If you’re thinking about getting into the real estate business then there’s a lot you need to take into consideration before you make the jump. I’ve been a licensed, active agent for over two years now and I admit that in the beginning I had no clue about the costs, work, or time involved in getting started. All I knew was I wanted to do it so I dove in head first without doing the research. Don’t make that mistake. While real estate can be a very rewarding practice, it’s not necessarily for everyone. It takes a person with a special type of motivation and sales skills to make a living with the job and most agents can’t handle the aspect of complete freedom without abusing their time. If you’re curious about what it takes to get started, then this article will clear things up.
First of all, it’s important for you to know exactly what a real estate agent does. An agent assists clients in buying or selling houses. A real estate agent must have a great knowledge of the local market and is able to tell someone how much their house is worth. Agents also must have a general knowledge of the communities in the area, as well as any restrictions or covenants for that same area. In a way, real estate agents serve as the backbone to the entire deal. We assist buyers in finding a good mortgage broker, home inspector, termite inspector, closing attorney, and many other aspects. On the flip side, real estate agents that represent sellers are required to help conduct a comparative market analysis that estimates a home’s worth, the agent is responsible to pay for advertising out of he or she’s pocket, and they must handle the transaction from start to close.
The process is not over once a buyer or seller you’re representing puts a house under contract. This is a common misunderstanding among the general public. In fact, this is when the real work begins. There is a stack of paperwork that must be submitted to attorneys and internal departments within the real estate agency. There will be a period of home inspections where there are negotiations on what items will or won’t be repaired. The agent also must work closely with the mortgage broker to keep updated on the status of the loan package.
You may be wondering what kind of hours and flexibility an agent has? Most agents were, on average, between 40-45 hours per week. Most showings to buyers occur on the evenings or weekends, because that’s the best time for the majority of people since it’s after work. The tools you need to be a real estate agent are quite simple, and it’s common for agents to work from their home. While you’re working for a broker-in-charge, you’re still an independent contractor and you set your own hours. This aspect of the job is nice, but again most people abuse the freedom and end up doing other tasks. You must stay motivated and focused on real estate.
With that said, you’re ready to get started. The first thing you need to do is get enrolled in a real estate class. Real estate must have a license from the state they work in. You must be 18 years old and graduated from high school These are usually held at independent schools or you can find some real estate agencies that hold classes at night. I’ll give you a secret. Personally, I think it’s a wise idea to enroll in a school held within a real estate agency because once you’re done it’s easy to schedule an interview with that agency for a job! The primary objectives of this course are (1) to provide students with the basic knowledge and skills necessary to act as a licensed real estate broker in a manner that protects and serves the public interest and (2) to prepare students for the Real Estate license examination. Major topics include basic real estate property law, property taxation, land use controls, environmental hazards, brokerage relationships and practices, real estate contracts, real estate financing, closing real estate transactions, real estate valuation, fair housing, landlord and tenant, property management, federal income taxation of real estate, basic house construction, and property insurance. Every state is different on required hours and the costs will vary tremendously for the course, but for the State of North Carolina where I live it is 80 hours required and the pre-licensing course cost $400. I hope that helps.
Once you’ve met the requirements of the class and you’ve passed the final test, which is very difficult, you’re read to move on to the State licensing test. Again, you can take this test at various locations and the costs range tremendously. In the state of North Carolina it’s approximately $100. I recommend studying hard, review the material from the class, and buy helpful testing kits that will allow you to take a mock test to prepare yourself for the real thing. If you fail the test, you’re allowed to take it again but there is typically a wait of a few weeks before you can attempt it again.
Once you’ve passed the State licensing test, you’ll have to find a position with a reputable real estate company in the area. Keep in mind that all of the expenses you’ll incur in the beginning are directly from your pocket. The company, to be quite honest, has nothing invested in you except for cubicle space. You’ll need to order business cards, a name tag, magnet for your card, software for your computer that retrieves the Multiple Listing Service, promotional materials, and much much more. My advice is that if you know you’re going to get in the business then save your money prior to it. Continue to work part-time on the side and be very frugal. I estimate that you’ll need at least six months worth of savings stored away in your bank account, because that’s the average time it takes to get your first closing.
I hope that helps and good luck!
