoming a realtor sounds great if you enjoy working with people and seeing interesting houses, it’s not the dream job some might imagine it to be. There’s a common misconception that real estate agents earn loads of money for doing little-to-no work.
The truth is a lot different, and there are some things to consider and commit to if you’re serious about starting down the path to selling real estate.
The first thing to do if you want to sell real estate is get your license. Some people prefer the flexibility of online classes while others do better in a classroom setting. Either way, plan to study during and after, to prepare yourself to pass the state exam.
Once you’ve finished the class you can take the state’s official test to become a licensed real estate salesperson. The test isn’t cheap, so be sure to study before signing up for the exam.
New agents usually work under the guidance of a real estate broker. Brokers provide marketing support and legal protection for agents. Before you decide where to hang your business sign, so to speak, it’s a good idea to interview with at least three different brokers, to get a sense of how they work.
Some agents enjoy working out of a large brokerage with well-known company name recognition. Others prefer mom-and-pop operations because of flexibility in terms of hours, ability to work from home, and the freedom to choose their own vendors.
The Brokerage Umbrella
Although you’ll be selling under the umbrella of a brokerage, a real estate agent is an independent contractor. That means you will need to budget money for advertising and other start up expenses.
It’s smart also to plan for annual real estate association dues, as well as membership fees in the local Multiple Listing Service (MLS). Most rookie agents work with buyers rather than taking listings. That level of house-hunting will expend a lot of gas driving around town. Take these expenses into account also.
Showing property is usually done in the evenings and on weekends, but it’s not uncommon for buyers to call asking to see a property with just a few hours’ notice.
Like many other sales positions, real estate is a commission-only business. Although the financial rewards for real estate sales can be quite lucrative, an agent may go months without a paycheck. It’s important to learn to budget for that level of variable income.
Commissions are usually paid by property sellers and are negotiable by law. Some agents get 2.5 percent of a contract purchase price and offer out the same to buyers’ agents, but that varies.
But unlike other jobs, a real estate agent or broker has limitless income potential. It isn’t unusual to see some agents who earn over a million dollars a year.
One last thing. Don’t worry if you aren’t what some people consider a “People Person.”
Investors and others who buy or sell property are undertaking one of the most expensive and important journeys of their life.
With hundreds of thousands or millions of dollars at stake, most clients consider trustworthiness, ability, and experience to be far more important than their agent’s personality. Although being sociable never hurts anyone’s real estate career, what you say is usually more important than how you present it.
The ball is in your court.