If you’re interested in being your own boss, making your own schedules, and having the flexibility in your workday to work as hard as you can and have a huge revenue potential, then real estate is for you.
Even if you’ve never worked in sales or know anything about real estate, getting into the business is easier than you think.
Getting started in real estate can be both exciting and nerve-wracking at the same time, especially if you don’t know what you have to do.
Like any business, there are things that you can only learn once you’re in the thick of it, so don’t worry about trying to know everything.
Here’s the truth: most real estate classes will teach you about the test material and suggest how to succeed. But you can’t learn how to be successful in a class, and those classes won’t teach you what you need to know.
I posted a short video on my YouTube channel about the 3 things I wish that I had known before I started my real estate career where I talk about how everything you need to know about real estate is not on the test, so my suggestion is just to study to pass your test and get started.
Real estate can be a profitable and lucrative business venture, but it requires skill, knowledge, and experience to succeed.
Knowing what to expect in the real estate industry is integral to success as a real estate agent.
It’s A Business – Go All In Or Go Home
There’s a lot that goes into working in real estate. First, as an agent, you’re working under a broker but as an independent contractor on a commission basis, meaning that you work for yourself and only get paid once you execute and complete a transaction.
Don’t be fooled. Many people are out there implying that real estate is easy and can be a part-time hobby. There’s truth to that little bit, but being in real estate takes a lot of time and dedication to see any profits, so if you’re approaching it as a hobby, you can probably find better alternatives.
Since real estate is a business, you need to approach it like one. To get started, you’ll need to get licensed, join a brokerage and the local MLS, start a business plan, and market yourself.
And getting started can be overwhelming for a beginner, which is why working with a mentor, somebody who’s been in the business for a while and can help teach you about the ins and outs, as well as show you some systems that have worked for them, will help springboard your own business.
Finally, straightening out all your tasks and duties, keeping organized, and staying calm will be challenging. But, a professional coach can help you create systems and organizations that will help you manage your business, have time for fun and family, and keep it from becoming too much for you.
To get started in real estate, you need to do the following;
- Get Licensed
- Choose a broker to work under
- Join your local MLS
- Understand the local market trends
- Find a mentor
- Hire a coach
- Create a business plan
- Market yourself
Get Licensed
The first step is to get a real estate license. This requires taking classes and passing an exam, which will vary depending on your state.
In general, you can expect to complete anywhere from 40-140 hours of instruction before you’d be eligible to take the exam but check with your state’s regulatory department about the specific requirements needed in your state.
The exam will consist of two parts, one that covers the federal requirements and a state one that covers the regulations, laws, and other compliance regulations needed to be active in your state.
After completing the coursework, you’ll need to schedule and pass your exam with at least a 70% or higher to pass. This exam will cost you money and require you to be able to sit for a few hours while the exam is conducted.
Apply for your license
Once you pass your test, you can apply to your state’s regulatory commission on real estate, pay the appropriate fees, and be assigned your license after a background check!
Choose A Broker
Once you have your license in hand, you need to settle on a broker to hang your license with. Hanging your license is the term for being under agreement with a broker in good standing that will act as an intermediary on their behalf for transactions.
There are a variety of brokers to choose from, including 1-person and small boutiques, large corporate brokerages, and even virtual brokerages to choose from.
When you’re looking around at various brokers, you’ll want to find the one that will support your business and provide a nice commission split. You should plan to interview and review a handful of brokers before settling on one, and during the feel-out process, ask them questions about the following;
- Commission splits
- Desk fees or other costs
- Office or hourly requirements for agents
- Support for agents, i.e., marketing, education, and transaction support
- Marketing and networking opportunities
- Preferred Vendors
You can choose to work with a small team or a smaller brokerage to get a better feel of the business.
Still, more experienced agents may choose a digital broker like EXP Realty which provides fewer resources but comes with lower costs and higher commission splits.
Join Your Local MLS
Once you’ve joined your broker, next you need to join your local MLS board. The MLS, or multiple listing service, is where you’ll find homes on the market and list and market your clients once the time comes.
Understanding The Different Types Of Real Estate
As a real estate agent, you need to understand the laws, market trends, and different real estate types to work with and represent your clients in the best way possible.
In addition, there are many specialized types of real estate, so it’s essential to understand the types of real estate on offer and make an informed decision.
There are a few main types of real estate you need to know about to work in the business that, include:
Residential Real Estate
Residential real estate includes single-family homes, condominiums, townhomes, and other dwellings. Individuals or families typically purchase these properties for their own use.
Residential real estate includes townhouses, apartments, condominiums, and single-family homes.
Investors in residential properties can be focused on rental income or capital appreciation, which is rental income from tenant payments and capital gains from a future sale at a higher price.
Working in residential is a long-term opportunity to work with the same clients years after the first transaction, so part of your marketing should be to keep in touch with past clients.
Commercial Real Estate
Commercial real estate includes office buildings, retail stores, warehouses, and other properties used for business purposes.
These properties are leased and often come with long-term leases that provide steady income.
Commercial properties include office buildings, shopping centers, industrial buildings, medical centers, hospitals, and other retail stores.
Commercial real estate's primary goal is generating a profit by either leasing these properties out for a high rental rate or increasing the assessed value to resell for a profit.
Industrial Real Estate
Another type of real estate is industrial property. This type is typically buildings such as large warehouses to store products they manufacture or import/export goods across international borders.
Companies lease or buy industrial buildings, so they don’t have to use expensive transportation costs associated with moving goods around different cities or countries.
Specialized Real Estate
A final type of real estate encompasses all other types consisting of mobile home parks, storage units, and land leases (e.g., cell phone towers). Agricultural, vacation rentals, and timeshares fall under this category as well.
Agricultural Real Estate: Agricultural real estate includes land used for farming, ranching, and other agricultural activities. These properties can be leased or purchased and often come with long-term leases.
Vacation Rentals: Vacation rentals are short-term rental properties that travelers typically use for vacation stays. These properties can be leased or purchased, and they often come with short-term leases that provide the owner with income during peak travel times.
Timeshares: Timeshares are fractional ownership of a vacation property. Owners purchase a certain amount of time in the property and then share the cost of maintenance and other expenses with other owners.
Knowing The Local Real Estate Market Trends
Understanding the local real estate market and its trends can help you make informed decisions when working in real estate.
Identify the Major Players in The Real Estate Market
Identifying the major players in the local real estate market is essential and could be a good source of referrals down the road. This list includes developers, investors, lenders, diverse industries that support it, and who is buying and selling property in your area.
For example, understanding who controls and influences prices will also provide insight into who dominates pricing and why certain areas may be undervalued at one point but dramatically increase in value over time.
Analyze Local Economic Factors
The local economy affects all facets of the housing markets, from home values to employment trends.
Pay attention to Important economic factors that include job growth or losses. Others have the median salary, debt levels (consumer and national), population growth or decline, consumer confidence (people must feel secure before making large purchases), inflation, and interest rates.
Understanding these trends will help give you insights into what may impact local housing prices and where you may find some clients. It will also help you to create a networking opportunity in the future.
Population Diversifications And Migration Patterns
Are people moving in, around, and out of your area?
This is known as population diversification and migration patterns and is vital for understanding shifts in demand for real estate within your city. Plus, knowing how and where people are moving from or to can help you reach out to other agents and create a referral network for your clients.
To understand these trends, look into if people from other parts of the country are relocating.
Are there education and job opportunities for people looking for homes?
Are there any regulatory changes? For example, has relocation become more accessible/harder due to changes in transportation networks, etc.?
Looking at local market trends that are above and beyond the average selling price and how long a home was on the market will give you a good idea of where you may find a deal to be made.
And what’s more, as you are positioning yourself to be the local expert, the more details you can provide a prospect about the going rate for a home and how local trends impact that, you’re creating a better perspective on your expertise.
Find A Mentor
Getting into real estate is easy. However, success in real estate takes time, effort, and strategy. You simply don’t know what you don’t know about the market, so working with a more seasoned agent will boost your business.
A mentor can show you what systems they have that work for them, what they’ve learned about the business, and where they think it will be headed in the future.
Hire A Coach
Balancing out all your tasks and juggling all the demands on your time can be stressful and overwhelming, which is where having an advisor like a coach is crucial. A coach will help you learn new ways to manage your time, build systems to make you more organized, and help with motivation when you hit that wall.
One time management technique that I believe in is the Pomodoro Technique. It’s a great productivity hack that helps you stay focused, have more energy, and be more productive.
It’s simple and works like this;
- Set a timer for 20 minutes
- Work on one task for that time until the alarm goes off
- Take 5 minutes to do anything that is not related to your last 20 minutes
- Repeat for 4-5 cycles of this, where you will take an extended amount of time (30 minutes) before setting a new Pomodoro cycle
Create A Business Plan
A business plan is one of the most important things you need for your business. Your plan should outline where you want to market, how you plan to grow, and your daily calendar and weekly appointment schedule.
With so many tasks on your plate, this is one area in which a coach can help you organize and stay on task.
Market Yourself
To be a business, you must have a business, meaning you need clients.
Well, guess what?
Nobody’s coming looking for you if they don’t know you’re in the business. So you need to plan on ways to market your services without coming across as too pushy.
One little trick I like is sending out 10 video text messages daily to my clients, family, and friends. Each video is unique and made for that person.
What I do is record a little video on my phone saying, “Hey, just a little video to say hi, thinking of you, happy birthday, anniversary,” or whatever it is that is personal to them. What I don’t do is tell them I’m a real estate agent.
Lead Generation
Leads are the lifeblood of your business; without them, you don’t have a business. So lead generation is part of your marketing strategy, but also, it’s part of any networking you’re doing.
Think about all the places you interact with someone that may be looking or know someone that does. These could be family, colleagues, past clients, parents of your kids, friends, teammates, etc.
Be creative with your lead generation. For example, you could sponsor youth activities, join community organizations, or do a holiday donation drive in your neighborhood; there are countless inexpensive ways to generate leads, but finding leads is crucial.
Build Relationships
Real estate is a relationship business. Before any transaction can be made, people want to know that you’re trustworthy and knowledgeable, so focus on helping people.
While strategizing on building relationships in your community, don’t forget to follow up with the ones you’ve already worked with or interacted with in the past.
Maybe the timing isn’t right now, but they may be looking in the not-too-distant future. Also, past clients may know of someone looking around, and by being top of mind with your past client, they may be more ready to refer you when asked.
Creating a business in real estate takes a lot of time and energy, but with patience and the right strategy, it can be a fulfilling, lucrative career.
