How to Start Your Career in Real Estate

You found this page, so you may be wondering:

Why should I become a real estate agent?

When I walked out of my pre-licensing class, I couldn’t help but think, “Wow. I wish I knew all this before I bought my first home.” There are so many reasons to get a real estate license. Investors get valuable knowledge and access to properties, builders can buy and sell their own properties, and of course many people launch their careers as real estate agents. The licensing process is quick, inexpensive, and convenient compared to many other careers of this caliber. For many, real estate becomes a career that is rewarding both financially and socially. Agents are trusted confidants who are more closely related to matchmakers than salespeople. They help people build wealth and security. The whole business is based on relationships. Real estate is an adventure, with the agent as the tour guide. No two transactions are the same and having the knowledge to solve problems while bringing people together can be incredibly fulfilling. And yes, some even make a very nice living in the process.

 

How do I get my license?

Every state and territory in the U.S. is different, but almost all have the same basic process:

1.     Complete a Pre-Licensing class that has been accredited by the state authority

2.     Sign up to take an exam and pay an exam fee

3.     Pass the exam (usually 2 parts of the exam: state and national)

4.     Send the passing exam results along with an application for licensure along with licensing fee to the state authority

5.     Decide where to “hang” your license. This could be with a real estate brokerage, a holding company (also known as referral company) or you could make it inactive and leave it with the state authority.

You must take the state-specific class and state-specific test to conduct real estate business in the state where you wish to operate. Licenses are not transferable from state to state. 

 

Where can I get information on state accredited Pre-Licensing classes?

Here in New England, each state authority accredits Pre-Licensing schools. Many schools have webpages that post the costs, schedules, and ways to register  

More information about Pre-Licensing can be found from the state administrative authorities: 

 

How much will it cost to get me up and running in my real estate career?

The cost to start your real estate career is variable, depending on where you want to practice real estate. Expect to pay around $2,000, which is not much when compared to getting other professional licenses or a professional degree. 

Here is the breakdown:

  1. Pre-Licensing Class: $200 - $600

  2. Exam Fee: $100-200

  3. License Fee: $100-200

  4. REALTOR(R) Initiation Fees: $500-$1,000

  5. Brokerage Fees: $0-$1,000/month (hint: avoid brokerages with high desk fees until your sales volume is established)

In addition to the things listed above, you will need a:

  • reliable car

  • cell phone with a good camera

  • computer and internet connection

  • printer/scanner

How do I choose the best real estate class for me?

You will be in class with this instructor for 40-60 hours (depending on your state). Look at the class schedule and an even closer look at the instructor. Choosing the right instructor is critical to helping you pass the licensing exam. Does the instructor have real estate experience? Do they hold a real estate license and if so, are they a Salesperson (the entry level license) or Broker (the more advanced license)? What is their teaching experience? What are their qualifications to teach? Can you see student reviews? Another good thing to do is ask any real estate agent friends you have if they can recommend an instructor. Many pre-licensing instructors also teach continuing education classes, so real estate licensees get to know quite a few instructors in their area.  

Surprisingly, price is not always a good predictor of the quality of the instructor. For example, Bean Group University employs actual university professors with decades of training and experience to teach our courses, and yet we are among the most affordable options available. You want an effective instructor who teaches well and has a track record of high pass rates for the licensing exam.

 

What do I need to pass the licensing test?

A good pre-licensing class will provide you with a practice test (or two) and go over the entire test process. It is important to answer the multiple-choice questions at the end of each chapter in the real estate book provided by the instructor. The testing company may also sell practice tests. This is one of the most important things you can do to prepare for the test: practice, practice, practice.

Passing grades are generally 70% or 75%, depending on the state.

Once you complete your state-accredited pre-licensing class, you can take the licensing exam! The test is administered by a professional testing company and requires a separate registration. NOTE: You cannot take the test until you have fully completed the Pre-Licensing class.

Information about the licensing exam can be found here: 

a.     Connecticut Department of Consumer Protection uses PSI Services to administer the licensing test.

b.     Massachusetts Board of Registration of Real Estate Brokers and Salespersons also uses PSI Services.

c.     Maine Real Estate Commission uses Pearson Vue.

d.     New Hampshire Real Estate Commission also uses PSI Services.

e.     Rhode Island Department of Business Regulation uses Pearson Vue.

f.      The Office of Professional Regulation in the Vermont Secretary of State’s Office also uses PSI Services.


What happens after I pass the test?

Submit your test results, application, and licensing fee to your state’s real estate authority. You may not start working until your license has been issued, and you need to name a real estate brokerage to hang your license before it can be issued.

How do I find a brokerage to hang my license?

Interviewing for a job in real estate is a little different than other jobs. YOU interview the brokerage as much (maybe a little more) than they interview you! Every brokerage is different and there is no one-size-fits-all brokerage that is the best fit for every agent. Here are some things you should find out before deciding where to hang your license:

 

Do they belong to the REALTORS® organization? 

If you want to be an agent that sells residential property, you may find the Multiple Listing Service (MLS) to be an indispensable tool. Would you have access to the MLS? The local MLS is most likely affiliated with the state or region’s REALTOR® organization. 

The National Board of REALTORS® along with state and local boards adhere to a Code of Conduct and Standards of Practice that go above and beyond state laws to protect the consumer. Many consumers look for the tell-tail R badge before hiring an agent. Brokerages do or do not belong. If they do belong, then the agents who hang their license with that brokerage must also belong. If the brokerage is not a member of REALTORS®, then their agents are not either.

 

Desk Time

Before the advent of the internet, real estate agents got their leads by sitting in the office. It was a privilege to sit at the front desk, answer calls and greet people who walked in. That was how agents got leads. Today, most buyers and sellers go online and many never use the phone to communicate with their agent. Still, some brokerages assign hours to their agents to answer phones and sit at a desk. The effectiveness of desk time has fallen over time. Some agents still value desk time, while others prefer to get leads online. What would you prefer?

Commission Splits and Fees

One thing you learn in pre-licensing is that sales agents are actually agents of the Principal Broker, not the client (although we work hard for the client). Any commission that comes from sales goes to the broker, who in turn splits that with the sales agent(s). How do the splits work? Every brokerage is different. 

One brokerage may keep 55% of the commission from a sale and give 45% to the sales agent. As the agent gains more experience, the split may become more favorable to the agent. Another may share 65% with all agents. Some commission splits get better after a certain number of transactions. Sometimes those reset to the lower split every year. Another brokerage may give the sales agent 100% of the commission BUT take a large monthly desk fee. There may be transaction fees, tech fees, consortium fees and so on.

It is important to fully understand the commission splits and fees associated with each brokerage you are considering. 

Brokerage Offerings

There is a reason why brokerages don’t simply hand 100% of the commissions collected over to the sales agents. The brokerage provides important services to the agents. There may be mentoring, training, continuing education, high-tech lead generation tools, property signs, copying, business cards and the all-important Errors and Omissions Insurance among other things provided. Get to know what is provided for free, reduced cost, or full cost.

The two most important offerings in my opinion are lead generation/CRM and training/education. OK, that sounded like four offerings, but they are usually lumped into 2 systems. You need leads to have clients to close transactions to get paid. Does the brokerage support you in generating leads or are you on your own? The leads have to go somewhere, so a solid Customer Relationship Management (CRM) system is important to organize, schedule, and just keep track of the leads that come in. If lead generation and CRM are integrated systems, it makes life much easier.

Training and education are also vital. Training helps agents master important tools for their business. Education, or specifically state accredited Continuing Education helps agents provide for and protect the consumer. Continuing Education is required to renew real estate licenses (generally every 2 years or so). Sometimes training comes in the form of a mentoring program. A good mentoring program can be the difference between a new agent struggling vs flourishing as they start a career in real estate. There are so many forms and protocols, deadlines and systems to take in at once. Having a trusted ally to guide the new agent through a few transactions makes a huge difference. Mentoring programs generally take a small piece of the commission to compensate the mentor. You should know if that piece comes out of your commission and if so, how much.

Some brokerages may offer multiple sources of income, like profit-share, revenue-share, mentoring commission, and referrals. Does the brokerage offer other streams of income, and if so, how do they work? Are some “locked” until a certain goal is reached? What kind of environment do the revenue streams create? (Would you still be the caring matchmaker, or would you venture over to the pushy salesperson arena?)

Area of Operation

A real estate licensee who hangs their license with a brokerage can only practice real estate where they are licensed AND where their Principal Broker is licensed. If you are thinking of getting a real estate license from more than one state, make sure the Principal Broker you are interviewing is licensed in those states.

So, to sum up here, in this job interview, you should be professional as in any job interview, but keep in mind this is a 2-way interview. Make sure the brokerage offers what you need to succeed, and the commission split is justified by the services you will use. Ask:

1.  Are they REALTOR® members?

2. Do they require desk time?

3. How are the commission splits structured?

4. Are there fees? How much, how often, on what?

5. What does the brokerage provide to agents and what is the cost?

6. What lead generation and CRM systems are offered?

7.  Is there training and education?

8.  Are there other income streams and how do they work?

9.  What is the brokerage’s area of Operation?

Can I use my license in other states?

Yes and no. You may only practice real estate in the state where you are licensed. If you completed a Massachusetts Pre-Licensing class, you then take the Massachusetts Real Estate Salesperson Exam from the Massachusetts-authorized testing center. Then you can hang your license with a Broker who is also licensed in Massachusetts. At this point, you may not practice real estate in Rhode Island or New Hampshire or any other state.

You may want to be able to practice real estate in another state, especially if you live near the border of that state. Can you do that? Probably, once you get your license in that neighboring state. The good news is that most states have reciprocity agreements with their neighboring states (and sometimes other states as well). Go to the real estate authority for the state where you want to get licensed and see what steps you have to take to get a reciprocal license.

Here are links to the various state authorities where we operate:

a.     Connecticut Department of Consumer Protection

b.     Massachusetts Board of Registration of Real Estate Brokers and Salespersons

c.     Maine Real Estate Commission

d.     New Hampshire Real Estate Commission

e.     Rhode Island Department of Business Regulation

f.      Vermont Office of Professional Regulation

If I am licensed in more than one state, do I have to hang all the licenses with a single brokerage?

This is a question for the Principal Broker where you want to hang your license. Some Principal Brokers may let you hang your license from other states with different brokerages, but many won’t. The reason brokers don’t like to employ agents who hang their licenses with different brokerages in different states is that they may assume liability for that agent, even if they are doing business in the other state under the brokerage umbrella of the other brokerage. Things could get messy if say a buyer client is looking at property in City A, then wants to see a property in City B that happens to be across the border in the other state.

The good news is that many Principal Brokers are licensed in multiple states for this very reason. If you are interested in having multiple real estate licenses, ask where the brokerage is licensed and make sure they operate in the states where you want to work.

 

What kind of income can I expect from a career in real estate?

Real estate incomes are incredibly variable. There are part-time and full-time agents and property values vary dramatically from location to location. Most real estate licensees work on commission (and even those are highly variable). Dedicated full-time agents can make a six-figure annual income. Others may dabble and only make a few thousand dollars a year. A few make seven-figure incomes. The key is treating the job, well, like a job. New agents should hang their license with a brokerage that offers support and training - and take full advantage of the training. The other key element is to use a good lead-generation system. Many brokerages offer robust systems that keep your pipeline full and help you to serve more clients.

Is there room for career advancement in Real Estate?

Absolutely! New licensees start out as Salespeople and work under the umbrella of a Principal Broker. Every state is a little different: Maine requires all Salespersons to advance to Broker within 2 years for example. Other states let real estate licensees remain Salespeople as long as they like. For those wishing to advance, they can stay a Salesperson and grow their business, hire assistants, join or lead a team, etc. Some Salespeople move on to take more education and the Brokers’ Exam. With a Real Estate Broker license, the licensee may keep doing what they were doing (only now with a fancy new title), or choose to become a branch manager or open their own brokerage. Every Principal Broker of a large-scale brokerage started as a Salesperson and Salespeople have that potential to grow their businesses up to the brokerage level!

Career advancement potential is only limited by a person’s motivation and creativity.