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Thinking about becoming a real estate agent? You're not alone. The Association of Real Estate License Law Officials (ARELLO) estimates there are roughly 2 million active real estate licensees in the U.S. today.
As a real estate agent, you can be your own boss, work with many different people, and enjoy the satisfaction of helping buyers and sellers navigate one of life's big milestones. There's also the potential to make a lot of money, which makes a career in real estate even more attractive.
How much do real estate agents make?
The median pay for real estate sales agents is about $49,000, according to 2018 data from the U.S. Bureau of Labor Statistics. The top 10% of agents earned nearly $113,000 that year.
Real estate brokers -- who have extra education, testing, and experience requirements -- typically earn more. The top 10% of brokers brought in about $164,000 in 2018.
Here's something to keep in mind about these numbers. Unlike many jobs with similar earnings potential, you can get into real estate without a college degree. Still, you'll have to invest some time (and money) if you want to become a real estate agent. Here's what to expect.
Research your state's licensing requirements
Estimated cost: Free
Even though real estate agents work in every corner of the U.S., there's no national real estate license. That means the first step to becoming a real estate agent is to research your state's specific licensing rules. Typically, each state has its own requirements for:
- pre-licensing courses
- background checks
- post-licensing education
- state licensing application
- testing and fees
To learn about requirements where you live, search online for your state's real estate commission website or use ARELLO's regulatory agency directory.
Take a pre-licensing course
Estimated cost: $300+
All states require you to take a pre-licensing course before you can take the real estate license exam. The course must be offered by an accredited real estate licensing school. Depending on where you live, the course may be online, in a brick-and-mortar real estate school, or at your local community college.
The required number of hours for pre-licensing courses varies by state. In Florida, for example, the course is 63 hours. But if you get your license in California, you have to complete three different courses (Real Estate Principles, Real Estate Practice, and an elective) that total 135 hours.
Do your homework to ensure you sign up with a reputable program. The better the instructors and materials, the more prepared you'll be for the exam -- and the faster you can start working as a real estate agent.
Take the licensing exam
Estimated cost: $325+
When you take the pre-licensing course, your instructor should let you know how to schedule, register, and pay for the licensing exam. Typically, the tests are administered by third-party testing centers. No matter where you take the exam, it will consist of two parts:
- A national section that covers general real estate principles and practices, and
- a state-specific section on your state's real estate laws.
The exam is multiple-choice, but the number of questions varies by state. You must get a passing grade on both sections to pass the exam. If you don't, you can retake the exam -- but pay attention to your state's rules for doing so.
If you pass the exam, you'll send in your application, fees, and any other required documents. Once your application is approved, the state will mail your real estate license certificate to you. Keep in mind that you can't practice real estate before your state's real estate agency issues your license -- even if you know it's on its way. To be safe, don't start working until you have that license in your hand.
Join a real estate brokerage
Estimated cost: $25 to $500+ per month
Real estate agents must work under the umbrella of a supervising broker. This person is designated by the office (and licensed by the state) to oversee real estate transactions and ensure that agents follow certain legal and ethical standards.
Depending on your brokerage, you may have to pay for "desk fees" (basically, rent for your office space), tech fees, marketing materials, and other normal business costs. You'll have other one-time and ongoing expenses as well. These may include license renewals, continuing education, membership in your local Multiple Listing Service (MLS), and lockbox fees.
Advance your career
Estimated cost: Varies
To increase your credibility and marketability as a real estate professional, you may want to pursue one or more of the various real estate designations and certifications, such as those for buyers’ agents and residential property specialists. It can also be helpful to become a Realtor. Realtors are members of the National Association of Realtors (NAR), the largest trade association in the U.S. As a Realtor, you'll have access to various benefits and tools, including market data, research, and statistics.
Eventually, you may decide to get your real estate broker license. This gives you more flexibility within the real estate industry and can lead to new career opportunities and increased earnings potential. Of course, each state has its own requirements for getting a broker license. If and when the time comes, check with your state's real estate commission for details.
Get Out What You Put In
A real estate career can be as flexible as you make it. You can take summers off, work just three days a week, or be home every day in time to meet the kids after school. The trade-off, of course, is that too much flexibility will make it harder to be successful.
While you can work on a casual basis, most successful real estate agents approach it as a full-time job. That means being available during business hours, on weekends, and any other time a client needs your help. Like many endeavors, the more time and energy you put into being a real estate agent, the more personal and financial success you'll enjoy.
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The richest in the world have made their fortunes in many ways, but there is one common thread for many of them: They made real estate a core part of their investment strategy. Of all the ways the ultra-rich made their fortunes, real estate outpaced every other method 3 to 1.
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