Is real estate a good career path for you?

People go into real estate for many different reasons. Some are attracted by the ability to work independently. Others enjoy the challenge of negotiating deals and crafting contracts. Still others love homes and home design and enjoy the process of helping clients find (or create) their dream homes. Determining whether real estate is a good career path means figuring out what your motivations are and how they can be put to work within the context of a real estate business.

Whatever your reasons for launching a career in real estate, it’s vitally important to go into the profession with a realistic understanding of the challenges it presents. While reality TV may make the real estate industry seem glamorous, successful agents put in a tremendous amount of time and effort to build their businesses. Find out what it takes to achieve top producer status and decide whether you’re ready to build your real estate career.

What is the job outlook for real estate agents?

Real estate agent demand is highly variable, depending in large part on the real estate market and the overall economy. During active markets, like the one that stretched throughout most of the COVID-19 pandemic, many people seek out opportunities to get into real estate. During down times in the market, like those that followed the 2008 mortgage crisis, many agents leave the industry.

According to membership statistics compiled by the National Association of Realtors (NAR), the average real estate agent is a 56-year-old woman who is college educated. As of October 2022, there were more than 1.6 million NAR members in the United States, a record-high number for the industry. 

However, this does not mean that the market for real estate agents is saturated. There are always opportunities for savvy agents and those who are able to generate leads. In addition, agents specializing in specific niches and new markets may be able to create demand where it didn’t exist previously.

Is real estate a difficult career to get into?

Unlike many professional roles, becoming a real estate agent does not require a college degree or advanced academic study. Training programs for the initial licensing test vary from in-person classroom experiences to at-home online studies. This low barrier to entry makes it appealing for those who are career switchers or retirees seeking a second career.

Once they’re licensed, the new agent will need to be affiliated with a brokerage so that they can be working under the supervision of a real estate broker. The new licensee can seek out a brokerage prior to licensure so that they will be ready to hit the ground running once they have passed the licensing test and completed any other requirements.

The difference between a newly licensed agent and one who is able to make the job work long-term is, of course, clients. In many cases, an agent who is planning to operate individually will be responsible for their own lead generation. However, some brokers provide leads to their agents or maintain a mentoring program that pairs new agents with veterans. This may create opportunities for co-listing so that new real estate agents can learn the ropes with the help of a colleague.

Teams are another popular option for new agents who don’t have enough leads to operate independently. Many teams provide leads to their junior agents, helping them to gain experience and build their own pipeline over time while working as a member of the team.

Pros and cons of being a real estate agent

Like any job, being a real estate agent comes with its share of perks and frustrations. Here are some of the pros and cons of working as an agent:

Schedule flexibility

One of the things that many agents value is the ability to set their own hours. This is often especially appealing for those who are working around the demands of family schedules or for those who are dual-career agents.

Agents will need to balance the flexibility of their schedules with the demands of clients. For example, much of an agent’s activity will take place on the weekends or in the evening, when buyers and sellers are available to meet. An agent who wants a 9 to 5 type of work schedule will probably struggle with the demands of growing a real estate business.

Real estate agent income and earnings

The sky is the limit when it comes to real estate agent pay. That’s because the potential for a high-flying career has been demonstrated by many developers, luxury brokers and others who started out as agents, then leveraged their knowledge and the connections they developed into a higher level of success and compensation.

The thing to remember, however, is that there are many more agents who go into their real estate career with unrealistic expectations and end up leaving within months. This happens when new agents are unprepared for the challenges of launching a real estate business. When Job One is lead generation, those without the ability to find clients may struggle to establish themselves.

In order to create the best possible chance of success, agents should consider the following hedges against earnings-related struggles:

• Set aside several months’ worth of income before beginning a career in real estate. This will provide a cushion during the time that you’re waiting for that first commission check.
• Remember that as independent contractors, taxes and benefits are the agent’s responsibility. Make sure that you’re setting aside enough money to pay for these out of pocket.
• Make sure that you have a solid idea of how much you’ll have to spend on marketing, brokerage, MLS and association fees, and other startup expenses.
• Consider holding onto a side gig during the first months as an agent to supplement income from real estate and be careful not to initiate excessive upfront expenses without a solid return on your investment.

Being your own boss

In the vast majority of brokerages, real estate agents are classified as independent contractors rather than employees. That means that, while a real estate agent is aligned with and managed by a supervising agent, they have the freedom to build their own business.

For those with an entrepreneurial bent, this makes real estate a great option since it provides a framework within which to operate along with the freedom they’re seeking. However, for those who need the security of a regular paycheck, being a real estate agent may be intimidating, at least until they are firmly established.

New agents who don’t have experience as business owners should consult an attorney and/or a financial advisor to initiate tax planning and to determine what type of business structure (LLC, S-Corp, C-Corp) is most appropriate for their real estate business.

Real estate agent career FAQs

For those who are considering real estate as a career path, there are many things to consider. It’s a good idea to ask questions upfront and think through various aspects of establishing and growing a real estate business before launch. Here are some common questions to consider:

What is the highest-paying job in real estate?

There are many ways in which real estate agents can parlay their expertise into high-paying paths. Often, these involve investment in and development of residential or commercial properties. This may require significant capital investment or partnership with a source of significant financing.

Real estate agents looking to grow their careers within the context of client service can explore the path of real estate broker and independent or franchise brokerage ownership. If this is something you’re interested in, be aware that most states require at least two or three years of experience as an agent before taking the broker licensure exam.

Does my real estate license need to be renewed?

Yes, a real estate license generally requires annual renewal. This involves both a continuing education requirement and the payment of a renewal fee. In some states, the new agent is also required to complete post-licensure educational requirements within their first few months in order to keep their license.

Educational requirements can often be satisfied through training at the local Realtors’ association or through online continuing education opportunities. In some cases, a new certification or designation provides both a marketing boost and the credit needed to qualify for license renewal.

Can I use my real estate license in other states?

While an agent is initially licensed in only one state, many states have reciprocity agreements with neighboring states. These agreements allow licensed agents from cooperating states to sit for a neighboring state’s exam with only minimal additional hours of licensure education.

In addition, some agents who work frequently with clients in another market may seek dual licensure, fully completing the educational requirement for another state in order to practice there. For example, because there is a great deal of movement between New York and Florida, many agents hold licenses in both states even though there is not a reciprocity agreement between the two.

Is real estate the right career for you?

Those who succeed in real estate do so because they have a plan and are willing to implement it day in and day out. Determining whether real estate is right for you comes down to taking a realistic look at both the challenges and opportunities that come from a career in the industry and a willingness to meet them head-on. If you’re willing to put in the time and effort, you may just find that real estate is the perfect path for you.