Want to be a real estate agent? The promise of a flexible schedule and the potential to determine your own income draws many to the real estate industry. The National Association of Realtors, the industry’s largest trade association, reports it has more than 1.5 million members.
Becoming a licensed real estate agent is relatively simple, although the requirements vary from state to state. You’ll want to look up the specific prerequisites for your state, which are often determined by the state’s real estate commission. But state requirements are often similar, and the guidelines below apply throughout most of the U.S.
[Related:How to Find a Real Estate Agent]
Here’s what you need to do to begin a career and succeed as a real estate agent:
— Decide if real estate agent is the right career for you.
— Is 2023 a good time to become a real estate agent?
— Meet your state’s minimum age and education requirement.
— Take real estate education courses.
— Pass the state exam.
— Real estate licensing costs.
— Work under a licensed broker.
— Have the funds to get started.
— Know your market.
— Keep learning.
— Adapt to changes in your market.
[Read: How to Tactfully Back Out of a Real Estate Deal.]
Decide if Real Estate Agent Is the Right Career for You
Working as a licensed real estate salesperson is an ideal job for many, with flexible hours, high earning potential and a relatively quick process to become an agent.
Before jumping into a new career, however, know that your success in real estate may be tough to achieve. It’s beholden to the ebb and flow of the local economy, a strong understanding of the market and your willingness to put yourself out there to connect with consumers and other professionals.
Carefully weigh the pros and cons that come with being a real estate agent. While the potential income may seem limitless, in tough times for the housing market you may need additional funds to fall back on. Success in the industry is also dependent on your willingness to become a market expert, helping guide clients who are looking for the right neighborhood, negotiating a sale or even deciding whether to hold off on selling for the time being.
Is 2023 a Good Time to Become a Real Estate Agent?
The 2021-2022 housing boom is in the past and the housing market has slowed due to rising interest rates and skyrocketing home prices, but there’s still plenty of buyer demand. Housing market predictions for 2023 are trending towards a more favorable market for buyers as home prices and interest rates adjust. Prices are predicted to fall about 5% across the country in 2023, with price corrections up to 10% or more in areas where home prices jumped the most. A housing market crash is not expected in the immediate future, barring unforeseen circumstances.
But for most people being a real estate agent is a career, not a quick gig, so you’ll want to be prepared to weather the ebb and flow of the market beyond what’s coming in the next year. Housing market predictions for the next five years don’t foresee the market readjusting to pandemic highs, while the market lacks evidence for a 2008-like housing crisis.
Each market is different, too. If you’re in one of the country’s hottest housing markets, you’ll probably have an easier time finding buyers and sellers than in other, cooler areas.
If you’re wondering if it’s a good time to become a real estate agent or Realtor, try asking some local agents about their current market experience and take note of who they work for and what areas they service.
Meet the Minimum Age and Education Level
No real estate license in the U.S. requires a bachelor’s degree, but in many cases you need either a high school diploma or a GED. Even if high school equivalency isn’t required for the license, many colleges that offer real estate education courses do require equivalency to enroll. All 50 states require you to be either 18 or 19 years old, depending on the state, to become a licensed real estate agent.
Take Real Estate Education Courses
Most states require a minimum number of hours of instruction time, often either through an approved classroom or online course. Depending on the state, the requirement can be as few as 40 hours or as many as 300. Companies such as Kaplan, The CE Shop and Colibri Real Estate offer prelicense courses across multiple states. You can also inquire with your local college or even a local real estate brokerage that offers classes.
Various branches of Better Homes and Gardens Real Estate, Coldwell Banker and Re/Max throughout the U.S. offer classes, sometimes with a reimbursed or discounted fee if the agent works for the broker after receiving his or her license.
Pass the Exam
Your prelicense courses should all lead up to your real estate license exam, which is issued by the state and covers working with clients, negotiating, closing a deal and following real estate law.
Your state sets the minimum score to pass the test — in Michigan and California, for example, a 70% or higher score is required to pass, while in New Mexico a score of 75% is required. Most states allow you to retake the exam if you don’t pass the first time, though there may be a maximum number of attempts or time period between retakes.
Real Estate Licensing Costs
When you’re eligible to become a real estate agent, you’ll have to pay dues to obtain and then keep your license. Plus, it costs money to take the exam, all of which vary by state. Here’s a quick breakdown of license and test costs in a few states so you have an idea of what to expect:
— California: $60 for the exam,$245 for original and renewal licensing fees.
— New York: $15 for the exam, $65 for original and renewal licensing fees.
— Florida: $36.75 for the exam, $83.75 for the original licensing fee, $32 for renewal fees.
— Texas: $43 for the exam, $185 for the original application plus $38 for fingerprinting, $110 for renewal fees
Additionally, real estate courses to prep you for the exam can cost several hundred dollars. If you want to go the extra step and become a Realtor, you’ll need to pay $150 per year to remain a member of the National Association of Realtors. The Code of Ethics training course that NAR requires is free.
[READ: The Best Online Real Estate Schools.]
Work for a Licensed Broker
In most states, you can’t get your license and immediately set up your own firm — you need to work under an experienced broker to gain experience. There’s a wide variety of employment options, however, whether you choose a traditional brokerage where you’re placed on a team to gain experience from a top-producing agent or a nontraditional brokerage where you could work independently or specialize in a part of the transaction process that pays a salary.
At Richardson Sotheby’s International Realty in San Luis Obispo, California, the real training takes place when you work with an experienced agent. Charles Richardson, senior partner and founding member at the brokerage, says new agents work under a seasoned agent for anywhere from six months to a year, learning the ropes when it comes to meeting client needs, holding open houses, connecting with potential future clients, negotiating and getting a deal to the closing table. During that time, he says, “There’s somebody there watching you and helping you.”
Once you become a licensed real estate agent, you’re able to be a part of the transaction itself, whether you’re representing a buyer, seller, renter or landlord. Of course, the key is in how you gain experience and work to grow your business as an agent. Here are four things seasoned agents recommend for a successful start to your new career:
1. Have the funds to get started.
2. Know your market well.
3. Keep learning.
4. Be ready to adapt.
Have the Funds to Get Started
If you’re working on commission, which most real estate agents are, you likely won’t be bringing home the big bucks right away because you don’t get paid until you close a deal. Michael and Rebecca Straley, Realtors with eXp Realty in Stafford, Virginia, recommend looking at your assets before getting started.
Be ready to feel your wallet tighten as you spend the first six months to a year establishing yourself on your own as an agent before you can feel comfortable that you’ll be closing enough deals to cover your cost of living without having to dip into savings. You may want to look at alternative options, like working for a brokerage that pays a salary rather than commission, or even taking on a second job while you’re getting started.
Know Your Market Well
Taking a real estate course will help you understand local real estate law, but as a professional you’ll have clients relying on you to help interpret real estate market changes, assess the value of a property and know how to negotiate effectively. But that can’t all be taught in an online course.
“You’ve got to get in the business and learn from there,” Richardson says. He adds that the biggest success stories come from new agents who aren’t afraid to get out and introduce themselves to people they don’t know, an effective technique he discovered when he started in the business more than 50 years ago: “I learned really quick that I needed to get out and see the people.”
Get a quick look at your local market’s home sale prices and housing demand indicators with the U.S. News Housing Market Index.
[Read: Why You Should (and Shouldn’t) Sell Your Home in 2023]
Real estate agents who get repeat customers, positive reviews and high commission are often those who specialize so they can meet different consumers’ needs. As members of NAR, many Realtors take courses through the association that certify them in specific fields, like military relocation or investor representation. The Straleys teach courses for NAR for the Accredited Buyer’s Representative and Pricing Strategy Advisor certifications. “These two courses provide basic steps similar to on-the-job training with real-life applications. Real-life applications lead to anticipation, and then solutions, and then mastery,” Rebecca Straley wrote in an email.
Be Ready to Adapt
The real estate industry is greatly affected by the local economy, construction, employment rates, local government policy and interest rates. Problems in one area can make the life of a real estate agent tough, and you have to be ready to change the way you do business. “You have to adapt to the market,” Richardson says. He recalls how national economic downturns have always had a devastating effect on how many agents can stay in business.
In the early 1980s, he says, “When (interest rates were) 17%, 18%, we lost around a third of Realtors in California.” Whether it’s teaming up with specific banks to help qualified buyers, which Richardson did in the 1980s, or partnering with investors interested in house flipping, which many agents did during the Great Recession, you have to adjust your strategy to find the right clients you can work with.
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How to Become a Real Estate Agent originally appeared on usnews.com
Update 05/05/23: This story was previously published at an earlier date and has been updated with new information.