Are you planning to start a side hustle or make your career as a realtor or real estate agent? Well, why not! It is considered one of the highest-paying professions. It is not hard to become a realtor, but making money is a bit of a struggle. However, if you have cleared the struggle part, being a realtor will benefit you highly in monetary terms.
Some of the perks of being a realtor are being your own boss, helping people make one of their dreams come true, meeting new people, and much more. Still, that doesn’t mean it just has a good side. So, let’s come to the point and see how hard is it to make money as a realtor.
Before anything, let's understand the difference between both — a realtor and a real estate agent.
Are real estate agents and realtors the same?
Undoubtedly, real estate agents and realtors are both professionals who work in the real estate industry and sell houses, offices, and other spaces. They are often used interchangeably, but there are some differences between the two.
Real estate agents are licensed professionals who assist clients with buying, selling, or renting properties. They have passed a state real estate exam and are authorized to practice real estate within their state. And they typically work under a licensed broker and earn a commission on the transactions they facilitate.
In contrast, a realtor is also a real estate agent but also a member of the National Association of Realtors (NAR). It is a professional organization for real estate agents, and all members must adhere to its code of ethics and standards of practice. In addition to that, realtors also have access to additional training and educational opportunities.
So, realtors can be real estate agents, but not all real estate agents are realtors.
Becoming a realtor is a voluntary choice, and it requires agents to meet additional standards and pay membership fees.
Now, let’s see how you can become a real estate agent!
How do you become a real estate agent?
As mentioned above, you can become a real estate agent after passing an exam. Here’s what your journey would look like becoming a real estate agent. Also, keep in mind, there’s no national or international real estate license. So, you’ll have to adhere to and meet the unique real estate licensing requirements of the state you are in.
- Meet the eligibility requirements
The eligibility requirements vary by state, but generally, you must be at least 18 years old, a legal resident of the United States, and have no felony convictions. - Complete a pre-licensing course
Before taking the real estate licensing exam, you need to complete a pre-licensing course. The length of the course and the topics covered vary by state, but it typically takes around 60-90 hours to complete. - Clear the real estate licensing exam
After completing the pre-licensing course, you need to pass a state-administered real estate licensing exam. The exam tests your knowledge of real estate principles, practices, and laws. - Get fingerprinted and undergo a background check
Many states require real estate license applicants to be fingerprinted and undergo a background check. - Obtain sponsorship from a licensed broker
In most states, you must have a licensed broker sponsor your real estate license application. The broker will be responsible for supervising your real estate activities. - Apply for your real estate license
Once you have completed all the requirements, including passing the exam, fingerprinting, and background check, you can apply for your real estate license through your state's real estate regulatory agency.
After becoming a licensed real estate agent, you can then start working with clients to buy, sell, or rent properties. It is important to note that continuing education is often required to maintain your license and stay up-to-date with changes in real estate laws and regulations.
How do you make money as a realtor?
Making money is important, whether it is as a realtor and real estate agent or any other profession. You can say it is a bit hard to earn money constantly in this profession as the real estate market is fluctuating. Even taking up a job won’t guarantee a paycheck regularly. So, what’s the solution?
As a realtor, you make money by earning a commission on the sale or purchase of a property. The commission is typically a percentage of the sale price and is split between the buyer's agent and the seller's agent. Here's how it works:
Listing agent commissions: When a seller hires you to sell their property, you will typically negotiate a commission rate with them. This commission is usually a percentage of the sale price, such as 5-6%. When the property sells, the commission is split between the listing agent (you) and the buyer's agent.
Buyer's agent commissions: When you work with a buyer to purchase a property, you will typically receive a commission from the seller's agent. This commission is also usually a percentage of the sale price, such as 2-3%.
It's important to note that real estate agents do not receive a salary or hourly wage. Instead, as said, they earn their income through commissions on successful transactions.
This means that the amount of money you make as a realtor can vary widely depending on the number and size of transactions you complete. Additionally, some real estate agents may charge additional fees for services, such as marketing or advertising.
So, let us give a satisfactory and explanatory answer on how hard it is to make money as a realtor – it is hard but with the right practices, you can earn a hefty commission.
Here are some ways to make money as a real estate agent:
1. Market yourself
When you plan on moving forward with a real estate career, the very first skill you should have instilled is marketing yourself. Here you will have to market yourself at the start. You can also affiliate yourself with a well-known and reputable company or a broker. Don’t hesitate to ask your clients to give your referral to others.
2. Become a referral agent
You can also start by becoming a referral agent. What is it? A referral agent is someone you send their clients to the broker they trust and know. The other agent does all the processing and transactions. As soon as the transaction is completed, you will receive a share of the commission.
3. Work open houses
Work at or on open houses. The new home buyers typically start by attending open houses. So, you can meet your potential client while assisting at an open house. You can ask agents or brokers for letting you assist at their open houses.
4. Build your brand
Another important thing is building your brand. Not a company, but your personal brand/name brand. For this, you might need the capital to invest, but once you have built the brand and people know you as a real estate agent or a realtor, you will get to show and sell more houses and office spaces.
5. Invest in real estate
As a broker or agent, you can also become a real estate investor, invest in properties, flip them, and then sell them to potential buyers. With this, you will be able to earn more profit and gain a name in the real estate industry. Also, as you are a real estate agent, you will be notified first once the listings are open to the market.
6. Build your network with builders and lenders
This is another essential thing to do. When you network with builders and lenders, you already have a property in your hand. All you have to do next is find the potential buyer, do the transaction, and earn the commission. If someone is interested in buying a residential or commercial space, they may ask you to show them more properties before finalizing one. Hence, building your network with builders and lenders will benefit you in many ways.
7. Use your credentials or knowledge
If nothing, you can also use your knowledge to earn money. How? Through educating, training, consulting, or writing for websites. As you have passed the real estate exam, you can become a mentor or trainer for agents and real estate schools. You can use the same knowledge for consulting and writing real estate blogs for websites.
FAQs about real estate career
1. How long does it take to make money as a real estate agent?
As per the article on Realtyna, on average, it takes six months for a real estate business or agent to make money.
2. How much money do real estate agents make annually?
As per the statistics on the Bureau of Labor Statistics, real estate agents on average make $45,990 annually.
3. Is the real estate career dying?
Definitely not. A real estate profession isn't a dying career, but instead a booming one. Professional real estate agents are increasing and are projected to rise by 4% by 2030.
Bottom Line
To sum up the article, the real estate profession will need you to give time as well as capital. However, in the long run, it will definitely give satisfactory returns. So, if you have already made up your mind about becoming a real estate agent or a realtor, hold on to that and work harder. Keep in mind the tactics we mentioned for making money in a real estate business and you will no longer find it hard to earn money as a realtor.
