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If you’re one of many who have been considering a change of career and are looking at real estate as an option, I’m sure you have a ton of questions about how easy (and costly) it is to get started in the real estate industry. You may even be debating if this career will be a good fit for your life.
First of all, let me share that I love this industry. I love how it has been a vehicle for so many people through the years to earn extraordinary livings while serving the people in their communities. For those willing to put in the work and the time, the sky really is the limit. I hope you’ll find that to be true for you as well.
Now, let’s talk about what a real estate license actually allows you to do. Legally sell, broker or rent real estate to prospective buyers, sellers and tenants on behalf of a real estate brokerage.
Thankfully, earning your real estate license is a relatively straightforward process, and the requirements to get your license are created to be accessible for the majority of people with various backgrounds, education levels and experience. You don’t need previous schooling, a college degree or even any experience in the field.
How do I get a real estate license?
You will need to complete all the requirements given by your state’s real estate commission. This typically involves an age requirement, pre-licensing education, and a successfully passed exam. Then you must apply to obtain your license.
Most states suggest (but don’t require) a real estate agent hopeful to have a sponsoring broker before taking the exam. However, before your license can be considered active, you will have to be working under a sponsoring broker. Don’t have one? You can still apply for an inactive license, but until you do find a brokerage, you will not be allowed to practice.
Related reading: Kaplan Real Estate Education – Online Real Estate License Classes
Related reading: Hubspot – How To Get a Real Estate License
Where do I take the exam?
Every state has designated cities and testing centers where you will be able to take your real estate exam. Some states will automatically schedule you for the state exam once you complete the coursework, but in other states, you will need to forward your course completion information to the state and schedule your exam. After you apply to take the exam, you will be given the testing center’s location and all other pertinent information related to your exam date.
- There is a fee to take the exam, which varies by state
- Most states require at least 70 percent to 75 percent to pass
- The exam will take several hours
- If you fail, most states allow you to retake it several times
- Bring photo ID
- Exam results will automatically be sent to the regulating body for your state.
Related reading: Practice Test Geeks – Real Estate License Practice Test
How long does it take to get my license?
Each state has its own licensing requirements, with anywhere from 40 to 150 hours of formal education and the time needed to study and write the licensing exam. Generally speaking, it can take between three to six months to acquire your real estate license.
If you commit to working on the courses full time (or in every spare moment), you could even complete the training in two to eight weeks. From that point, it could be anywhere from one to four weeks before you write your exam.
How much does it cost?
This is another question where the answer is dependent on where you take your real estate courses. They range in price from $300 to $1000, and the exam fees will usually range between $100 – $200.
There will be additional costs for your real estate license application (approximately $25), fingerprinting, and background check (around $100). There is also Errors and Omissions insurance, which is roughly $600, but is not required in some states (although it’s a very good idea to have it).
The number of hours required will also affect how much you pay and whether you do online courses vs. in-class training.
How much does a real estate agent make in a year?
As of 2020, the average pay for real estate agents in the United States was approximately $43,330, down from 2019’s average income of $49,700. This decline is chalked up to the lack of housing inventory and the growing number of real estate licenses being earned as people have found themselves changing careers due to a personal choice or layoffs.
The lowest 10 percent of earners made less than $25,000, while the highest 10 percent of earners made more than $112,000. Some of the top agents earned over $500,000 in 2020 and 2021.
Related Reading: The Balance – How Much do Real Estate Agents Earn?
Related Reading: National Association of REALTORS® – Quick Real Estate Statistics
TIP: To calculate the amount of money you could make from a single home sale, you need to know the amount of the sale and the rate of commission. For example, let’s say the commission is 6 percent, and the sale was for $300,000.
The commission would be $18,000, which is then split between the buyer’s and seller’s brokers, and your broker’s amount is split between you and your managing broker. The amounts will vary depending on the agreed-upon percentages with your broker.
Related reading: The Commission Breakdown: How Much Real Estate Agents Really Make
Do I have to do in-person training, or can I do it online?
Real estate prerequisite courses can be done in person, and many states offer the courses online. However, the majority of states will require you to write the exam in person through a third-party exam provider.
Do I need to have a brokerage or can I sell homes on my own?
In order to hold an active license in real estate, you must have a sponsoring broker and work out of a brokerage for a certain length of time, which varies from state to state. Each brokerage has its own rules and requirements for office involvement, continued training and commission structure, and essentially are there to oversee your work and answer questions as you gain experience.
The broker you choose to work with will depend greatly on your goals and needs as an agent. You will want to find one that will support those goals and most importantly, have a company culture that jives with your own personal belief system and personality. If you don’t believe in your brokerage, your potential clients won’t have faith in them either.
Related reading: InvestFourMore – Do Real Estate Agents Have to Work Under a Broker?
Do I have to renew my license? How often?
Yes, your real estate license must be renewed. The length of time between renewals is different in each state. Typically, it’s every two to four years. Many states dictate that agents must complete a certain number of course hours before you can renew.
Renewals are important so that agents can stay up to date on the latest real estate industry regulations and keep tabs on the national and local housingmarkets.Depending on your state, these course hours vary between 8 and 90 hours over the 2 to 4 years.
What’s the difference between a real estate agent license and a broker’s license?
Most states have two levels of licensing in the real estate industry. The lower tier is the “sales” tier or the real estate agent, and the upper level is the real estate broker, which requires a separate license.
Generally speaking, you must have at least two (if not more) years of real estate agent experience before getting your broker license. The broker designation allows you to build a team of your own and create your own brokerage, supervising and training agents who come on board.
Can you have a license in more than one state?
Absolutely. Each state has its own requirements for licensing that must be fulfilled, but before diving into course work, check to see if the state you want your second (or third) license in has a reciprocal agreement with your current state.
This agreement would allow you to skip over some parts of the licensing process. Depending on the state, you may only need to take courses and pass the state-specific portions of the licensing for that state.
Can I work real estate part-time or should I be full-time?
Yes. Many agents prefer to work part-time to give them flexibility in their current lifestyle or around certain commitments. Others start part-time while working a different job until they are successful enough to be able to pay the bills.
Whatever your reasons, find a broker willing to work with your part-time schedule, and consider your client’s typical availability on evenings and weekends to ensure that you have happy buyers and sellers.
Related reading: Making Your Real Estate Side Hustle Your Full-Time Career
What does a typical day look like for a real estate agent?
If you are looking for a career where no two days are the same, then real estate might be perfect for you. One day, you might be meeting with buyers and showing properties. The next, you’re calling leads and answering emails, preparing a Comparative Market Analysis for a potential seller, and scheduling a listing conversation.
The day after, you might be creating a marketing campaign for social media, then heading out to film a video tour of a neighborhood or local festival. No two days are ever the same, though the most successful agents are the ones that do their activities consistently and have conversations about real estate every single day.
Related reading: How to Become a Successful Real Estate Agent: Get Started.
Related reading: Real Estate Success Stories
Making the decision (or at least considering this option) to get into real estate will come with many questions and even more uncertainty. Can you really be a success? Yes. Can you really be a success sooner rather than later? Absolutely.
With an attitude of serving, not selling, connecting with people as human beings, and getting the training and skills necessary to help your amazing homeowners buy and sell homes, even brand-new agents can be successful.
Know that as you dive into this extraordinary opportunity – we are here for you. We love to help brand new agents get started out on the right foot, succeed with more ease, and start building their business the right way sooner rather than later. Contact us anytime for support and guidance.