Real estate is a rewarding career path, and with a constantly evolving housing market, it’s exciting too. Here’s a step-by-step guide to becoming a real estate agent.
Becoming a real estate agent is something you can pursue without a college degree. Eligibility starts with being 18 or older and a high school graduate.
Step 1: Enroll in Your Province’s Real Estate Licensing Course
Licensing requirements vary state by jurisdiction. Research your state and follow what is necessary for licensing where you live. If you live near a provincial border or travel often to another province, you may want to consider becoming licensed in multiple provinces.
Once you know your state’s requirements, enroll in a course. Many provinces offer both in-person and online options for completing the course. Expect to spend between $150-400 for the required coursework.
Step 2: Complete the Required Pre-license Education
Every province requires a pre-license course prior to applying for a license. The number of course hours varies by province.
Step 3: Pass the Licensing Exam
Some people assume the test will be easy, but many find it’s actually just the opposite. Test questions vary — just as province’s exams vary — but there are general preparation books available that provide practice tests.
Once you pass the exam, you’ll need to take continuing education courses to maintain your license. Many agents also choose to get specialty designations that allow them to market and target their services to different segments of people. Some agents choose to join the Canadian Real Estate Association (CREA).
Step 4: Find an Agency and Broker
After you’re licensed, find a real estate agency that’s a good fit for you. Interview a number of managing brokers to find out about their working style, agency structure and agent fees. Expect business start-up costs to be up to $5,000. Agents must purchase their own signs, enroll in a local multiple listing service (MLS), apply for key access for lock boxes and purchase any marketing collateral, like postcards and flyers you might use to get your name out there.
Most agents will need to pay a fee to the brokerage they work under. Sometimes this is a flat fee, other times, a percentage of every sale. Make sure any managing broker you speak with clearly outlines the fees you are expected to pay. You’ll want to know this before signing on to an agency.
Additionally, ask brokers about mentoring or additional classwork the agency offers. Some agencies team up new agents with experienced ones on the first few deals to help make sure the new agent learns all the forms, how to successfully work with clients and to prevent breaking laws or licensing rules.
Step 5: Plan for and Track Expenses
Agents work as independent contractors, which means they have a lot of flexibility to work as much or as little as they want. But being an independent contractor also means there are many expenses to plan for and track. Here are some of them:
- Signage — You’ll need custom signs with your name on them to hang at your first listing. These usually cost $40-$60 for each. You will also need open house A-frame boards. These run about $100 each.
- Association fees — Whatever local association you need to join, expect annual dues of anywhere from $300-$700.
- Lockbox services — Keys for listings are placed in access-controlled boxes. Typically, you buy both the boxes and the service for accessing them. Expect fees to run $300-$500 per year and each box to cost around $100.
- Advertising — Trying to get your name out into the world is pricey. Third-party vendors such as Zillow and Trulia offer advertising options for agents, but ads on their listings can run from $50 to $1,000 per month. Don’t overspend on advertising early on when your income is low. You might consider a business website. Hosting can run from $50-$200 per year.
- Miscellaneous — Don’t forget professional headshots for your business cards, the business cards themselves and other office supplies like a computer, transaction folders and a printer.
Since you will be working as an independent contractor, any commissions you make will not have taxes taken out. You’ll need an easy solution for tracking what you have paid, what you owe and whether your real estate business is making money. Opt for a solution like QuickBooks Self-Employed. You can try it free and maintain it affordably.
Lastly, remember that as your own business, you’ll need to keep track of your own paperwork for taxes. Check with your accountant or the CRA website. You’ll likely need to keep records of your mileage, your home utility bills and client meals and gifts, among others.