A career in residential real estate is compelling and exciting. It’s one of the few careers you can transition into at any stage of life — whether you are 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 8-to-5 job to something with more flexibility. It’s also one of the few careers where the financial potential is unlimited.
People often wonder if they can be successful as a part-time agent. The simple answer is, of course. But take a step back and understand a few things before jumping in. Then, if you determine real estate is a good fit for you, decide between full and part time.
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 skill sets. Consider what agents must do in their day. Agents must call on prospective buyers and sellers, create marketing and advertising strategies and material, negotiate the fine points of contracts, 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 be able to 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 are your own boss. That means your success is built squarely on your efforts. If you are someone who can set and honor your own goals, can block and use your time for real estate activities without someone giving you direction on what you should do next, real estate might be a good choice.
Generalist versus Specialist
When you are a real estate agent, you do everything from marketing to sales to accounting. Do you get excited about knowing a little about many things, or do you lean toward becoming an expert in a few subject areas? Many people think being an agent is just being an expert on houses, but in fact, understanding houses and the housing market is just a small slice of what it takes to be a competent agent. This is a bit of a trick question because to be an agent, you have to be both a generalist and a specialist.
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 courses online or in-person but in either case, expect to pay between $150-$600 for the course. Exam requirements and costs vary by state. Additionally, many new agents don’t anticipate the expense of the actual start-up costs. Beginning a career in real estate is much like starting any small business. It’s not for someone who doesn’t have the cash to get started. A typical agent might spend $5,000 in the first-year for signs, 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 few to no commissions combined with heavy expenditures. These early months are a test and especially difficult for those entering the profession as part-timers because they can’t dedicate full-time focus on securing those first clients.
If you are going into real estate with the intention of being 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 like 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 are considering starting real estate 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.
Agents frequently find that discussing multiple offers, negotiating details of contracts and marking up documents often happens in the evening. If you are a parent, having support for child care during the odd (or even last-minute) times you might have to work is important.
Much like developing a financial budget, agents must budget their time. They 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 will you devote to real estate? Which hours will you block for each activity?
What’s your risk comfort level?
As with any career, there are certain risks that come with being an agent.
Being a real estate agent doesn’t come with a steady paycheck. It depends on commissions and when sales close. It also depends on the state of the housing market. Real estate agents set their own goals, act as their own boss and reap all the rewards from their hard work. There’s no limit to what you can earn… but there’s no floor either. The trade off is maximum flexibility and control versus a guaranteed paycheck.
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 type of liability coverage. Risks to personal safety include hosting open houses or showing houses alone, and walking into homes with big dogs or other dangers.
Overall, real estate is a rewarding profession. Whether you are considering a part-time or full-time career, there are many things you need to evaluate against your financial status, lifestyle, availability and risk tolerance.