Getting started as a real estate agent is a relatively simple procedure. Taking a couple of courses and passing an exam is about all that is required in most states to be considered a real estate agent.
In fact, getting started is so easy, but succeeding is so challenging that over 80% of agents are in another field within 4 years of getting their license.
In order to get started and become successful, it requires a lot of hard work, timing, and strategic planning to buck the trend.
Before we get too far into the weeds about what is required to start, the first thing to answer is, what are your plans for becoming a real estate agent? Are you looking to become a part-time agent working on a flexible schedule, or are you diving into the real estate industry as a full-time professional hoping to make it big?
In truth, most agents find a happy middle ground that establishes a solid business but nothing too exotic. Either way, your career goals are ones only you can set and decide on, but to get started, there are a few things you need to know.
Get Licensed
First and foremost, to get started as a real estate agent, you must attend some classes and then pass your state licensing exam. Most courses are designed to help you learn about your fiduciary and ethical responsibility and some general laws regulating the industry.
They don’t teach you how to find clients, negotiate and write contracts and deals, or succeed as an agent. Instead, those topics are left to self-education and finding the right experienced professionals you can learn from along the way.
To get started in real estate, you must find a credentialed real estate school. When researching the type of school that aligns with your needs, you want to look for ones that allow for online and/or in-person learning and test preparation and have a long track record of preparing people to pass their state licensing exams.
Another factor in choosing your licensing classes is costs. Some classes are costly, and starting may not fit your family’s budget. But, on the other hand, discount courses may be just that, a discount that doesn’t prepare you for the types of questions your state governing board will test you on.
Once you go through your classes, which can take about 135 hours of instruction before you’re cleared to schedule your exam, you’ll need to pass your exam and then join a local real estate board.
Be sure to check your state governing body to see exactly what is required to get your license in that state. Each state may have different basic requirements, so checking with your individual state’s governing body is the best way to be sure that you’ll be compliant in preparing to take your licensing exam.
Schedule Your Test
After you pass your real estate coursework, you’ll need to schedule a test date. There are often various fees to take the exam, and all those will be detailed by your course instructor or your state’s licensing body.
You’ll want to schedule your test close to finishing your coursework to ensure that the material is still fresh and top of mind to you.
Pay Fees And Dues
After you pass your classes and schedule your exam, you must join your local real estate board and MLS once you get a passing result.
The local board will charge you dues, typically quarterly, though some will charge you annually. For joining, your membership will include ethics courses, potentially continuing education courses, and other support materials to help you as a new agent.
They will ask what broker you plan to “hang” your license with and provide you with various brokers to interview with and choose to work under.
Your MLS membership is crucial to your success as an agent. The MLS, or Multiple Listing Service, is a service where all homes under contract are listed in your area, and access is limited to current members only.
You’ll need MLS access to see what’s current and upcoming on the market and to view and show them to your clients. Also, the MLS is where you will advertise your listings once you get some under your belt.
Choose Your Brokerage Carefully
Now that you have your license and have joined the local real estate board, and have paid the fees to join the MLS, you need to decide where to hang your license.
Hanging your license is industry speak for having your license under the umbrella of a brokerage.
Many brokers will make a contractual agreement with agents, including commission splits, desk fees, transaction costs, and office requirements of their agents if there are any.
When you’re considering various brokers, you want to look beyond just commission splits with that broker. Often, new agents look at a broker split at around 70% to the agent and the rest to the broker, though some take a more significant cut for brand-new agents.
When a broker interviews you, you also want to question the agent and what they will provide you as a new agent. Again, it’s a mutual relationship; you often act as an independent agent, not an employee.
One thing to consider is that the larger the broker, the greater the name recognition, and the easier it is to be lost in the numbers as a new agent. Another consideration is that larger brokerages may provide better legal protections and provide all-in-one client services from financing to escrow and more.
In smaller boutiques, agents don’t have the same broad name recognition to back them up, but you can cut your teeth with them and learn. Sometimes, a smaller boutique has a better reputation in specific neighborhoods than large brokerages.
Some basic things you want to ask your broker during your initial interview include;
- Broker split
- Lead generation
- Support network for agents
- Continuing education opportunities
Lead Generation
Once you know what the broker split, desk fees, and in-office requirements may be for your brokerage, you want to ask about lead generation opportunities provided by your brokerage. In some cases, your broker may not offer anything in the way of leads other than their name recognition, so that needs to be clear before you sign a contract with them.
However, in smaller brokerages, your broker may provide inbound lead opportunities for their agents that come from paid leads, walk-ins, and call-ins. Therefore, it’s essential to ask if there are lead generation opportunities provided by your broker and how you can get set up to work for those leads.
Support Network
In your broker interview, you want to know about lead generation and commission splits, and what support networks your broker is willing to provide.
For example, there are options for office assistants to help with scheduling and marketing, transaction coordinators to make sure any deals are getting their “i’s” dotted and “t’s” crossed, and compliance officers to help keep you away from any legal or ethical risks.
One final consideration is your broker's distance from your focus area and home. Is the commute to and from the office going to be worthwhile, especially if you have in-office hour requirements–choosing a broker nearby your home will enhance your experience and help maintain the all-important work/life balance.
There are a ton of cloud-based brokerages like eXp that can provide all the tools you need and eliminate the need to drive to a physical location.
Set Your Business Budget
As soon as you settle on a broker, the next step is to establish a budget. It’s easy to get caught up in your earning potential, but at the beginning of this article, we highlighted that almost all new agents would drop out of the industry in a few short years.
Take stock of your personal needs and budget your business expenses to accommodate those, as it’ll likely be a few months before you start to see any commissions.
Understanding The Market
Eventually, you want to establish your reputation as a go-to expert for all things real estate. But, as you’re starting as a new agent, that can be difficult to do.
In order to jump-start your career, you need to learn how to analyze and understand the local market and keep an eye on national trends.
It can seem overwhelming and intimidating at first, but dedicating yourself to growing your baseline understanding of the real estate market in your area and learning about home values in your communities is through research.
The first thing to do in learning about the market is to read the daily market reports that detail inventory, time on the market, and selling price versus the list price. Understanding these essential elements will give you insight into the market trends you can share with prospects and clients.
Focus on what your potential client's needs and questions may be, and go from there. For example, if you’re working in residential, detached single-family homes, the average home will be 3-bed, 2-bath units. Studying the sale price and inventory in a particular geographic area that focuses on these basic parameters will quickly bring you up to speed and provide you with some background information when discussing your client's needs.
It’s necessary to go beyond the MLS, Zillow, and Redfin. Dive deep into your local real estate board newsletters, and state regulatory and industry news, as well as talk with other agents in your brokerage to gain insights they may have that are complimentary or differ from other market reports.
In the end, you want to be able to discuss the market with people and prospects confidently, and for your clients, you want them to have confidence in your role as an expert assisting them.
Set Up A Plan For Marketing
Creating a marketing plan that exists outside of whatever it is your broker may have established is crucial. Your broker is interested in their marketing and may or may not align with your needs.
To set a marketing budget, you need to discuss with other more experienced agents how they market, what is the most cost-effective, and what creates the greatest return on investment.
There are all types of marketing you can plan, from paying for leads to sponsorships, websites, social media, and more.
Think about your marketing in two ways.
- Your marketing should result in better brand exposure and lead generation
- Your marketing should create conversions
Sphere of Influence
Your sphere of influence is a collection of people that know you and respect what you provide. It can be a list of every person you contact, from friends and family, past business associates, the kid's teachers, coaches, or even other parents.
The goal is to network with everyone in a non-salesy way and to create a reputation that you are a knowledgeable, accessible agent to assist them in any way they need.
The goal of your sphere is to create a network that will help promote you when they come across people needing a real estate agent and are happy to refer to your services at that moment.
You want to strategically reach out and network with people, slowly building your reputation as a friendly agent and staying top of mind in your sphere.
Eventually, you’ll want to make the “ask” for help from your sphere, whether it’s for a referral or a review of your services from past clients.
Social Media
Creating standout social media posts and content takes a lot of strategic effort to pull it off well. So when thinking about your social media, use the 80/20 rule.
The 80/20 rule is that for every real estate transaction or request, post another 4-5 items that showcase something exciting and personable. Of course, you don’t need to make it about you and your family, but people don’t want to be inundated with a barrage of posts about homes for sale, mortgage rates, and other real estate items.
Instead, create engaging, fun posts about community events, highlight upcoming things around town that families and your prospects may enjoy, and then post a real estate item.
In other words, treat the content you create for prospects like you would your friends and not a transaction waiting to occur.
Capturing potential clients' information is crucial for your marketing efforts. For every interaction with a prospect, you should aim to collect email and phone information.
By capturing email information, you will be able to create a “drip campaign” that allows you to send out automated emails to stay in front of mind of your potential clients. Your drip campaign can include anything relevant to a broad audience of potential buyers, sellers, investors, or all of the above.
Farming
Advertising in a specific geographic area, like a neighborhood, is what is referred to in the industry as “farming.” Much like a farmer plants seeds, waters, and nurtures, only to harvest down the road, you should be planting seeds and nurturing prospects for future business.
To farm efficiently, you’ll want to do a variety of things. You should create an email drip campaign, sponsorships, and mailers. Anything you feel comfortable doing that aligns with your philosophy is what you should be doing to remind your “farm” that you are the go-to expert for that area and to stay on top of your mind when it comes time to jump into real estate.
Paid Leads
Paid leads are a double-edged sword in the real estate world. Paid leads are good to get you in front of a prospect, that is, at the bare minimum entering contact information on a website to be contacted by an agent for more details. Paid leads are an excellent way to expand your network and sphere, but they can become expensive.
An issue with many paid leads is that the quality of the lead can sometimes be less than ideal. You get a notification that a lead is interested, reach out, and get no response. Time and again, you don’t get any kind of response for the lead you just paid to have.
There are a few different reasons, ranging from the casual looky-loos to the agency you bought the lead from selling to multiple agents and the leads not exclusive to you.
The pros to paid leads are broader exposure to potential prospects, but the negatives of cost and not being exclusive to you can become very expensive in time.
Invest In Your Education
Taking time to increase your market knowledge and expand your understanding of the industry is a requirement for a new agent. There are plenty of things you don’t know that you don’t know. Only by expanding your education can you get a better grasp of the market and solutions to serve your clients’ needs better.
Mentors
Mentors are people that have been there, done that in the real estate field, and are willing to help new agents learn the ropes. Finding a mentor is a great way to learn about negotiations, writing contracts, and the flow of a transaction so that when the time comes, you’re better prepared to help your clients.
A good mentor should be an experienced agent, preferably from your office, willing to help you learn and grow as an agent. The relationship between you and your mentor is much like an apprenticeship, and it will need to be mutually beneficial.
Coaching
Every successful business person has employed a professional coach at some point in their journey to success. Likewise, investing in a real estate coach is a great way to catapult your business toward becoming a much more efficient enterprise.
A good coach has the experience you lack and can take a broad look at your processes and refine them to become more effective. Your coach will help you establish realistic goals and the necessary steps needed to achieve those, putting systems into place to help you perform at your peak.
Continuing Education
Just because you are licensed doesn’t mean your education is over. To succeed in any business, especially as competitive as real estate, you need to learn and have a growth mindset constantly. Your continuing education shows professionalism in your trade, exposes you to new strategies and processes and provides you with more significant insights you can pass along to your clients.
Starting as a real estate agent is relatively simple. However, succeeding in real estate is a whole other conversation entirely. Success takes strategic planning, time, and perseverance to overcome the crowded yet lucrative real estate industry.
