How to Get Into Real Estate
Table of Contents
Get a Real Estate License
Before someone can work as an agent in the United States, they must first get a real estate license. However, all states have different rules and standards for getting and maintaining a real estate license — there is no national organization or regulatory body that sets laws. In addition, if the new agent would like to work in more than one state, they will also need to look at each state's real estate reciprocity laws to see if they need to get multiple licenses for each state they practice in.
The first requirement for getting a real estate license is age and education. Most states require real estate agents to be at least 18 years old, but some states have a minimum of 19 years old. Most states will also require agents to have a high school diploma or GED, but some states don't have any education requirements. Because these criteria can differ, prospective agents will need to check their state's requirements to ensure eligibility.
Real Estate Education Requirements
Before sitting for the licensing exam, prospective real estate agents will need to go through specific education requirements and a pre-licensing course.
As an example, states will require between 40 to 180 hours of courses that cover real estate basics, such as:
- General property ownership
- Deeds (including the various types of deeds that can be used in that state)
- Titles and showing title
- Zoning regulations
- Environmental laws
- Market analysis and appraisals
Real estate classes are typically offered both in-person and online, so students can choose the format that works best for their learning style. Online courses offer students the benefit of working at as fast or slow a pace as they want, while in-person classes follow a more rigid structure that other students may prefer.
State Licensing Exams
Every state requires new real estate agents to pass a state licensing exam to get a license. The test requirements vary based on the state, but most exams will last 1.5 to 3.5 hours. There will also be a fee to take the exam, and this fee will vary depending on the state.
The test is multiple-choice, and it will cover various state and federal principles and laws related to real estate. The minimum score for passing also varies by state, but the requirement will always be at least 60%. If the student does not pass the exam, they will be required to pay for any subsequent re-takes. The fee for re-taking the exam is sometimes less expensive than the original fee, depending on location.
File the Licensing Application
The last step in the process to get a license is actually to apply. Applicants have to submit test results, proof of education completion, general application, and the application fee to be considered. Some states also require a background check, which typically takes the form of a fingerprint card. If a background check is required, applicants will either go to an approved testing site or do it independently and mail the card and appropriate forms to a provided address.
Fees for the license application are generally between $50 and $250, depending on the state, and applicants will also have to incur a fee for the costs of the background check if one is required.
Some states will also require Errors and Omissions (E&O) insurance before applying for a real estate license. This type of insurance protects the real estate agent from lawsuits and other financial losses while working as a real estate agent. Some brokerages will provide E&O insurance or provide the opportunity to obtain it at a lower cost.
Join a Brokerage
Some agents may want to start working independently immediately after receiving their real estate licenses. However, most states require new agents to join a brokerage and work with that brokerage for a designated amount of time before they are allowed to work on their own. While some agents may be disappointed by this, working with a brokerage provides many advantages agents can't get anywhere else.
The brokerage will give real estate agents information, resources, and access to experienced professionals in the area. This team of people will provide the inside scoop on the real estate market in the area nearby, which offers a leg up compared to operating independently. Finding a mentor from this group can provide invaluable insights and help new agents create a successful career in real estate.
Working with a brokerage can operate as an apprenticeship, in a way. Agents can train with or under experienced professionals for a period of time and then break out on their own later if they want to do that. This initial interaction helps create relationships that will often stay with the new real estate agent throughout their career.
What to Look for in a Brokerage
Not all brokerages are created equal. Agents should take the time and effort to find a team that fits their personality and the goals they are trying to accomplish. Agents do not have to choose the first brokerage that they speak with — instead, interview several options to find the best fit.
Below are just a few characteristics that new real estate agents should consider while working through this process:
- Size. The size of the brokerage will often determine the resources available, but not always. A large office with many people will certainly have more daily action, but a smaller office might be the right option if a new agent craves a more intimate setting with other agents. There is a lot to be said about "brand name" recognition that some larger offices have, but that type of environment might not be the right fit for everyone.
- Reputation. How the public views a particular brokerage should be a huge part of the decision-making process. If the brokerage does not have a good reputation, any agent may take on some of that reputation by joining them.
- Office Culture. How the office makes a new agent feel should also be considered when choosing a brokerage. Some are very laid back, while others are more "suit and tie." Each certainly has its place, and new agents should choose one that fits their personality and goals when they come to work every day.
- Training/Mentor Programs. Some brokerages build up good mentoring or training programs that are very useful. Others use more of a "fly by the seat of your pants" training method. Some people like the excitement of just getting out into the world of real estate with little guidance, while others want a little more training and information before they get started.
Ultimately, agents have to review their options and determine the traits that are important to them. Be sure that any brokerage being considered meets or exceeds those expectations.
Brokerage Red Flags to Avoid
Some brokerages operate as just a massive conglomerate of people, but they do not provide any real resources or benefits. Instead, everyone essentially operates independently but has their name listed with the brokerage because they must. This type of brokerage really will not help a new real estate agent achieve their goals. It lacks the necessary cohesiveness to get started on the right foot.
But, how can a real estate agent know when a brokerage really is not what they want? Look for these red flags:
- They don't do much advertising.
- They do not respond to inquiries, or they are very slow to return calls or messages.
- There is a general lack of resources.
- Little or no management support or administrative support.
- Lack of general "team spirit" or enthusiasm in the workplace.
In general, if a brokerage provides little or no response after an inquiry, look elsewhere. Real estate agents want to partner with a group of people who will make life easier, not someone who will only cause headaches.
Take the time to find the right fit, and the brokerage can be a great resource throughout an entire career.
Find a Mentor
Real estate is all about relationships. Agents get leads and new contacts from relationships, so ongoing relationships with current clients are vital. However, a relationship with a mentor is sometimes overlooked—but this is a mistake.
A good mentor will share their insights and knowledge, teach their mentee how to capitalize on their skills as a real estate agent, and generally point new agents in the right direction as they get their footing in this new career. They can also share sales advice, best practices, and are available to "talk shop" with someone who knows the ins and outs of the real estate business.
Having someone who is at least a few years more experienced will be helpful. Anyone willing to take the time to work with a new real estate agent and share their insights can be a good fit.
Sometimes relationships with more experienced real estate agents just happen and flourish. However, it's more likely that new real estate agents will need to find a mentor actively. Simply asking someone who would be a good mentor out to coffee can be an excellent way to start this type of relationship.
Many brokerages have "built-in" mentoring or training programs, and these can be a great resource. Otherwise, a brokerage may also provide a few avenues to meet "would-be" mentors. Agents who are not yet affiliated with a brokerage may want to attend a local networking event where they can meet the big real estate names in their area.
Breaking into the real estate business can be challenging, but new real estate agents can be well on their way to a rewarding and successful career with the right resources and information.