Should you Become a Real Estate Agent? was originally published by Harvard Business Review
In the past two years, careers in real estate have become popular. In the U.S. alone, between 2020 and 2021, there was a 60% increase in people obtaining their real estate licenses. Google Trends data shows that “how to become a real estate agent” was the most searched job in 2021. This comes in the backdrop of the Great Resignation, which has prompted millions to quit their jobs in search of better opportunities.
As a realtor who’s been working in the industry for more than two decades, I think this pique in interest is a result of the flexibility and autonomy that the job offers, especially as we recover from the effects of a global pandemic. Typically, a real estate agent is someone who helps people buy, sell, and rent homes, office or business spaces, or luxury properties. If you’re starting out as a real estate agent, you are, in a sense, self-employed. You set your own hours, find your own clients, grow your own network, and close your own deals. Apart from that, you’re involved in everyday activities, like identifying potential buyers, processing legal documents, coordinating showings, and creating marketing and advertising materials.
That said, a job as an agent also includes elements similar to a traditional nine-to-five: Most people work at a firm, collaborate with fellow agents, and find mentors to support them.
While it’s a flexible — and often, lucrative — profession, to build a truly successful career as a real estate agent, you need to understand the realities of the industry. For anyone thinking of pursuing this path, here’s what you should know:
You don’t need a college degree — but you will need (at least one) real estate license.
To become a real estate agent, the first step is often to obtain a license. A real estate license gives agents and brokers the legal ability to represent clients in the process of buying or selling properties. Every state in the U.S. has its own real estate commission for licensing, and each comes with unique requirements.
The overarching rule is that real estate agents must get a license in the state they reside in, or the state they wish to practice in. Unfortunately, you can’t be an agent in another state unless you obtain a license in that specific region. However, more recently, some U.S. states have become more lenient in their processes and removed these restrictions. For instance, if you live and practice in New York, Connecticut, or Pennsylvania, your license is valid across all three states.
When applying for your license, research the market to understand what opportunities you want (and could have) should you secure it. Here are some basic steps you’ll have to navigate in most states:
- Complete pre-licensing coursework from an approved real estate institution — either a school, an online learning program, or a state-run program. The number of hours you need to spend on coursework may vary from as little as 40 hours to as much as 150+ hours.
- After you complete — and sometimes during — your coursework, the real estate commission of your state will collect your biometrics (your fingerprint and other data), as well as a complete background check. This is done to ensure that all agents are accountable to the law.
- The final step is the licensing exam. Usually, you will be required to submit an application fee and register through your state or a third-party exam provider such as PSI. Some states even allow you to take your exam before you’ve completed the required coursework, which can help to expedite the process.
Successfully getting your real estate license can take anywhere between four to six months. The more time, effort, and hard work you put into the process, the easier it will be. You will likely have to take out time away from your current job (or school) to study and prepare for the exam.
Pro tip: If you know that you want to quit your current job and focus solely on getting your license, start saving now. This will help you manage your living expenses in the interim.
You need to be financially prepared to take the plunge.
Sometimes, real estate is portrayed as a “get rich quick” scheme, but that couldn’t be further from the truth. You can absolutely make a good living being a real estate professional. The average salary for a full-time agent in 2020 was $129,996. However, you won’t be earning this salary overnight.
Getting licensed requires upfront monetary and time investments — similar to paying for a college education before getting a job. From training and taking the exam to broker fees and marketing costs, new agents could face some hefty bills (though much less hefty than student loans). While some real estate companies will cover licensing fees, you may have to pay them back in the form of lower commission splits and checks.
So, evaluate your financial situation before you make any big moves. For example, if you’re living paycheck to paycheck, try your hand at real estate on a part-time basis. You can also begin saving more strategically by setting aside a fixed portion of your income over six months to a year before actually making the move. As a general rule, keep a six-month nest egg saved up before taking the plunge.
Pro tip: Remember that, as a real estate agent, your income won’t come at regular intervals. What you earn will be directly proportional to the sales you make. In general, learning how to budget, save, and invest is critical as you begin your career in this industry.
You need to build strong relationships within the industry.
Once you earn your real estate license, you are, in many ways, on your own. If you’re working in a firm, your peers and colleagues may help you get listing and find your footing. One of the best ways to learn and grow in this industry is to build strong contacts. Here are a couple of things you can do:
- First, find the right people to network with. Surround yourself with experienced peers and look for people who inspire you or can become your mentors. Start by joining a trade association, such as the National Association of Realtors, or attending a conference or webinar for new agents. When you’re in a niche business like luxury real estate, having a community of peers to consult with and learn from is even more vital. If you’re working for a brokerage firm, ask your office managers or the top performers for a coffee or lunch chat.
- Use your time with your peers and mentors to understand how they get work done, how they’ve carved their career paths, and what advice they’d give to someone who’s new to the industry. Shadow them during home showings and observe how they talk to people. Pay attention to how they negotiate with clients, especially the difficult ones. Get their feedback on the marketing materials you create — ask them about the right language or “keywords” to use, how they choose images for a property, and how to write a good newsletter or email copy.
Pro tip: Taking the time to build this network will teach you how to get things done, how to communicate effectively with different people in the business, and how to improve yourself as you grow in your career. These mentors and peers can also help you find potential deals, buyers, or sellers as you begin to establish your credibility.
You need to build a “sales mindset.”
Here’s the hard truth: At its core, real estate is about sales. You will sell homes, business spaces, or other properties. You may represent the buyer or the seller (or maybe both, depending on your state’s real estate laws). But for you to earn a commission, a transaction must occur.
Of course, there are other career paths in the real estate industry at large, and many of them are not strictly about sales — such as property managers, real estate attorneys, appraisers, mortgage loan officers, home inspectors, etc. However, understanding how “sales” works or how agents buy and sell properties is critical to performing all these other roles.
While you don’t have to be an agent long-term, building a “sales mindset” will help you advance. A sales mindset means that you’re fully aware of your client’s needs and are present during conversations. For agents, it means that you’re passionate about property, motivated to make an impact that benefits your clients, and can ensure that everyone feels satisfied with the final deal.
Building a sales mindset requires you to hone a range of transferable skills, including strong communication and negotiating abilities. You’ll need to put forth your point in a way that’s both assertive and empathetic. To build trust and inspire people, you’ll also need to be approachable and genuinely have your client’s best interest at heart. The trick is to listen to your client intently and be highly aware of what matters to them — and why.
Pro tip: Practice your negotiating skills with peers or mentors. The more comfortable you are negotiating deals with buyers and sellers, the more profit you’ll make. The best agents can think on their feet, find creative ways to persuade people, and resolve conflicts in stressful situations.
You have flexibility at work.
You are your own boss, and you do make your own schedule — even if you’re working at a firm. But that also means you — and only you — are accountable for following through on those tasks. To effectively manage your workload, cultivate discipline. Create a schedule with your daily goals and action items, plan your week or month in advance, and adjust your agenda as needed to avoid burnout. Your weekly checklist will likely include the following: find prospective buyers and sellers, update yourself on the latest real estate market news, set up open houses, make advertising materials, and find time to network or work on your professional development.
In this industry, many agents also work on the weekends — either showing properties or attending networking events. To really become successful, you’ll need to put in that time. According to McKissock’s real estate income report, agents making six figures worked, on average, at least 40 hours a week. Those who earn around $170,000 work 60 hours or more. The bottom line is that money is made by closing deals, and that means more consultations, more open houses, and more time spent negotiating, putting together contracts, and researching properties.
Pro tip: All that said, don’t burn yourself out to chase this version of “success.” You have the power to define what “success” looks like to you and create a sustainable work schedule that helps you find joy at (and beyond) your job.
Finally, you have to keep upskilling.
To get better at the job and advance in your career, don’t just rely on peers and mentors. Focus on continuous learning. Find new training programs for young agents, look into real estate schools focused on niche sectors, or attend webinars and short-term online courses to refresh your skills.
Unfortunately, most brokerages don’t offer to fund these opportunities. Most likely, you’ll have to pursue them on your own accord. But it’s worth it. To become a real estate agent, continuously improving your knowledge and building new competencies will aid your career growth by setting you apart from the competition.
My final advice: Make sure that you’re stepping into real estate for all the right reasons — and take the time to weigh in the challenges as well. When you’re a young professional or someone new to the industry, it can be tempting to focus on the big picture without creating a detailed plan or setting short-term goals. First, figure out why you wish to make the move, what you want to learn, and how you see your career advancing in this industry.
