You live for the HGTV schedule. You physically cried when Tarek and Christina broke up on “Flip or Flop”, because you figured it would be the end of the show.
You love to figure out the square footage of friend’s houses. You calculate how much houses are worth by looking at the front of the property. Your friends are tired of you going on and on about houses, or condos, or apartments and how you could sell them for more than they were worth. You love people, and you love finding people a perfect place for them.
Ever thought of turning that natural passion into a business as a real estate agent?
Then this is the article for you!
In this guide on how to become a real estate agent, we’ll discuss the ins and outs of what it takes to:
And if you’re thinking about going into business for yourself, we’ve got you covered. We’ll walk you through all the steps involved in starting your own real estate brokerage, as well as how to find your first clients.
So grab a cup of coffee, settle in, and get ready to learn everything you need to know on how to become a real estate agent!
Having a natural passion for real estate is one thing - but is there anything else you need to qualify to become a real estate agent?
As it turns out, there are a few basic qualifications that can make it easier for you to learn how to become a real estate agent. These include:
In most states, you need to be at least 18 to become a licensed real estate agent. There are a few states where you do need to be 19, so it’s worth checking your state’s guidelines around licensure requirements.
We’ll make things easier for you - just head to Kaplan’s website (the makers of the real estate license exam) and check out this state-by-state guide to find your state’s specific licensing requirements.
You should be a legal US resident or citizen, as this is typically a requirement for your real estate license.
The prelicensure course is essentially your prep to take the real estate license exam. During this course, you’ll learn the ins and outs of being a real estate agent, as well as the specific laws and regulations surrounding real estate transactions in your specific state.
Here is an example of a particular state’s requirements for pre-licensing qualification. In Georgia, there are specific requirements for licensing of real estate agents. Georgia’s requirements are typical of many states’ requirements, although some of the states have less strict guidelines, while other states are more restrictive.
In Georgia, the first step of the pre-licensing process is that you are able to pass a background check. If you are able to do that, Georgia then requires 75 hours of real estate sales coursework, which means that you have to take classes in real estate sales.
In this state, you can take the classes online or from places which offer courses, such as technical colleges, two year and four year colleges, and community centers.
While there are a number of real estate courses you can take to prepare for your license exam, your best bet is to go with a recognized provider - like Kaplan - or to see if your local college offers approved real estate courses.
Be sure that you check out the school that is offering the coursework. Most states will not accept coursework from institutions that were not accredited, so make sure your coursework is coming from an institution that is accredited by the state. Each state has a list of accredited schools on their websites.
You want a school that is not only accredited, but that is student-focused with understandable content and has received good reviews from real-estate agents.
If you prefer to take online courses with a provider (like Kaplan, for example), check out this guide to see where you can sign up for prelicensure courses in your state.
Heads up: These courses can be pretty comprehensive and time-consuming, so make sure your schedule allows for your real estate education. Expect to spend anywhere from 10 to 30+ hours per week in your real estate course, depending on your school’s requirements and how quickly you want to progress towards getting your real estate license.
To find out more about your state’s real estate agent licensing requirements (as well as any other additional requirements on how to become a real estate agent), check out this state-by-state guide.
We’ll touch more on this later in the article, but you should be able to provide proof that you passed your real estate license exam. From there, you’ll be ready to start a real estate agency in your state.
Learning how to become a real estate agent isn’t something that just happens overnight; in fact, it takes a fair amount of time, education, and logistics to put yourself in the place where you’re ready to open a business.
But more importantly, the most important thing to becoming a real estate agent is a sense of passion and purpose. That’s because real estate agents are essentially their own business owners: they have to manage an office, or help to manage an office; they have to keep up with the paperwork that is volumes long, and can become unwieldy if not managed.
Real estate agents have to find potential clients, which means they have to continually connect with the community. Agents also have to work with buyers and sellers of homes, which means they have to be really good at time management.
If you are not sure about whether you want to become a real estate agent, try talking to people in the real estate game. Ask them questions about their day-to-day workload, and what kinds of activities they do in a typical day.
Ask them about the length of time they have worked in real estate, and whether or not they would recommend the career to a friend or a relative. If possible, ask if you can shadow the real estate agent for a day or two to see what a typical day looks like for them.
After you have shadowed an agent, it might be time to make a decision about whether or not you might want to take the steps you need to take in order to become an agent.
But if you still think you’re ready, then get ready - we’re about to dive into the exact steps you need to become a real estate agent!
After you complete any necessary coursework, you will need to take the real estate salesperson exam. Try and schedule your exam to happen as quickly as you can after you finish your coursework, while everything you learned is still fresh.
Most of the state real estate exams have 75 questions, and take about an hour and a half to complete. Several states offer test prep classes or courses free or for a small fee, so you may want to check and see if your state offers that option.
To register for the real estate licensure exam in your particular state, check your state’s real estate regulatory authority for additional information.
You can also google your state + “real estate salesperson exam” to find more information on how to register for your state’s exam.
Once you have passed the exam, you will need to find a real estate broker who can act as your mentor. You are called a real estate salesperson, not a real estate broker, which means that you can’t act as an independent agent yet. Instead, you have to work for someone under their sponsorship.
When you apply for your real estate license, they will also fill out some paperwork for you to turn in to the state.
When you are looking for a real estate broker to work with, as with any job, check out your potential boss and the agency. Look at reviews of the agency, and ask other real estate agencies to determine if this agency is the right fit for you.
If you want to move up the real estate ladder, and eventually become either a broker or a commercial real estate agent, you need to make sure that the agency you are thinking about will support you.
Here are a few additional tips on how to find the right real estate broker to mentor you:
Get a feel for who has the best reputation in your area. Ask other real estate agents or folks who have recently worked with different agencies for their opinions. Ideally, you’ll want to go with a broker who has a solid reputation in the field.
Find a brokerage that specializes in the type of real estate you’d like to sell. For example, if you have your heart set on selling waterfront properties, find a brokerage that has an extensive portfolio of real estate with a waterfront view.
Choose a real estate broker who has the time and admin support for newly minted real estate agents. Ask established real estate agents who’d they recommend, as they likely have feedback from their own experiences.
Work with a brokerage that has a reasonable commission package and can support you with marketing, admin, and more. After all, a generous commission package is great, but if you have to earn it by doing your own marketing, admin work, and more, it may not necessarily be the best arrangement.
Find a brokerage who will work with you the way you prefer, i.e., as an independent contractor or an employee. You may also want to ask what obligations come along with working with the brokerage (for example, will you owe your brokerage for marketing fees if you decide to leave early?)
Once you find the right brokerage for you, your state may require you to put in anywhere from three to five years of work before you can start your own real estate business.
That leads us to our next step...
If your goal is to learn how to become a real estate agent, you’re pretty much there. As a real estate salesperson, you can choose to work with one brokerage, or hop from broker to broker, working your way up the ladder.
If, however, you have your eye on starting your own real estate business, then you’ll want to check out what we’ve got in our next section!
If you find out that you like real estate, and you want to move up the real estate ladder, there are ways you can do that. First, you would want to move from a real estate salesperson to a real estate broker, which means not only could you work for yourself, but you could hire other people to work for you, which sounds like a good way to work up the ladder.
So are you ready to learn how to start your own real estate brokerage? Here are the 8 steps you should follow.
Some people are perfectly content being a real estate agent working with another brokerage. But if you’ve got that entrepreneurial itch, it’s worth looking into starting your own real estate business. While there’s undoubtedly more work involved in the process (we’ll talk about that in a bit), there are other payoffs too, like:
Starting a business in the real estate industry is a smart one, especially as the real estate market is estimated to be worth about $156.2 billion. Plus, despite a challenging 2020, market growth is expected to remain strong for the next five years.
All that means you stand a good chance of carving out a little slice of success for yourself - if you’re not starting a brokerage in a highly competitive area.
Before getting into business for yourself, get a better understanding of what the market looks like in your area. Ask yourself the following questions:
Getting a good sense for demand can help ensure you’re able to ramp up your real estate business quickly, rather than struggling to get clients.
Every real estate brokerage is different, so the costs to start up your real estate business may be different. However, it’s estimated that it may take at least $10,000 to start a real estate brokerage business, with the money going to expenses like
As you grow your real estate business, you can choose to invest money back into the brokerage. If you need capital now, check out our guide on how to apply for a small business loan.
Before you can become a full-fledged broker, you have to become an associate broker first, and continue to work under a licensed real estate broker.
To become an associate broker, you need to take an additional 60 hours of coursework. This coursework includes:
Lessons on advanced property law, property management and management of large, multi-family housing developments;
How to minimize risk with property investments, rental law and tenant-owner relationships, equal opportunity law, ethics and enforcement, mechanical liens and construction liens; and
How to spot property issues that might impact the sale of the property.
As with the real estate sales license, you also have to take an examination for the associate broker’s license as well. The exam has a few more questions, and takes a little longer than the sales examination, which makes sense because both the property law and financial aspects of property management become more complicated.
Some states give you the option of applying for a broker’s license three years after your sales license, while in other states, it is five years. You will need to check with your state to figure out the requirements. There will also be continuing education courses, just as there are with real estate sales.
If you want to really go for the gold, you can continue and get your broker’s license, which means you will then be able to own your own agency and manage other agents. It’s always nice to be your own boss, after all. As with the other licenses, states require coursework, an examination, and continuing education courses.
Specialization in property management also requires additional certification, so if you want to add that to your resume, you need to check with your state to see what you will need to do in order to get certification in property management, or in commercial sales.
Once you get your broker license - which you can find your state’s requirements by googling your state + “real estate broker license” - you may need to get additional licensing for your real estate business. For example, your state, city, or county may require you to get a business license.
Not sure how to get one? No worries; we’ve got you covered. Just check out our state-by-state guide on how to get a business license. Click on your state, follow the steps in the resulting article, and boom - you’re on your way to getting your business license!
From the moment you set up your new real estate business, you should get it covered with business insurance.
Here’s why: Business insurance is actually a term used to describe an umbrella of policies that a business owner - that’s you! - can get to protect their business.
From general liability insurance (which covers claims involving property damage and accidents) to professional liability insurance (which covers acts of negligence), business insurance plays an essential role in keeping your finances protected from costly claims.
And when we say costly, we mean it - the average customer injury or damage claim is $30,000!
Without business insurance, you’d have to pay out that claim from your business’s finances - or worse, your own personal finances.
Plus, even if you do everything right, you could still get sued by an upset client who’s convinced you did something wrong. In those cases, business insurance can come in handy by paying the costs of a lawyer to defend you against the claim (up to your policy limit).
As a real estate broker, you’re in a prime position to face a number of claims due to the nature of your work. After all, you’ll be working with plenty of clients - and with something as emotional as buying a home, it’s not unheard of for clients to bring claims against real estate agents and brokers.
Here’s an example to help drive that home: Let’s say you’re in a race to get your client’s bid in front of a seller. However, you had a family emergency that day, so you weren’t able to get their bid to the seller until later in the day.
Unfortunately, the seller decided to go with another home buyer’s offer - and your clients are not happy about it.
As a result, they decide to sue you, claiming that because you were negligent in submitting the offer on time, they were denied the opportunity to buy the house.
In a case like this one, your professional liability insurance policy would cover the costs of the claim, including any legal fees if you’re brought to court (up to your policy limit).
Safe to say, it’s a good idea for real estate professionals to have some kind of business insurance coverage in place. You can learn more about real estate business insurance here, or if you want to explore your options, try out our free online quote tool!
All you have to do is answer a few easy questions to get policy quotes from the nation’s top insurers. If you see something you like, just click to buy - it’s as simple as that!
And with policies starting as low as $29.95/month*, it’s never been more affordable to protect your new real estate business.
Get an affordable & customized policy in just minutes. So you can get back to what matters: Your business.Start Here >
Starting a small business is no picnic in the park - there’s a lot of moving parts that you’ll need to keep track of, plus you’ll need to start building your clientele as soon as you get started.
So how do you know if you’re moving in the right direction? How do you know what milestones mean you’re doing a good job, or which signals indicate you’re going off your path?
To help with those questions, it’s important to come up with a business plan. Think of your business plan as a blueprint for how you’ll approach growing your real estate business, as well as tracking the milestones that indicate that you’re on the right track.
A business plan can also be a useful document for showing investors, financial professionals, and other interested parties how you’re planning on growing your real estate business.
Building a business plan can be challenging. Luckily, we’ve made it easy for you. Check out our FREE downloadable business plan - just follow the prompts and you’ll be well on your way to building out your business plan in no time!
Want some help creating your best business plan? Download our FREE business plan template here!
The Bureau of Labor Statistics reports that the average salary for a real-estate agent is around $47,000 plus commissions. The average commission for a real estate agent is 3% per agent, or 6% overall.
There are times that real estate agents can earn more on commission, and there are also times real estate agents earn less, because commissions are to some extent negotiable.
While $47,000 is the average salary for real estate agents, some agents work on commission only. In addition, top producers who own their own real estate brokerage can earncan earn over $100,000 plus commissions.
Luxury real estate agents who have made a career out of selling multi million dollar houses, can make commissions in the millions.
Additionally, commercial property real estate agents can earn higher commissions.
The Bureau of Labor Statistics also noted that the growth rate for real estate agents is around 6% through 2026, which means that the job field is expected to grow as fast as the average job within the labor market.
However, you should know that real estate agent jobs rise and fall with the economy. When the economy is good, there are plenty of houses to sell and plentiful real estate jobs. When the economy is bad, the housing market stalls, and real estate jobs aren’t so plentiful.
So what does this all mean for you?
Simple: Take the average real estate commission in your area - you can start by using this calculator here - and use that data to strive toward your desired yearly salary.
For example, if you want to pay yourself a $50,000 annual salary and you’ve determined that you will charge a 3% commission on your real estate sales, you’ll need to sell a yearly portfolio that’s worth $1.75 million.
Keep in mind that this doesn’t include calculating business expenses - however, it can help give you a better idea of how much you may need to sell to make a certain salary in your area.
Starting out your own real estate business may mean starting your clientele base over from scratch, especially if the brokerage you used to work with kept your book of business (which happens!).
Fortunately, we’ve got the tips and tricks you need to start building up your clientele base. Just check out the Get Customers side of our blog to read through dozens of articles designed to help you get and keep clients.
And if you want to start reading now, check out the following articles that we recommend for real estate agents:
Each of the above articles can help guide you through a unique method for getting more clients, from online searches to word of mouth marketing.
And once you start building out your clientele base and are ready to take that next step, check out the Grow Your Business side of our blog. It’s full of advice and feedback on the different techniques you can use to take your real estate business to new heights.
Real estate agents are magicians. They are somehow magically able to sell houses, transform property, handle difficult clients, advise families of their options, and manage to somehow be in more than one place at one time? Not sure how they do it, either.
If you are thinking that this sounds like a great job choice for you, why not go to your state website, look up the requirements on learning how to become a real estate agent, and get moving? Real estate work can be a profitable way to maximize your skills, flexibility and strategy to work in your favor.
Who knows... maybe one day you’ll get your own show on HGTV!
* Monthly payment calculations (i) do not include initial premium down payment and (ii) may vary by state, insurance provider, and nature of your business. Averages based on January - December 2020 data of 10% of our total policies sold.
This content is for general, informational purposes only and is not intended to provide legal, tax, accounting, or financial advice. Please obtain expert advice from industry specific professionals who may better understand your business’s needs. Read our full disclaimer
28 November 2018 • 6-minute read
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*Harborway Insurance policies are underwritten by Spinnaker Insurance Company and reinsured by Munich Re, an A+ (Superior) rated insurance carrier by AM Best. Harborway Insurance is a brand name of Harborway Insurance Agency, LLC, a licensed insurance producer in all 50 states and the District of Columbia. California license #6004217.