How to Become a Real Estate Agent | Everything You Need to Know
If you are reading this, the real question you are probably asking yourself is “Should I become a real estate agent?”
People enter the real estate industry from all types of backgrounds, age groups, and for all sorts of reasons. There are teenagers who are still in high school, new college graduates looking to build a full-time career, people who already have a full-time job and want a secondary source of income, or retirees who are just looking for a hobby.
The truth is that anyone can get into real estate because it involves something that we all have in common: wanting to find a place that we can call home. And the only thing better than achieving your own dream is the satisfaction of helping others to obtain theirs.
In this blog post, we will give you a brief introduction about what it takes to get started in the real estate industry so you can determine if this is something that you want to do. We will go over what you need to know, and most importantly, what you actually need to know.
The Basics
If you want to work on anything related to the real estate industry, you need to obtain a license. This is needed because there are a lot of shady and unethical people out there and issuing a license allows the government to track an individual’s work history. For example, if a person is caught breaking the law, then the government can revoke a person’s license to prevent them from working in real estate in the future.
Because every state governs itself and makes its own laws, there is no such thing as a national real estate license. This means that all 50 US states have their own real estate commission to establish their own criteria for obtaining a real estate license. As you can imagine, there are similarities across states, so some states will have reciprocity with each other. If you are licensed in one state, a different state may grant you partial or full credit for having an existing real estate license. Reciprocity is not widespread among states, so it is usually the exception rather than the rule.
Each state not only set their own rules and regulations, they use their own terminology. Fortunately, they are the same in principle. Each state has two levels of real estate agents: people who own the company and the people who work for them.
Below are some examples of what they are called.
State
California
Florida
Texas
Washington
License Type #1
Salesperson
Sales Associate
Agent
Broker
License Type #2
Broker
Broker
Broker
Managing Broker
When you begin your real estate career, you begin on the first level-Type #1. Keep in mind that although you technically work for a company, you still operate as an independent contractor.
If you want to run your own company and get to the second level, all 50 US states require between 2 to 4 years of previous experience in the real estate industry. If you are an attorney, some states will exempt you from the experience requirement.
Getting Licensed
Every state has different requirements for each license and each level. However, all states generally have the same steps. To obtain the real estate license for Level #1, there are 3 basic steps:
- Complete real estate pre-licensing courses
- Pass the state exam
- Find a broker to work for
Generally speaking, most people can finish the whole process and get their license in about 2 to 3 months.
Let’s look at a few examples to see how the requirements can vary by state.
Course Requirements
State
California
Florida
Texas
Washington
Number of Courses
3
1
6
2
Total Course Hours
135
63
180
90
State Exam
State
California
Florida
Texas
Washington
Number of Exam Questions
150
100
80 National/ 30 State
130
Time (Hours)
3
2.5
3.5
3.5
Passing Score
70%
75%
70%
70%
License Fees
State
California
Florida
Texas
Washington
License Term (Years)
4
2
2
2
State Exam Fee
$60
$54
$36.75
$138.25
License Fee
$245
$89
$205
$146.25
Choosing a Real Estate School
If you haven’t done a Google search for a real estate school yet, you will soon discover there are an overwhelming number of schools to choose from. How do you decide on which one?
No one knows you better than yourself, so the answer is really up to you and your own preferring way of learning.
There are 3 formats to take these pre-licensing courses:
- Online Courses
- Video Webinars
- Classroom
Online Courses
The vast majority of people today get their license by taking online courses. This is the cheapest, most convenient, and typically the fastest way to complete the courses. This is essentially just like reading a book online. At the end of the chapters are multiple-choice quizzes and at the end of the course is a final exam. You can study from anywhere and at any time. Online schools will typically give you about 6 months of unlimited access to finish the courses. If you are working full-time or just have a busy schedule, this will be the best option for you.
All online schools have different levels of packages available. Their lowest (and cheapest) package just gives you the required prelicensing course. From there, they offer more expensive packages that add on study materials to prepare you for the state exam, such as practice test questions and instructor support.
For example, the biggest online school is Real Estate Express. Regardless of which state you are in, they have 4 different packages to choose from. Their Exam Preparation package gives you over 1,000 multiple-choice questions to prepare for the state exam and is backed with a money-back guarantee. That means if you do not pass the state exam, they will give you 100% of your money back. The Exam Preparation Plus package gives you the ability to interact with live instructors through the Instructor Q&A. The instructors are on a webcam, so you can see their faces as they answer your question.
If you want the best chance for success, you will want to go with their Ultimate Learning package. This includes everything in the other packages plus they will mail you copies of the hardcopy books, which makes studying a lot easier. What I really like about this package is that it not only helps you get licensed, but it also provides additional training for after you are licensed with the 90-day boot camp and 1-year Professional Development membership. You get access to hundreds of video tutorials and a video course led by real estate expert Sherri Johnson, who will teach you how to close your first deal within the first 90 days.
Video Webinars
If reading a book is not going to work for you and you need something more interactive, Kaplan Real Estate Education is the most trusted brand and one of the only schools that offer a webinar format. This is basically a video course that you can take from home where you watch an instructor teach the material. There are live webinars, which require you to login at specific times, and on-demand options that allow you to watch at any time of the day or night.
Classroom
If you are old school and want to sit in a classroom, you will have to check with your area to see which school is offering. There are no big real estate schools that offer live classes around the country. They are usually offered at small, “neighborhood” schools. While this does give you a more intimate and engaging setting, taking a live class is generally the most expensive option, doesn’t come with any money-back guarantees, and requires you to show up on time, every time.
How much does it cost?
The cost can vary widely depending on which state you are in, what format you choose, and how much exam prep and support you want. Online programs are the most popular and cost-effective route. You can get an idea by looking at some examples listed below.
State
California
Florida
Texas
Washington
Online Courses
$119 to $419
$117 to $399
$507 to $797
$189 to $404
Check Your State
Video Webinars
$399 to $749
Not Available
$429 to $1,089
Not Available
Check Your State
Classroom
$749 to $949
Not Available
$989 to $1,189
Not Available
Preparing for the State Exam
Most schools offer some kind of exam prep to study for the state exam. They are either in the form of a video course or multiple-choice practice test questions, just like what you will see on the actual exam. You will definitely need to get some exam prep to successfully pass the exam. A lot of people make the rookie mistake of thinking they can just study the material in the pre-license course. The problem is that the state exam is not testing you on that. Your pre-license course already came with its own final, so the state is not going to test you on the same material twice. The state exam deals more with real-world scenarios and testing your ability to put learned principles into practice.
The only way to study this is to practice with study materials specifically designed for that state exam. Don’t try to skimp on this just because you want to save a few bucks. Trust me. You will thank me later.
Finalize Your Application
Once you complete the courses and pass the state exam, you just need to finish your application with the state. Typically, this just means a quick criminal background check and sending them a check for the license fee. They will issue your real estate license to you after everything is done.
Finding a Broker
A lot of people have concerns about finding a broker. They think, “Why would someone hire me? I’m new, I just got my license, and I don’t know anything.”
This is irrelevant. This position is 100% commission-based, which means brokers are always trying to recruit new agents. In fact, some brokers will try to lure new candidates by offering to pay for their real estate courses. As a side note, I would advise against accepting an offer like this because there is always a catch. Typically, they will lock you into a contract at a low commission split or tack on additional hidden fees on your first commission check. Think about it. If the broker is so wonderful and great, why would they feel the need to lock you into a contract? Wouldn’t you want to stay there without one?
There are all types of brokers with their own strengths and weaknesses. You want to visit at least 3 to 5 brokers and pick the one that will set you up for long-term success.
When you interview with them, think of it as a 2-way street. You are there to interview them and see what they have to offer you. After all, you are the one who will be making them money.
As a new agent, you want to focus on finding a broker with a strong mentorship and training program. Try to absorb and learn as much as possible, especially in your first year. A good broker will help you develop your business plan and path to success.
For example, eXp Realty is a large, nationwide brokerage that offers its agents 25 hours of training per week, stock options, marketing materials, etc… If anything, they overwhelm you with too much information.
Keep in mind that you are not married to a broker for life. You can always quit and join a different one. You should not feel stressed about this part at all.
What to Expect in Your First Year
The first year is always going to be the hardest. You are new and still learning how the industry works. It takes the averages real estate agent 6 months to close their first deal. That means that you won’t be with a paycheck for at least 6 to 9 months. During this period, you may feel discouraged and be questioning your life decisions. Keep in mind, building a business takes time. I strongly recommended investing in a mentor if you can’t find one who will coach you for free. They will not only bring you up to speed faster, they will build your confidence.
Renewing Your License
As you get your real estate business is chugging along, you will need to renew your license every 2 to 4 years, depending on your state. Every state requires its agents to complete continuing education courses and pay a license renewal fee.
Some states also require post-license education on your first renewal. This is basically just an extension of the initial pre-license education. Instead of making you do it before you get licensed, they allow you to take this afterward.
Here are some examples of what the renewal requirements look like.
State
California
Florida
Texas
Washington
Post-License (Hours)
None
45
90
90
Continuing Education (Hours)
45
14
18
30
Final Thoughts
If you have been considering getting a real estate license, I would encourage you to do it. It doesn’t cost a lot and isn’t hard to get. As for the potential payoff? It could be the best decision of your life. Ryan Serhant was a broke, 24-year-old pursuing an acting career when he decided to spend a couple of hundred dollars to get licensed in New York. Today, his real estate team is ranked #1 in New York City, and he has a hit TV show on Bravo’s “Million Dollar Listing New York.”
Liked all the explanation. Thanks