Things to Consider Before Starting a Career in Real Estate
A career in real estate can be both rewarding and challenging. Some people earn six figure salaries, others just a few thousand a year. While a career in real estate can be challenging, flexible, and exciting, it’s not for everyone. Here are some things to think about before you get started in your new real estate career.
Working for Yourself
As a real estate agent you are essentially working for yourself and, while that may sound like a wonderful alternative to having a boss, there are things to ask yourself to determine if you have what it takes to be your own boss. Before you start any new business, you should make sure you have the right character traits to work for yourself. You should be ambitious, organized, dedicated, persevering, friendly, and goal oriented.
A career in real estate means that you will set your own schedule, but you will need to be organized and ambitious enough to actually work on your business every day. Most real estate agents don’t make huge commissions during their first year, as it takes time to build a client base and get accustomed to how the business works. You should ideally have 6 months to a year’s worth of living expenses in the bank to provide a cushion while you build your business. A great real estate career does not happen overnight.
How Much Money Can You Make?
Isn’t this the most important question when wanting to start a new career? Most real estate agents are paid completely on commission. In residential real estate, the seller typically pays around 6% of the sale price to the agent(s) who handles the sale. The two agents split the commission, then that amount is split with the broker. So say an agent has a house listed for $100,000, and another agent shows the home and his clients decide to purchase. After the transaction closes, the listing agent receives $3,000 and so does the buyer’s agent. Both agents work on an 80/20 split with their broker, so each agent receives a commission check for $2400.
What You Need to Get Started
- A Real Estate License: You will need to attend a training course and then take a state exam.
- MLS Access: The Multiple Listing Service (MLS) is an online tool that allows agents to find properties for buying clients. The MLS charges a monthly fee for access.
- Computer: Ideally a laptop that you can take with you to the office or client meetings.
- Smart Phone: You will be on the phone a lot. You’ll need your phone to keep track of appointments, and get pertinent information from appraisers, home inspectors, and loan officers. You will want to have a phone with GPS to find your way to the listings.
- Car: While you don’t need a fancy car, it should be in good working condition.
- Business Cards: While many people don’t use these anymore, they are a staple for real estate agents.
- Clothing: Dressing professionally is important in the real estate business. Invest in some nice suits, quality shoes and accessories so that you’ll look nice and feel confident.
Does real estate sound like the profession for you? It can be very rewarding if you are willing to put the time and energy into your business. Contact a real estate school and begin your journey today!