Are you dreaming about becoming a real estate agent? A career in residential real estate can be compelling and exciting. It’s one of the few jobs you can transition into at any stage of life — whether you’re a recent high-school graduate, a stay-at-home-parent looking to join or return to the workforce, or someone looking to move from a traditional 9-to-5 job. It’s also one of the few careers that give you the full freedom to decide whether you want to work full or part-time. If you’re considering starting a career in real estate, read our guide below to see if its the right fit for you. Next, learn tips to get started.
Is Your Personality Right for Real Estate?
Before spending money on pre-licensing classes and exams, take a hard and honest look at your strengths and skillsets. Consider what agents must do in their day. Agents must call on prospective buyers and sellers, create marketing and advertising strategies and material, negotiate contract details, and stay on top of multiple deadlines.
Extroverted Versus Introverted
Are you someone who likes talking to people? Do interactions with people excite you or drain you? If you were standing in a grocery store and overheard someone talking about wanting to sell their house, would you jump into the conversation and hand them a business card? Being introverted doesn’t mean you can’t be a real estate agent. But if you have anxiety about talking to people, it could inhibit your success.
Self-Directed Versus Preferring Direction
In real estate, you’re your own boss. That means your success falls squarely on your efforts. If you’re someone who can set and meet your personal goals and can block and use your time for real estate activities without someone giving you direction on what to do next, real estate might be an excellent choice.
Do You Have Seed Money?
To obtain your license, you must first take and pass the courses to pass the exam. You can enroll in classes online or in-person. Exam requirements and costs vary by location. Many new agents don’t anticipate the expense of the actual start-up costs. For example, according to the course fees listed on the Ontario Real Estate Association fees for the Salesperson Registration Education Program cost around $3500.
Consult with your local association for current fees, and a specific breakdown on costs; however, the key takeaway is it is crucial to save up to cover fees. Beginning a career in real estate is much like starting any small business—it requires cash to get started. A typical agent spends around $5,000 in the first-year for signs, multiple-listing-service (MLS) and lockbox dues, advertising, marketing, supplies, and more.
It can take a few months or more to close your first deal. So, you might have to live on your savings or income from another job during that time when you have a few commissions combined with higher expenditures. These early months are a test for those entering the profession as part-timers because you can’t always afford to dedicate full-time focus on securing those first clients.
If you’re going into real estate intending to be part-time only, develop a budget and business plan.
The Small Business Association has an excellent financial planning guide to help you estimate and plan the right budget. A mobile app, such as QuickBooks Self-Employed, makes it easy to manage your business and personal finances and file quarterly and end-of-year taxes whether you work as a part-time or full-time agent.
What Is Your Availability?
If you’re considering starting your real estate career as a part-time agent, perhaps because you still have a day job you can’t or aren’t sure you want to leave yet, consider whether you have enough time to study and the flexibility in your work schedule to sit for the exam in the middle of the day. Also think about how willing you are to work evenings and weekends, sometimes at the last minute.
As an agent, you may find yourself discussing multiple offers, negotiating details of contracts, and marking up documents in the evening. If you’re a parent, having support for childcare during the odd (or even last-minute) times you work is essential.
Much like developing a financial budget, as an agent, you must budget your time. You need to make cold calls, follow up on leads, develop marketing and advertising materials, schedule photographers and other contractors, hold open houses, and more. How many hours a day can you devote to real estate? Which hours can you block for each activity?
To learn how to maximize your productivity by using mobile solutions, read: Mobile Solutions for Real Estate Agents.
What’s Your Comfort Level With Risk?
As with any career, certain risks come with being an agent. Being a real estate agent doesn’t come with a steady paycheck. Your paydays depend on commissions and when sales close. It also depends on the state of the housing market. As a real estate agent, it’s a good idea to set your own goals, act as your own boss, and reap all the rewards from your hard work. When you’re a real estate agent, there’s no limit to what you can earn, but there are no guarantees either.
There are risks in terms of liability (for fraud, negligence, and violation of an agent’s fiduciary duties, to name a few). For this, some agents invest in insurance plans or choose to work full time with a brokerage that provides some liability coverage. Risks to personal safety include hosting open houses or showing houses alone and walking into homes with unattended pets, though you can quickly mitigate some of these risks by asking a friend to work with you and talking to the homeowner about pets beforehand.
Steps for Becoming a Real Estate Agent
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 university or college degree, but you do have to be 18 or older and a high school graduate.
Step 1: Enroll in Your Province’s Real Estate Licensing Course
Licensing requirements vary by province and jurisdiction. Research your region and follow the necessary process 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 regions. Provincial real estate councils or associations typically provide their residents with the information you need to get started, and those organizations are listed at Royal LePage.
Once you know your province’s requirements, enroll in a course. Many provinces offer both in-person and online options for completing the course. The number of course hours you need to complete varies by province.
Step 2: Pass the Licensing Exam
While test questions for the licensing exam will vary there are general preparation books available that provide you with practice tests.
Once you pass the exam, you 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 even decide to join the Canadian Real Estate Association (CREA).
Step 3: Find an Agency and Broker
After receiving your license, find a real estate agency that’s a good fit for you. Interview several managing brokers to find out about their working style, agency structure, and agent fees. Once you’ve retained sponsorship from a licensed real estate broker, then contact your provincial licensing body to get and submit an application. Sponsorship typically means you have a job offer from the broker in question. To maintain your licence once approved, you may need to take additional courses, depending on the province in which you sell real estate.
Most agents need to pay a fee to the brokerage they work under. Sometimes this is a flat fee. Other times, it’s a percentage of every sale. Make sure any managing broker you speak with clearly outlines the fees you pay. You want to know this before signing on to an agency.
It’s a good idea to 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 you learn all the forms and how to successfully work with clients while complying with laws or licensing rules.
Step 4: Plan for and Track Expenses
As an agent, you work as an independent contractor, which means you have a lot of flexibility to work as much or as little as you want. But being an independent contractor also means there are many expenses to plan for and track. Here are some of them:
- Signage — You need custom signs with your name on them to hang at your first listing. These usually cost $40-$60 for each but can cost upwards of $150. You also need open house A-frame boards. These run about $100 each. Association fees — In general, association fees cost anywhere from $300-$700. Lockbox services — Keys for listings are 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 or more per year. Miscellaneous — Don’t forget professional headshots for your business cards and other office supplies, such as a computer, transaction folders, and a printer.
Since you work as an independent contractor, any commissions you make don’t have taxes already taken out. You need an easy solution for tracking what you earn, what you owe, and whether your real estate business makes money.
The Advantages of Being a Real Estate Agent
There are several advantages to working for yourself as a real estate agent:
– Make your own hours: You can work the hours of your choosing, and you can also perform many duties from home on your personal computer or remotely via your mobile device
– Flexible time off: Since you’re in charge of your business, you can cater your vacation schedule according to your own needs.
– Learn new skills that you can apply to other endeavors, such as empathy.
– Business growth is up to you: Since you derive most of your income from comission: You can realize great financial rewards if you put the hard work and hours in.