There’s no denying that a career in real estate is a huge draw. The freedom to set one’s own schedule and independently generate income has tremendous appeal — so much so that as of 2018, the Association of Real Estate License Law Officials (ARELLO) estimates that there are about 2 million active licenses in the United States.
But even though the appeal of a real estate career is great and the barrier for entry is pretty low, there are many things you must to know before getting your real estate license.
To get started, the requirements are pretty straightforward: you’ll need to take a class, pass an exam and pay several standard fees — the costs of the class and fees to get your license vary by state.
You can even take the class online with Groupon now, and many people do. But before taking the leap and tackling these initial steps, there are a number of things to think through and prepare for as you set yourself up for success.
1. The class and the exam
There are several different ways to take the initial real estate licensing class, including online, in-person, via live stream and/or in the classroom. You should expect a minimum of two to three months to get licensed, unless you’re taking a single-week cram course, as Nico Hohman noted in an Inman article last year.
If you don’t pass the test, you’ll have to wait at least one month before you can take it again.
2. The costs
You will probably spend around $200 to $400 on courses, textbooks, exam prep and testing, as Hohman noted. And even after you pay these initial fees to take a class and the licensing exam, there are several different (and ongoing) costs to be aware of and prepare for.
Being part of the boards, such as your local real estate board and the National Association of Realtors (NAR), is very important. These organizations help with marketing and networking, and you never know when you may have an out-of-town buyer in search of an agent referral in your city.
NAR also has guidelines — the code of ethics and fair housing — that agents and brokers need to adhere to. These are mandatory, and every agent and broker needs to take a refresher every two years. Annual dues here in Syracuse are around $565 a year.
Multiple listing service (MLS) fees are also crucial. This is where all listings go so agents and brokers can see what is on the market for their clients. Once listings are in the MLS, they syndicate to hundreds of other housing websites. If you don’t pay the MLS fees, which are $600 a year, you are not allowed on the MLS and will not be able to list or see houses, which would make it difficult to help your clients to the fullest.
3. The materials
Before you kick off your career, it is helpful to have both an electronic lockbox key and several other supplies. The lockbox, which will typically run you $18 to $35, is useful because it allows safe access into the homes that are for sale by other agents. It also gives homeowners security and piece of mind knowing their house is protected.
Lockboxes record who opens them and when so the listing agent is always aware of activity.
4. The pay
Even before the remuneration begins to roll in, it’s important to be mentally (and financially) prepared for how it works. Unlike many careers, there are generally no paychecks. Most brokerages around the country are on a commission only payment, and agents are independent contractors.
In some rare cases, brokerages will give a base salary and then commissions, but in those scenarios the splits are typically much lower for the agents. The good news is that commission is always negotiable. There is never a standard, and it varies from place to place.
For the rest of us, it is advisable to have three to six months worth of expenses saved before starting. It can take up to 45 or even 60 days to see that first commission check, depending on when you get a property sold.
5. The mindset
A career in real estate offers tremendous freedom, but requires an incredible amount of self-discipline as well. To be successful, you’ll need to thoughtfully manage your time, devoting quite a bit of energy to learning about the market and understanding all real estate terminology.
Learn how to do a market analysis, and stay on top of the laws governing your area, continually building on the basics you learned in preparation for the licensing exam.
6. The ongoing learning
After you’ve completed your initial licensing course (and nabbed that license), you’ll need real-world insights and deeper education that comes from becoming a graduate of the Realtor Institute (or getting your GRI designation, as Brian Adams recommends in another Inman article.
Broken into three four-day courses that cover finance, brokerage and marketing, the program lasts 12 days in total and runs about $325 per course, or $1,000 total. But the designation is for life (no annual dues) and will give you a solid foundation in elements of the business such as the Code of Ethics, contracts and good business practices that will be helpful in the real-life day-to-day of being an agent.
In addition to all of the work you do on your own, it’s important to remember that real estate is an industry that’s all about people. Don’t be afraid to ask for help, and embrace every opportunity to learn from and connect with others.
There is a lot of information to gather before entering the profession, and asking around among other agents and brokers is an essential part of getting started. Being a real estate agent is a very rewarding and fun place to be, and with the right attitude and preparation, you’ll always grow and learn.
Andrew S. Azzarello is a real estate broker at Better Homes and Gardens Real Estate Select. Connect with him on LinkedIn.