“Should I get my real estate license? How do I find out how to become a real estate agent?”
These are among the most frequently asked questions on the BiggerPockets Forums. While having a license isn’t a prerequisite to investing in real estate, it can be a HUGE help. From not having to wait for someone else to schedule showings to MLS access and all the resources and information that come along with it, learning how to become a real estate agent and having a license can greatly benefit your real estate investing.
But learning how to become a real estate agent and beginning to practice as one isn’t a matter of simply declaring your intent, and then *POOF!* you’re an agent. There’s a lot more involved than that, especially if you’re just starting out.
Every one of our 50 states (plus Washington DC) has their own rules for becoming a real estate agent. Each state requires a different amount of education, from as little as 40 hours in Indiana all the way up to 168 hours in Colorado. Because of this, it’s important to study your locale to learn its specific process for how to become a real estate agent.
Most states offer reciprocity, meaning once you have held a license in one state for a certain amount of time (typically two years), you may apply to another state and get a license there by taking only the state-specific portion of the classes and passing the state test.
All states require you to be at least 18 years old – you aren’t legally allowed to sign documents and contracts under age 18 – with three states calling for a minimum age of 19 and Illinois requires you to be 21. Some require high school graduation while others allow you to become licensed after 10th grade.
Since there are so many different requirements for how to become a real estate agent, we set up this page to give you an overview on how to become a real estate agent for each state.
How to Purchase Real Estate With No (or Low) Money!
One of the biggest struggles that many new investors have is in coming up with the money to purchase their first real estate properties. Well, BiggerPockets can help with that too. The Book on Investing in Real Estate with No (and Low) Money Down can give you the tools you need to get started in real estate, even if you don’t have tons of cash lying around.
How to Become a Real Estate Agent
While every state has their own regulations for how to become a real estate agent, they all require education and testing.
In learning how to become a real estate agent, you’ll find that every state requires real estate coursework, which covers state-specific laws for how to become a real estate agent, as well as national laws that apply to all states.
(See the link above for your state’s classroom requirements and to learn more about how to become a real estate agent in your area.)
I’m licensed in the state of Colorado, which has the highest education requirement of any state for becoming a real estate at 168 hours of instruction before you can sit for the test. Those 168 hours include:
- 48 hours of Colorado-specific regulations and contracts
- 48 hours of real estate law
- 8 hours of trust accounts and record-keeping
- 8 hours of current legal issues
- 24 hours of real estate closings
- 32 hours of practical applications
Choose Your School
Courses are typically offered either in a physical classroom or online. When looking into how to become a real estate agent, I chose to take my classes online. At the time I took them, I was a stay-at-home-mom, and my youngest child was 3. Sticking to a set schedule in a physical classroom didn’t work for my family and me. I studied mainly on the weekends, and it took me 3 months to complete my coursework, with an additional month of taking and re-taking the practice tests that were included with my tuition. I wanted to pass my test the first time and wanted to make sure I knew everything backwards and forwards.
Not everyone learns the same way, and online classes may not be right for you. Because I took classes online, there was no way to ask questions on the spot. I had email support, but since I was doing the bulk of my studying at night and on the weekends, it took a couple of days to get my email answered. Be sure to check out the options in your area when figuring out the process for how to become a real estate agent.
Local community colleges offer real estate coursework in the physical classroom setting, and if you have a question or need clarification, you can ask right then and there. But you are bound to their schedule and missing a day can be a huge loss.
Whether online or in person, these classroom hours are designed to teach you how to become a real estate agent by covering the legal basics of buying and selling real estate. While they do teach you the basics for becoming a real estate agent, it turns out that much of the work you perform as an agent on a day to day basis isn’t taught in the schools. While you may complete all the steps for how to become a real estate agent, your true education comes after you pass your courses and tests and start working as an agent.
I’m really happy with the online school I chose. Not only did I learn what I needed to pass the test for becoming a real estate agent, but they offered numerous practice tests to make sure you really knew the coursework. The practice tests could be taken over and over, and they reviewed everything in depth.
Decide on a Brokerage
While you are taking your coursework and learning how to become a real estate agent, you should be looking around for a brokerage to work for after you are licensed. With the exception of attorneys, all newly-licensed agents must hang their license under a more experienced agent — called a broker or employing broker — for a period of time, typically 2-3 years.
The employing broker is responsible for your actions during your first few years of becoming a real estate agent. Your broker will review all your documents before you pass them along to clients to check for errors and omissions. There are so many nuances to learning how to become an agent and acting an agent, and filling out a contract wrong can have huge consequences. My managing broker has told me of several newly licensed agents who had to buy appliances for their client, or replace this or that out of their own pocket because they didn’t fill out the contract properly.
How do you decide which brokerage is right for you?
There are many different brokerage philosophies, so start thinking about what’s most important to you. Some brokerages are known for offering significant training for their new agents. Others cater to established agents, while some smaller firms may be more receptive to investor-agents. There are flat-fee firms, where you pay one flat fee per transaction, which is typically a low fee but comes without a lot of the education opportunities that are available at other agencies.
Traditional, national-brand brokerage firms will typically have a large initial commission split. A split of 50-50 is not uncommon and translates into 50% of your commission going to your employing broker until you hit a certain level of sales. As your sales increase, your commission split decreases, with top agents paying as low as 5-10% of their commission to their employing broker. The benefit of working for a large brokerage firm is name recognition.
Once you decide what type of real estate you wish to practice, ask your instructor for recommendations that fit your goals. An established educator has taught thousands of students how to become a real estate agent, has a good grasp of what is going on in your local area and can recommend a few different brokerage firms to interview.
Another thing to remember while you are searching for a broker is that you are the one doing the interviewing, not the other way around. Talk to the broker, and ask as many questions as possible in your initial interview. Ask about continuing education, errors and omissions insurance, commission splits, how soon do you get paid after a deal closes, how much time is available for mentoring, what a typical day is like, whether they require floor hours, whether you get a desk, what exactly they do provide and what you are responsible for.
After passing the courses on how to become a real estate agent, you take two exams — one state-specific and one national exam — to prove your knowledge. Most states allow up to a year to take the test after you have finished your coursework.
The test questions are designed to really test how well you have absorbed the information — they are worded with twists and turns and must be read very carefully. Some questions are looking for the best answer; they have more than one answer that could be right.
The latest statistics for my home state of Colorado show a 62% pass rate. Like I said, the questions are designed to trip you up, so study, study, study. My education provider offered practice tests and suggested taking them multiple times after you have finished and passed the coursework. I followed their advice and took each practice test about 10 times. I was surprised at how closely the practice test followed the actual exam.
At the exam facility, you are not allowed to bring anything with you other than a government-issued ID and proof that you have taken and passed the required coursework. No purses, no phones, no calculators, nothing. Check with your testing facility to make sure you bring only what you need — many don’t offer a place for you to store your things.
Aim to arrive at least 15 minutes before the start of your exam, and allow plenty of time to get there. My exam center had a zero tolerance late policy. If you were late, you forfeited your exam fees and were denied admittance. If you didn’t bring the proper paperwork with you, same thing. Plus, my state had a waiting list to take the exam. Being late would have cost me weeks in delays.
I’m starting to sound like a broken record, but each state has their own rules for getting a license and most require a background check. Be sure to check into your area for specific steps on how to become a real estate agent. My state offered two different ways to collect fingerprints and submit them. I could go to a participating police station and get fingerprinted using ink and paper — just like a real criminal! Or I could go to the testing facility and be fingerprinted electronically. (I chose the less expensive criminal experience.)
Agents are trusted with the keys to a home and all the possessions inside. The Real Estate Commission wants to make sure you are a trustworthy individual before allowing you to complete the process of becoming a real estate agent. If you have been convicted of a felony or pled no contest to a felony, misdemeanor or petty-theft offense, your chances of getting a license are significantly diminished.
Recent felony convictions for things related to showing houses, such as theft or embezzlement, are automatic disqualifiers. Felony convictions not related to selling homes and fiduciary responsibility may be allowed, but you must petition the real estate commission for approval. It’s best to do this before you take the coursework and discover your past indiscretions make you ineligible. Be sure to learn the restrictions for how to become a real estate agent in your area.
Once You Pass Your Real Estate Exam
Once you have passed your real estate exam, you must submit the application for your license. Your application will require proof that you passed your coursework, proof that you passed your tests, ask you to answer various questions, and in many states, require your employing broker to sign the application form and provide proof of Errors & Omissions Insurance. Don’t forget the application fee. If the Real Estate Commission has waived any past felony convictions, those waivers should also be submitted with your application.
Remember that background check you sent fingerprints in for? It will be submitted to the Real Estate Commission once it’s completed, which may happen before you finish your coursework and submit your application. The Commission stores each portion of the application until all parts have been received. They’ll match them together and then review the entire application. My state takes a week or two once all sections have been matched up. Again, the process for how to become a real estate agent may differ in your area, so be sure to check out the specifics.
After my application was approved, the Real Estate Commission notified my employing broker, who in turn informed me. It took about a week to receive my official license, but they emailed my license number right away so I could get started with all the other setup I needed.
If you don’t choose an employing broker, your license becomes approved but inactive until you have an employing broker.
How to Become a REALTOR®
Learning how to become a Realtor and how to become real estate agent: it’s all the same thing, right? Nope. It’s kind of like Kleenex or Band-Aids. Those are both name-brand items that are so well-known, the name is also the thing. People routinely ask for a “Band-Aid” when they mean “bandage.” “Tissue” and “Kleenex” are interchanged all the time.
When this happens, the trademark has become generalized. No big deal, right? Nope, it can be a very big deal. When a company trademarks a name and then does not vigorously defend their trademark, it becomes watered down, and they can lose their trademark status and all the legal protections that go along with it.
A Realtor is not the same thing as a real estate agent. Every Realtor is a real estate agent, but not every agent is a Realtor. The word REALTOR® is a federally registered collective membership mark that identifies a real estate professional who is member of the NATIONAL ASSOCIATION OF REALTORS® and subscribes to its strict Code of Ethics. Only members of NAR can call themselves Realtors.
So how to become a Realtor? It goes beyond how to become a real estate agent. To become a Realtor, you must join the association and pay dues to your local, state and national organizations. There is a 4-hour code of ethics class that must be completed and upheld. Agents who are not members of NAR are not held to these ethics.
How to Become a SUCCESSFUL Real Estate Agent
When learning how to become a real estate agent, it’s important to focus on the next step: not only learning now to become a real estate agent, but how to be a successful agent. The most successful real estate agents treat being an agent like they are running their own small business. And just like any other small business, you get out of it what you put into it. Successful real estate agents work hard — they’re always hustling.
Unless you have another source of income, your first couple of years are going to be very lean. There isn’t a huge barrier to entry; it’s fairly easy to get your real estate license. And non-agents have this idea that being a real estate agent is just listing a house on the MLS, then sitting back and collecting a fat check. Those two factors combine to create a LOT of people passing the test and becoming real estate agents every year.
Lots of agents means lots of competition. Think of all the people you know. Can you name at least one that is a real estate agent? Even before I had my license, I knew four people in my immediate area who were licensed real estate agents.
So how do you succeed when everyone else is trying to do the same thing you do? You hustle. You advertise, you promote yourself, you learn your market and you provide value to your clients.
Think about your current job. Did your boss approach you randomly and ask if you were looking for that position? No, because that’s not how the real world works. When you wanted a new job, you told them you were looking. You did this by sending them a resume or filling out an application for the job.
The same thing holds true with being a real estate agent. Unless you have a name tag on, nobody is going to assume you’re an agent. No one is going to ask you out of the blue, just hoping you’ll say yes. You have to tell them. How? Advertising.
Think of all the different ways you see agents advertising themselves. There are clever ways, like putting two 9-volt batteries into a clear plastic bag with a brochure about yourself and hanging them on every door in a neighborhood around the daylight savings time change. Or going to the closest dog park, armed with treats (and a business card) slipped into doggie-doo bags and passing them out to everyone there. Taking an interest in someone’s dog can endear you to them.
There are also the traditional ways of advertising: newspaper ads, direct mail postcards and billboards.
Want to work with investors? Go to them. Attend local meetups and REI club gatherings. Go where the investors go and get your name out there. Know how to analyze a property and be ready to discuss your unique ways of finding deals.
The point is to get your name out there and start telling the world that you can help them buy or sell their home.
Grab a Name Tag
During my online real estate classes, there were videos interspersed with the text. Sometimes the video was an instructor reading a particularly important piece of information, but others were more like testimonials. One particularly great piece of advice came from an agent who sells between 10 and 15 homes every month consistently. He said his top tip was to get a name tag and wear it everywhere you go.
When he first started out, he wanted to appear professional. He had a good quality name tag made that had his name and the title of “Real Estate Agent” underneath. He put it on, and someone commented on it. He handed them a card. A short while later, someone else commented on it and he handed them a card. Lather, rinse, repeat.
He now considers it part of his wardrobe, like a watch. He doesn’t go anywhere without it, and he is always stocked up on business cards, too. Anytime anyone asks about his name tag or being a real estate agent, he hands them a card and chats them up. Total investment? $25.
Host an Open House
Experienced agents want to offer open houses to their clients, who have come to expect them. However, they don’t really want to host them. New agents are eager to gain clients, but don’t have any. Enter the partnership.
Here’s a bit of information you may not know — a home only sells during an open house about 4-10% of the time. That’s it. An open house doesn’t really sell your home. It’s a marketing tool that agents use to find new clients. As a newer agent, offer to host an open house for any agent in your office.
During the open house, have a pen and paper ready to take names and contact information for people who come by. There are also a variety of tablet apps to take down this information as well. Make sure to ask them if they are working with an agent when you talk to them — you don’t want to step on another agent’s toes and contact their client!
Be sure to wear your name tag and have lots of business cards on hand.
After the open house is over, send each person a quick email, thanking them for stopping by and asking them if they have any further questions about the property or the general area.
Guess what else doesn’t sell a house? The yard sign. Sure, it helps other agents find your listing when they drive into an unfamiliar neighborhood, but having a yard sign doesn’t actually lead to a sale in most cases. It does send prospective clients your way, though.
My sister who lives in another state is selling her house. She isn’t a real estate investor and has only ever bought one home. She found it in the newspaper and bought it without using a real estate agent.
Now that she’s selling, her market is very slow, and she’s using an agent to list this property and help her with the purchase of her next one. How did she find this agent? She happened to drive past a yard sign and dialed her phone. (Never mind that her sister is an agent and could have recommended someone to help her out. Sigh.)
To have access to the MLS, you need to either be an agent or work for an agent. Simply put, if your house isn’t on the MLS, the chances of it selling quickly — or even at all — decrease exponentially. Without MLS access, you won’t be able to provide your clients with information about the latest properties to come on the market. It also makes your ability to run reports on comparable sales data far more difficult. The advantages of MLS access are a major reason so many folks want to learn how to become a real estate agent.
MLS access doesn’t come for free, but it also doesn’t break the bank. My local MLS costs $417 a year if I pay the entire year upfront. It gets me up-to-date information about any property on the market.
I also have access to sold properties for the last few years, so I can run “comps” or comparable sales reports. This tells me what similar properties have sold for recently. Why is that important? Because that is exactly how appraisers value a home. If you’re working with retail clients, they’re most likely getting a mortgage. Banks don’t just hand over money easily — they want to know that they are going to be able to recoup their investment if you stop paying. So they have the property appraised to make sure it’s worth what you are paying for it.
Upon becoming a real estate agent, I didn’t get business cards made up right away, and I regret this. I wasn’t able to leave one at my first few showings, and it felt unprofessional. I also wasn’t able to pass them out to people who asked me about my name tag.
Get business cards made up. If you are planning on being an agent as a full time job, print up at least 1000 cards, and put them everywhere. Keep a stack in your car, your purse or pocket, your briefcase, your bag, your wallet. The time you don’t have them on you is when you’ll be asked for them.
I see a lot of agent cards. Most real estate agents put their picture on the card. I always thought this was weird; no other profession does this. When I first became a real estate agent, I asked my employing broker why she didn’t have her picture on her card. She explained that it is becoming less common now, but agents first started putting their images on cards to prove identity. Many times, you are working with people you have never met before. Having your picture on your card helps to “prove” who you are to the client.
Have a Dedicated Phone Number
“You never get a second chance to make a first impression.” You don’t want to spend all this time and money to get your license and set up your business, only to have clients continually get a busy signal because your teenage daughter is talking on the phone.
OK, I know I’ve dated myself there, but you don’t want to go through all the work and expense of getting a license and have your first impression be unprofessional. Get a separate phone number that is solely for your real estate business. You’ll know that when it rings, you need to answer professionally.
I was listening to the BiggerPockets Podcast Show 26 with Chris Clothier. Toward the end, he had a great quote about customer service, which holds true across the board when it comes to dealing with customers.
“It’s amazing how low the bar is to be truly great. The way you answer the phone, no matter what business you’re in, how you answer the phone, it means so much in whether or not you’ll be successful.”
The same holds true for answering at all. Almost every time I call another agent, it goes to voicemail rather than the agent picking up and answering. They call back within 5-10 minutes, which makes me even more frustrated, because it appears like they are screening phone calls.
Become a Customer Service Master
Like Chris said above, it’s amazing how low the bar is to be truly great. Whether you’re working with a buyer or a seller, they want to know what’s going on. Buyers want to know if there are any new homes on the market that fit their criteria. They want to know if they can see them, and if there are any other offers on the property. Sellers want to know if they have any showings and what other people thought of their property.
My sister is selling her condo. She isn’t an investor and has only ever purchased one home. She found her agent through a yard sign and thought she had explained to the agent that she is new to all this. Yet her agent continually keeps her in the dark, not answering questions, not returning phone calls, not explaining the next step.
My sister thought that after the inspection, the seller would just fix everything the inspector found. She wanted to know who would forward the inspection report to the seller so they could start fixing things. This may sound silly to someone who is an experienced investor, but you don’t know what you don’t know.
Unless your buyer has bought and sold more than five houses in the last 10 years, they’re going to need some hand-holding. They’re looking to you to give them guidance but many of them are too embarrassed to ask for it. If you think they should know something, tell them. As each stage of the contract comes up, give them an overview of what is happening, and make sure they understand what you’ve just said.
Set Reasonable Expectations
Your market conditions are the only thing that affects your sale or search. Make sure you convey the right expectations to your client. If they are trying to sell a home and want to price it over the top of your recommended price range, let them know that it will take longer for their property to sell.
If they are trying to buy in a hot market, prepare them for disappointment when they lose house after house because they don’t have a cash offer. Recommend they write a letter to the sellers, introducing themselves.
If you are only available nights and weekends, tell them this before they sign a contract with you. It doesn’t do anyone any good to be tied up with an agent who can’t meet their needs.
Become an Expert Negotiator
There’s a lot of give and take when you help someone buy or sell a house. Home inspectors always find something. The buyers always want a concession for the issue, and the sellers never want to pay for it. Being a real estate agent is a lot like being a mediator. Learning the art of negotiation is key in the quest to learn how to become a real estate agent.
Get a Professional Website
Most people start their home search online. They look at Zillow, RedFin and Realtor.com to get an idea of what is on the market in their area. They might even search for an agent near them. What sort of image does your website present? Does it look like you are a professional who can help a buyer make one of the largest, most important purchases of their life? Or does it look like you spent $5 on Fivrr to get something slapped together? If web design isn’t your specialty, spend the money to present a professional image to potential clients.
Run it Like a Business
Successful real estate agents keep themselves busy. They are either working with clients or working on their business, getting new clients. While you technically work under an employing broker for your first few years, you really are your own boss. YOU make your hours, and YOU find your clients. You decide how much you’ll spend on advertising to get new clients and how much you’ll spend to market the properties you list.
BiggerPockets Agent Profile
Did you know that you can turn your BiggerPockets profile into an Agent Profile? At the top of your profile page will be a green bar with your title and license number and the issuing state.
There is a section for you to enter your office information and another to mark the locations you serve. Best of all, this service is absolutely free.
Hopefully after reading this article, you have a better idea on how to become a real estate agent and whether it’s right for you. Becoming a real estate agent can be a tremendously helpful tool to real estate investors.
Becoming a Real Estate Agent: What Characteristics Do You Need?
While thinking about becoming a real estate agent, I did not appreciate all that real estate agents are expected to do. This is probably because I found some of the worst real estate agents on the planet to work with. After paying cash for a home, I contacted the agent who represented me and asked her to let me know if she came across any more of this type property. Her response? “Well, I can sign you up to get emails.” Well, don’t strain yourself. I’ll go find an agent who likes it when their client pays cash and comes back multiple times.
There are a lot of little things — and some pretty big things — that agents do behind the scenes, including coordinating schedules to make a contract work for all parties, making sure documents are signed and submitted on time, and chasing down weird little bits of information and documentation that are different for every single transaction.
The BEST real estate agents hustle.
They’re always looking for more clients to help buy or sell a property, they’re clever when it comes to marketing, and they are always on the lookout for new ways to get business.
Think about your local market. Is there a face you see ALL THE TIME? On billboards, shopping carts, yard signs, web site ads, and newspapers? That agent spends a significant amount of money on advertising. That agent also has a significant client base.
The BEST real estate agents are knowledgeable.
They’re experts on their local market. They can recommend the best title companies, the best home inspectors, and a great lender, lawyer or any other professional you would need during the buying or selling process.
This isn’t the type of knowledge you get out of a book — this comes from experience. I know a newer agent in my area who has lived here his whole life. He KNOWS this area. He knows the good towns and the good parts of those towns. He knows how to get places and what developments aren’t quality. He’s only been an agent for a short time, but his knowledge of the area puts him leaps and bounds above other agents who may have had their license longer, but aren’t as familiar with the area.
The BEST real estate agents do this full-time.
You have to be able to show a property to your client when it fits their schedule. If they’re only available after work and on weekends, guess when you work? If they’re here for a whirlwind house-hunting trip, guess what you’re doing for the next 24-36-48 hours?
It’s difficult to do this while working a full-time 9-5. I have a super-lenient boss who understands real estate transactions and is willing to work with me when I have a closing or a showing or an inspection (thanks, Josh Dorkin!) but I don’t like when the two overlap. I also don’t have many clients, and those that I do have are friends who know this isn’t my full-time gig. (I also don’t do it to support myself; I just really love real estate.)
Being a successful real estate agent isn’t something you can do part-time. But when you’re first starting out, being an agent is sort of a Catch-22. You only make money when you sell a property, so you need to keep your day job until you can support yourself with your real estate earnings. But you need to be available at the drop of a hat — especially in a hot market where properties go under contract instantly — to show houses to your clients.
Notice I said a SUCCESSFUL real estate agent is full-time. When becoming a real estate agent, you can certainly do this part-time, but to truly be successful, you have to be available all the time.
The BEST real estate agents treat this like their own business.
Thinking about becoming a real estate agent? Better have an entrepreneurial spirit. There are very few salaried opportunities for real estate agents. The traditional arrangement is that you work under a more experienced broker, and you actually pay them when you sell a property. The amount you pay them varies — and typically decreases as you sell more and more.
You have to go out and get your own business. You may get a referral here and there, but the crux of your business will be a steady stream of new business, especially if you are working with retail clients.
Advertising, networking, more advertising and more networking is how that happens. The best agents are aggressive — they have to be, because there is so much competition amongst agents.
Real Estate Agent Duties
While thinking about becoming a real estate agent, remember that you’ll have responsibilities to your client. You have a fiduciary responsibility to hold their best interests above your own — if they find a property they love, but the seller isn’t offering the type of commission you want to earn, you can’t steer them in another direction.
You are required to work toward getting the highest price/best offer for your sellers and the lowest price/best offer for your buyers. You advise your clients and give as much information as you can about the property and any factors that may affect it.
You have the duty of honesty. Pretty self-explanatory — don’t lie, misrepresent or defraud your client. Really, this should be a no-brainer in all aspects of your life.
You have the duty of accounting, which means you must timely and accurately account for all money received and provide records of such upon request.
You have the duty of confidentiality, obedience, and loyalty. Meaning, you keep their information secret, obey their directions as long as they are legal and ethical, and hold their interests first.
In addition to all the legal stuff, your day-to-day duties are always different, yet always the same. No two properties are the same, so no two transactions are the same. But they have similar components. Let’s look at agent duties when you are working with a buyer.
Confer, Then Translate
If you’re working with retail clients, you’re now going to have to translate what they are asking for and set realistic expectations. A client looking for a 4-bedroom penthouse apartment overlooking Central Park with a budget of $150,000 isn’t going to find too much.
I like to ask my clients questions about their minimums. What is the minimum number of bathrooms they can have in the house? What’s the minimum number of bedrooms, square footage, yard size, garage space, etc.? Next I ask about their max. What’s the maximum amount they want to spend? What’s the maximum monthly payment, etc.?
Then I plug those basic parameters into the MLS and see what shows up. Realistic expectations will have a longer list of results, while unrealistic expectations may turn up nothing. If the list is too long, then we can narrow down further. “I’d like 2 bathrooms, but 3 would be even better.”
Show Properties: MLS Listings
After you have narrowed down what your client is looking for, run a list of all properties that fit their needs and let them browse. My local MLS (Multiple Listing Service) allows me to send listings to a sister site called MySite. There, my client can view all the pictures from the MLS, read the basic information from the listing sheet, and categorize the properties from the Inbox into “Favorites,” “Maybes” and “Trash.”
Once they’ve sorted the listings, I go through and double check to make sure they have the criteria my clients have said they want. Retail clients can have a difficult time getting past the pictures, and sometimes agents try to highlight a feature in a way that makes it far more attractive than it happens to be in real life. Think wide-angle lens.
Your client may have said they want a house with 3 bedrooms on one level because they have small children. That won’t stop them from adding a home to their list of must-sees that has 2 bedrooms upstairs and 2 bedrooms downstairs. A quick check of the listing sheet can save you a half hour of showing time.
A big part of becoming a real estate agent is learning to correctly read people. While you are showing properties, pay attention to what your client is really after. Body language is so much more telling than what they say to you.
When becoming a real estate agent, your duty is to your client and helping them get the best deal. Knowing why an owner is selling can help your buyer make the best, most attractive offer.
Knowing your market comes into play here yet again. Knowing what aspects of the contract can be negotiated, and then negotiating them for your client’s favor — or for the seller’s favor if they aren’t important to your client — is a mark of a great negotiator.
You’ve heard the term “real estate is local.” Local is relative. It isn’t always a city, or even a neighborhood — sometimes it’s block by block. But not all agents get this and may use inappropriate properties to arrive at an initial asking price for a home.
Explain the Contract and Procedures
Buying a home is not something regular people do frequently. They don’t know the steps, and if it’s been a few years since their last purchase, they have probably changed anyway. You can bet the contract has changed.
There is an excellent contracts class available in the Denver area. The class covers the best ways to fill out every real estate contract — and at the end of the class, you take home a reference binder with different sections for each different contract. I took it at my broker’s suggestion, and it was so worth it. There’s a new contract for 2016 (of course), and I’m taking it again in February.
Your client may completely trust you and not question any part of the contract. You may also get a client who questions everything. Having a thorough understanding of the contract and being able to answer questions quickly will help gain your client’s trust and help the transaction go smoothly. It will also go a long way toward having them refer you to their friends and family — one of the best ways to get new business when becoming a real estate agent.
Work with a Seller
You still have all the same basic duties when you are working with a seller — loyalty, honesty, accounting, confidentiality, obedience and fiduciary responsibility. But there are also duties specific to a seller.
Prepare a CMA
A CMA is a Comparative Market Analysis — which is where you analyze the market immediately surrounding your subject property. Houses will appraise for what other, similar houses in the area have sold for recently, for the most part. No two houses are the same, so no two appraisals will come back the same. One home may have better carpet or a newer kitchen. Another might have more bedrooms or a finished basement.
Preparing a CMA for your sellers will help give them a more realistic expectation of what they can sell their home for.
Set Realistic Expectations
Going through your client’s home and giving them pointers on how best to declutter and stage it will help them get top dollar for their house. But it is best to set their expectations at a realistic level. If they have an outdated kitchen, they can’t hope to get the same price as their next-door neighbor with his completely remodeled home.
Likewise, if there is an unpleasant odor in the home, they will be receiving lower offers. Don’t suggest masking the scent — buyers can smell through that.
The seller is ultimately responsible for determining the asking price, but if they want to list it higher than you think is realistic, it’s best to let them know this up front.
Take Great Pictures
I like to take multiple photos of each room of the house and choose the ones that best represent the home. I say I like to take them, but actually my husband takes the pictures. He takes high quality pictures that rival a professional photographer.
But be honest with yourself. If you take bad photos, hire this job out. One podcast guest suggests going through Craigslist and asking all the photographers for a quote.
Remember, take honest pictures. Wide angle lenses might make the house look better, but no one is going to buy a house that looks great in pictures and terrible in real life.
Fill Out ALL the Forms
There are a multitude of forms that need to be completed before listing a house. Houses built before 1978 need a Lead Based Paint Disclosure. Sellers who have occupied the home should fill out a Seller’s Property Disclosure. Source of Water is required in Colorado.
Market the Property
Listing a house isn’t just taking the information and pictures and posting it on the MLS, then sitting back and waiting for offers to roll in. Becoming a real estate agent involves learning about marketing. Marketing the property includes websites, signs, postcards, flyers, social media, email, newspaper ads, open houses, yard signs and much, much more.
Compare and Translate Offers
In my local market, real estate is hot, hot, hot. Almost every property receives multiple offers within days of being listed.
As an agent representing the seller, you need to be able to translate these offers to your clients, to give them the entire picture of the offer. Know the difference between an FHA loan and a conventional loan, and why one is better than the other. Know the benefits of having a no-contingency offer and be able to explain the entire contract — and compare them all.
Your seller might be super experienced, organized and on top of everything. But probably not. The contract is a legally binding agreement with dates and deadlines that must be met. When becoming a real estate agent, you have to stay on top of your sellers to make sure they are keeping up with the deadlines. A missed deadline can cost them quite a bit of money, and the buyer is under no obligation to extend deadlines.
Real Estate Agent Salary
This is probably the part you are most interested in — who wants to spend hours and hours driving clients around to see houses for free? You are thinking of becoming a real estate agent because you want to make money, right?
The thing is there is no typical real estate agent salary. Real estate is local — your market and your competition will help determine your clients and your end results.
Essentially, you own your own business when you’re becoming a real estate agent. The amount of marketing you do is a huge factor in your success and your real estate agent salary. If you choose to sell only one house a year, you’re not going to be bringing in a ton of cash, unless you sell to the rich and famous.
It is a violation of the Sherman Anti-Trust Act to state a going rate for real estate agent commissions — it’s called price fixing. Real estate agent commissions are negotiable as far as the agent wishes to negotiate. But an good estimate is 2.5% – 3.0% per side — that is, the buyer’s agent and the seller’s agent.
But wait, there’s more! When becoming a real estate agent, you have a couple of different ways to work under an employing broker. There are the commission-split brokers, with whom you share your commission. I’ve seen splits as high as 60% to the employing broker, meaning that $10,000 commission is now $4,000 to you before your costs are figured. I’ve seen splits as low as 10%, meaning that same commission puts $9,000 in your pocket. Typically, those lower splits are going to agents who are producing more volume.
There is also the flat fee commission, where you pay a set dollar amount no matter what the commission. I work for a brokerage like this. I pay $499 per transaction for any home where the list price is less than $3 million.
There are advantages and disadvantages for working for both types of agencies, so you’ll have to decide which one is right for you.
The average real estate agent salary is $39,800. Or $43,860. Or $76,000. But it might also be $33,000. These are the results I got back when I Googled “What is the average real estate agent salary?”
The thing is, you get out of it what you put into it. Are you willing to be on call round the clock? You’re probably not going to be getting phone calls at 2:00 a.m., but you might get one at 5:30 or 6:00 a.m. from a client who is dying to see a house that just popped up on the market. You might also get one at 10:00 p.m. at night for the same reason. Remember this when considering becoming a real estate agent.
The agents making top dollar in their real estate salary are the agents answering their phones all the time. The agents who are working all the time.
How to Find Real Estate Clients
Finding a client takes work. Everyone already knows an agent or twelve. Clients don’t bust down your door — they don’t have to because they are inundated with flyers, mailers, magnets, postcards, etc. You have to make yourself memorable. What can you offer that another agent can’t? Why should someone hire you?
Your marketing budget can make or break you. In the beginning, your success literally depends on it.
One of the top tips I have seen is also one of the simplest. Get a name tag proclaiming your real estate agent status and wear it everywhere. People won’t know what you do until you tell them.
Related: The Simple Way to Find Listing Leads as an Agent Without Leaving Your Computer
Your “For Sale” sign that you plant in the yard is a marketing tool.
An open house is one of the best ways to put your face in front of potential buyers, many of whom are not currently working with a real estate agent. When they walk in your door, be prepared to wow them with your expertise.
There are all manner of clever marketing ideas online — one agent has water bottles printed with her name and information and passes them out at the gym. Another agent puts a dog treat inside a doggie-doo bag and attaches a business card with a ribbon to the bag, then leaves a box of treats outside the fence at the dog park. Yet another one puts 9-volt batteries in a bag, along with a note to change their smoke detector batteries around the time the clocks go back.
Still have questions on how to become a real estate agent or using your license to its fullest potential?
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