Have you ever wondered who facilitates transactions (buying and selling) in the real estate sector? Or what factors account for massive increase or growth witnessed in this sector? Maybe you are interested in a job in the housing sector and don’t know which one is best for you?
The real estate sector has witnessed a steady increase in recent years, with more people taking an interest and risk to invest in one real property or another. This increase or growth has motivated the increase in the number of real estate agents to help in facilitating real estate transactions (buying and selling of real properties). As such, more people are gaining employment to work as real estate agent with real estate brokers.
The process of becoming a licensed professional in the real estate industry differs from country to country and state to state. Most states required real estate agents and brokers to acquire a certain number of hours of pre-licensing education and, in some, experience to become fully licensed. However, it's much quicker compare to most careers.
What is a Real Estate Agent?
If you have ever had to sell a house or buy one, you must have had an encounter with a real estate agent or what some commonly referred to as “middlemen”. A real estate agent is a professional or an individual who is licensed to represent buyers and/or sellers or to negotiate and arrange deals in a real estate transaction. Most estate agents work for a real estate broker or Realtor who has additional training and extra certifications. Negotiating and arranging a real estate transaction may include showing property, filling in contracts, listing agreements, real estate listings, and purchase contracts. Generally, real estate agents are licensed to operate under the supervision of a real estate broker. Real estate agents usually work completely on commission, thus, their income depends on their ability to assist clients and close deals.
Real estate agents perform different duties, which mostly depend on whether they work for the seller or the buyer. Real estate agents who work for the seller provide needed advice or information to clients on how to get a house ready for the market and on how to price the house. They are also expected to provide tips for last-minute improvements that can boost the price or encourage a speedy sale. On the other hand, real ester agents who work for the seller help them market the property through advertisements, networking and real estate listings services. Agents who work for the buyer search for available properties that match the buyer’s wish list and price range. These agents often look at past sale data to help prospective buyers determine a fair offer for a particular property.
Reasons to Become a Real Estate Agent
There are many good reasons why people put all the effort to get the license to become a professional real estate agent or real estate broker. These reasons include the ability to:
Control how much money you earn
Choose when you would like to work
Not have to work under a boss
Help people find their dream homes
The procedure to become a licensed professional real estate agent may be broken down into four Steps.
A – Getting Qualified
In order to get qualified, you have to determine or identify the general requirements for becoming a real estate agent in your country or state. While there is an exam, you'll have to pass that may differ in every state, there are general basic requirements that every applicant is expected fulfil to be allowed to sit for an exam or work as a licensed real estate agent which are the same for all states. These require that you:
Be a US citizen.
Be at least 18 or 19 years of age.
Have completed the total number of the required pre-license education hours
A college degree in most states is also a pre-requisite to be considered. You generally, you don't need a degree from a four-year university. However, it's important to know that because university degrees are becoming the bases for most employment positions, it will be a good idea to have one to cover your bases. Agents with degrees are regarded a bit higher and thus, may have more opportunities for advancement.
Some schools allow you to major in real estate, which provide you with a solid foundation on your way to becoming a real estate broker. If you don't want to major, you could take a few classes and see if the state waives the classes it normally would require you to take.
It's a good idea will be to have sound knowledge of law, business, economics, and marketing. To succeed as an agent or in the real estate field (sector), this is a good starting point to learn what you're going to be dealing with.
Sign up for classes
Every state has a webpage dedicated to which schools have accredited real estate programs with most of these classes being at the college level. Once you find a suitable school in your area, contact them for more information especially on their timetable. Classes should regularly be offered.
At the end of these courses, you'll be handed a transcript to enable you apply for a license, so good grades counts. The better you do with the courses, will also reflect on the exam. While it’s basically a pass/fail exam, the more confident you are in your abilities, the better you'll perform overall.
Most states required somewhere between 60 and 200 hours of course work, depending on your locale, to allow you to sit for the exam.
As an agent, each workday, you’ll spent making contacts with people (clients), prospecting, and simply getting your name or yourself in front of others. You will principally be working for yourself, which means taking care of all your own advertising, your lead generation, your office management, education, scheduling, and paperwork. This is typically your own business to manage and grow.
This is not a hobby. Hobbies can be put down and picked back at will. In order to stay viable as an agent, you have to be constantly working, making connections, meeting new clients (leads) and closing deals.
The real Estate sector provides a career that has unlimited potential for income (meaning you could make a lot if you work hard, or only a little if you don't), very flexible schedule (you can fix or adjust your schedule mostly to accommodate those of your clients) and the chance to make a difference with many people.
Set aside some finance
The start of any job or business is often regarded as an uphill battle, especially for commission-based jobs. It’s often difficult to lay hands on any income at the beginning when your foot is still dangling on the ground. For this reason, it's important to have some money saved up to get you through those rainy days. Your mom or dad must have told you that "it takes money to make money,"
Your first few months will mainly be taken to build up your clientele and get a feel for the market and for your niche. This is a necessary evil that every new agent goes through.
B – Pass the Licensing Exam
Take your state's exam
As with most states, you are required to sit and pass the licensing exam to be qualified as a real estate agent. You will have to apply to take this exam. Most applications, including that for your real estate license can be accomplished online. You can find the fee real estate listings and the forms on your state real estate commission's website. Once you fill out all the necessary information, submit it and everything's accepted, you'll get a notice of when, where and how to take your licensing exam.
Provide your fingerprints and pass the background check
One important aspect of receiving real estate licensure is passing a complete background check. This check also comes with a fee which is often paid together as part of your application fee. Once you complete your application, you are given an entity number (known as your application number); you can then book an appointment to get printed. This process and all other paperwork can be done through the testing company.
Note that, you will not be given your license if you fail to provide your fingerprint. This is also true for renewal, so it's important to keep a clean record.
Register for the exam
After, you must have successfully completed all the paperwork; you'll be notified of how to register for your exam and the details that follow. This is also done online. You’ll be required to login to the site with your application number (provided after you apply for your license), pick a date, time, and location and be good to go. And depending on your state, you will be allowed access to some study material and study tips.
Most licenses are only valid for your state. However, some states do have reciprocity agreements by which they've agreed that certain other state licenses are valid in their state. Make sure to verify where yours is valid before you go about moving or working across state lines.
Prepare for your exam
We are all used to writing exams, but it’s also true that each exam has its own set of rules and technique to prepare and pass it. Thus, if it's been a while since you last take your classes, it's best to brush up. You should be provided with some study materials at the beginning of your application process (usually referred to as the Candidate Information Brochure or Booklet), but also do some research on your own time.
If possible, talk to a few other people who have passed your state's exam. What areas did it focus on? Is there anything you can breeze over? How long did it last? What do they wish they would've known? What was it like?
Make sure to complete the background check requirements and submit fingerprintsprior to testing. This can negatively affect the time it will take to process and receive your license.
Pass the exam with flying colors
On the chosen date of the exam (which is computer based), and at the testing center or location, you will be provided with a computer and be expected to answer a series of questions.
You will also be automatically provided with your exam score just after the end of the exam. If, you promise to be who you say you are, you will be sure to have made it with flying colors and be home free.
This doesn't quite make you a real estate agent, but provide you with the necessary professional license to allow you to freely carry out your job. You have to be working with a real estate broker to make you a real estate agent. Right now you hold an inactive real estate license and as soon as you get employment or a "sponsor", you can then file to get your license moved to active status
C – Starting Your Real Estate Agent Career
Know your market before youget started
You will be operating in a sector and in an area you may have no idea about. It’s best to start by identifying your niche market, and its potential. Every place is a bit different, so make an endeavor to go around the area you plan on working and watch the agents. You'll be way far better off getting your career on the ground running. Every market is a bit different and exposing yourself right away is the best thing you can do for yourself and your career.
Be desirable to brokers
Almost every real estate broker is looking for a business plan, personality, and the right skill set. They want to be sure that you are what the real estate says you should, knowing what you're getting into and be able to deliver objectives (it can be a lot of work though) and that their goals and demands meet what you plan to accomplish.
Go around your niche and talk to real estate brokers and other agents. Find out what they’re looking for and their goals. While they want you to be what they want, you also want them to be what you want, to be able to meet your goals in your career.
Choose your broker wisely
A broker is typically the umbrella real estate companies you will be working under (not until you become one) thus, it’s crucial to choose wisely and to choose the right broker. Remember that you are going to be working with your broker for the rest of your working life, thus, you need one you can comfortably work with, but also makes you look good. Where are you going to "hang" your license?
You will want real estate companies with established reputations and name. One that has the people’ trust. You'll need to gain trust and credibility, and also be noticed before anything and these can easily be achieved with a solid broker behind you.
Is this to say you should go for the big guys? NO! The big agencies often take a higher cut of your commission. There are other small real estate companies with good names, good reputation, and a better or lower cut of commission you can always work with. Just because a company is international doesn't mean you shouldn't work for any Hometown Realty.
Make sure your broker is available. You'll probably have loads of questions at the beginning. Working for a broker that doesn't give you the time of day will leave you wandering around aimless, losing steam and losing focus. And leave you in sticky situations!
Activate that license of yours
Once you gain an employment through a broker, you immediately start your career as a real estate agent. Generally, your broker can mail in your new status or somehow alert your state's real estate commission, and you can go straight to practicing.
Also, depending on your state, your active license will be valid for anywhere from 2 to 4 years. You'll be expected to get it renewed when it expires if you want to continue working.
Get a mentor
Some real estate companies will give you veritable training wheels. They may even hand you some of their clients in return for a percentage of your sales.
A mentor is also useful to align you to your path to success and help you have accurate expectations.
Whether or not your mentor hooks you up with clients, it's great to have a person that can hold your hands and show you the ropes. There's always more to the market and experience is an invaluable tool. Thus, having someone that can introduce strategy into the equation is an all gain equation.
Use your own personal network. You will most probably start with the people you know first (your family and friends and move to friends of friends). You will be asking them questions like; do you want to move or know anybody who is about to? Remember that the more people you meet a day with these questions, the higher the chance of you getting someone who is trying to get or sell a new house.
Market yourself. Your first goal will be for people to get to know you as a credible agent and be able to contact you even afterward. Thus, you will need to make and distribute putting ads in papers, business cards, anything read-able, magazines, bribing Google, putting your face on bus stop benches and billboards and pretty much doing anything you can to seem credible.
D – Moving up the Ladder
Your name and face are not only representing you, but also the broker agency you work for. That way you must work to reliably represent yourself and your broker. You'll lose clients faster than you ever imagine if you are not reliable. Work your hardest. Reliability is a long term investment, so work it out.
With real estate, you may never have repeat customers, but if you are credible and hardworking enough, trying to satisfy all your clients and making your relationships with them comfortable, you are sure to have many referred customers. You have to be so good they not only had a good experience working with you, but it was so good they're confident enough to tell their friends.
Work with both buyers and sellers
You will always meet two types of people: buyers and sellers. Working with both will be the best way to maximize your list of clients. This is probably the best way to close more deals and earn more commission for you.
Become a member of NAR
If you have a dream to move up your professional life in the real sector, you should plan on becoming a National Association of Realtors (NAR) member.This simply means you are working with a broker who's affiliated with NAR, paying dues, and attending a certain number of meetings a month. That’s just all. In return, you'll get the status of Realtor, which will give you an air of trustworthiness and professionalism to tote behind your name.
Become a broker
You won’t want to spend all your career working under somebody. You should therefore be aiming at being a boss who controls the agents or become a broker. To do this, you'll need some years' experience as an agent and then you can start working your way up towards the next licensed level.
Generally, this requires some sort of degree. You may, at the very minimum, need additional classroom training and examination similar to the kind you got to become an agent.
Working as a real estate agent will require you to earn commissions which are split between you and your broker. You should be aware of how commissions are split. The standard sales commission in most states (including New York State) is 6%. In most deals, you will have the 6% commission split 50/50 between the seller’s broker and the buyer’s broker. You as the agent will then split the remaining commission to your sponsoring broker. However, the percentage you get would depend on the agreement you have with the broker.
Commissions may be split 50/50 between the broker and the estate agent, but some brokers may start you off at a 40/60 split and allow you to gradually earn a higher percentage after closing a certain number of deals.
Some brokers may give you a 70/30 split from the beginning as an incentive to work under them.
There are even brokers who offer 100% commissions, meaning they don’t take a percentage of your deals, but require you to pay a monthly fee to work under them.
Becoming a real estate agent may require you to obtain a professional license, but making it as an agent will probably be a matter of hard work, credibility and trust. You’ll probably need a mentor and a broker who align with your goals. Ultimately, you need to find a broker that aligns with your goals as a salesperson. Moving up your professional line is simply a matter of experience, becoming a NAR member and some other certifications. In the nutshell, a real estate agent has the power to determine his pay package at the end of each month, which in most cases is proportional the number of deals he is able to closed per month.