Before we jump into the nuance of becoming an agent, let me point out that, the information in this is geared specifically to licensure in the state of Georgia (licensing requirements vary from state to state). However, many of the basic principles and strategies for succeeding in this business can be used by new (and veteran) agents/brokers nationwide. If you’ve never sold homes before and need a blueprint for success, you’ve come to the right place! At this point, you probably have many of the same questions I had before I started selling homes.
For example, you might be wondering: Exactly how do I get a real estate license? Which pre-license courses and post-license training is required? Can I take my real estate classes online? What are the pros and cons of being a real estate agent? What are the steps to becoming a successful REALTOR®? Are all real estate agents millionaires? Is there a difference between agents and brokers? Is my license good in multiple states (reciprocity)?
In this comprehensive blog post, I hope to answer all of your questions, and more! To help navigate all the information in this article, I’ve broken it down into eight basic steps/sections:
Research & Evaluation
Pre-License Classes, Testing & Activating Your License
Marketing, Tools & Online Presence (The Basics)
Lead/Client Follow Up Systems
Become A Local Real Estate Expert
Generate Lots Of Leads
Take Your Business To The Next Level
Learn more about the online training courses available from Real Estate Express.
Research & Evaluation
Running Your Own Business
One very important thing you’ve got to understand about being a real estate salesperson is that, you’re basically running your own business. This means you’ll need to treat your venture into selling real estate as a business; from day one. Unless you’re a salaried agent for a large team or a non-traditional brokerage (such as Redfin), you’ll likely be “employed” by a brokerage as a 1099 independent contractor. This means you set your own hours, cover your own expenses, and pay your own taxes, among other things.
There’s a reason so many businesses fail (real estate agents included). Most people don’t know how to properly structure and operate a profitable business from the start. Even if they did, they’re just not cut out for it in the long run. Before jumping into real estate, you should thoroughly research the costs, compensation models, competition, and brokerages in your area. You should also evaluate your current situation, your finances, and whether a career as an agent/broker fits your lifestyle needs.
A career in real estate can be quite lucrative and personally satisfying if everything is done the right way. According to the U.S. Bureau of Labor Statistics, the median pay in 2018 was over $50K per year, and the projected growth rate for the profession is faster than average (+7%). With a strong housing market, there’s plenty of opportunity available, so now’s a great time to enter the field and start building a business.
Research State Licensing Requirements
Before doing anything else, you should research all the requirements in your state for becoming a licensed real estate agent. The last thing you want to do is waste a ton of time learning, researching and eagerly preparing for a career that you are unable to embark on. Generally speaking, the barrier to entry is low for this profession; but there are some things that could prevent someone from getting a license. Typically, individuals must be 18 or older, have a high school diploma or GED, and be able to pass a background check.
Here in Georgia, the Georgia Real Estate Commission (GREC) administers the license law that regulates brokers and agents. They also oversee community association managers and property appraisers. As a regulatory body, the GREC’s role is to protect the public interest with rules & disciplinary powers designed to provide equal opportunity, promote free markets, and to deny incompetent and/or unscrupulous persons the right to practice.
Visit the Georgia Real Estate Commission’s website (or your state Commission’s site) to get up-to-date requirements for obtaining, transferring, or renewing a license. Review the application process and download all the forms you’ll need to complete and submit for approval. While you’re there, check out some of the other great resources the GREC offers, including: recent changes to the license law, monthly newsletters, how-to articles, forms & applications, a list of approved real estate schools, and more!
Getting into real estate will cost you money right out of the gate, so go ahead and get prepared for all the startup costs. Not only should you have these costs covered, but you should also have at least three to six months living expenses saved up. Remember, even if you put a buyer under contract on day one, you probably wouldn’t close the deal for another 30-45 days… and that’s realistically the best-case scenario. Can you go 45 days without a paycheck? Longer?
As I mentioned, you’re going to have some immediate expenses when you get started, here are a few you’ll likely encounter before you ever show your first home: pre-license training class, books/study guides, state exam fee, license activation fee, REALTOR® dues, MLS dues, broker fees, purchase lockboxes, headshots, business cards and basic marketing materials. This could easily add up to $1,000 or more, and this is just the bare minimum to get you going.
In addition, you’ll start getting multiple calls every day from every real estate related vendor out there, all pitching you the latest and greatest tools to help you grow your business. From CRM’s to online advertising, you can easily spend a number of hours per week fending off calls from telemarketing companies and deleting promotional emails & texts. In this business, it’s easy to go broke with all the bright shiny tools, so choose wisely which products and services you decide to use.
Transportation & Business Tools
Another thing you’ll need to consider is whether or not you’ve got (or can get) some of the core tools of the trade. These days, pretty much every good agent needs a reliable vehicle; especially here in Atlanta where public transportation is limited. Most successful agents put tons of miles on their vehicles each year driving from appointment to appointment. Some brokerages even require a certain level of insurance if you plan to be driving clients around in your vehicle.
You’ll also need a smart phone and/or access to a computer. More and more, real estate transactions are going digital, so you’ll need access to the internet one way or another. Some brokerages have offices for their agents with everything you’d need to run a successful business (meeting rooms, computers, copiers/fax machines, phones, scanners, etc.), so it just depends on which brokerage you hang your license with and whether or not you plan to work from home, or from your company’s office.
Learn About The Business
Before you jump in, I think it’s a great idea to learn what the business is all about. Get to know the good and the bad, the pros and the cons; the reality of life as a REALTOR®. It’s definitely not your typical 9-5. Working flexible hours can be great, but it can also bring about challenges. Be prepared to work nights and weekends… Because that’s when deals get made!
In my opinion, chatting with someone who has been in the business for a while and is open to having a conversation with you can be extremely helpful. Keep in mind, some brokerages heavily compensate their agents for recruiting new agents (think multi-level marketing), so always be cognizant of the person’s true intentions if they agree to meet with you.
If you can, find a successful agent (or two) and offer to take them for coffee or lunch. Talk to them about the upside and the downside of the business. What do they like about being an agent? What do they dislike? Ask about their experience thus far and what steps they took to have a successful career. However, don’t expect them to come out and tell you all their secrets. After all, you could be their future competition!
You can also pick up some excellent tips online, for free, on YouTube. There are countless agents, coaches and brokers with blogs and Vlogs; each offering their ideas on what it takes to be successful. You can find information on just about every aspect of the business, if you search hard enough. Again, be mindful of the person’s intentions, and don’t be afraid to be a little skeptical when it sounds too good to be true… Because it probably is.
Determine If You Want To Be An Individual Agent, Or Join A Team
One of the quickest ways to start making money as a real estate salesperson is to join a successful team. A properly structured team with all the right systems in place will put you on the fast track to closing deals and receiving a steady income. Joining a team can also help you learn the business from experienced agents doing lots of deals.
However, not all teams will bring on brand new agents. There’s a considerable learning curve when you’re new, and many teams don’t want to take on the burden of training a new agent and holding their hand throughout the first couple transactions. Also, as a member of a team, your cut of the commission will be a fraction of what an individual agent receives.
As an individual agent, you get a “bigger piece of the pie”, but you’ll have to generate all your own clients and work your own deals from start to finish. This could require substantial time and money to get things going, which could be detrimental if you don’t have the resources. Going the individual route is great if you’re self-motivated, good at sales and have plenty of self-discipline. It will allow you to brand yourself and build your own book of business.
At the end of the day, the real question is, would you rather have more deals right out the gate (with smaller checks), or start from scratch and get paid more per deal (when you’re able to close them)? Agents can be successful with either option, but there’s typically more upside as an individual agent (in the long run).
Timeline, Goals & Plan B
Without a realistic timeline, it’s entirely possible you can run out of savings before your business produces sufficient income to pay all your bills and business expenses. As a new agent in the business, you might know people who want you to help them buy or sell a home, depending on the size of your current network. This is what we call your “sphere of influence”. Your “sphere” will likely produce your first couple deals, but you’ll soon need to expand your reach outside your network to bring in additional business.
To stay on course and track your progress, you’ll need to set goals for yourself. If you’ve done your research, you should be able to come up with a realistic set of goals for at least your first year in the business. Write your goals down and revisit them often. These goals should serve as a means of accountability for you on a daily, weekly, and annual basis. If you don’t hit your goals, who will hold you accountable, and what financial repercussions might there be? How will you reward yourself when you do achieve your goals?
Sadly, most people aren’t successful when getting into real estate… In fact, most new agents will be out of the business in less than five years. How can this be? You might have done the math and thought to yourself – surely I can sell a couple homes per month! If you just close two $300,000 deals per month (earning a 6% commission), you’ll be making over $430K per year! With that kind of income, all real estate agents must be millionaires, right? Not even close.
According to the 2018 Member Profile put out by the National Association of REALTORS®, the median gross income of all REALTORS® in 2017 was $39,800. Not bad, even though the median business expense was $4,580. However, REALTORS® with two years or less experience had a median gross income of only $8,330. That’s right, 60% of members with less than three years experience made under $10,000. Therefore, you should strongly consider having a Plan B in place, just in case your career doesn’t take off as planned.
Create A Business Plan
Since you’re essentially starting your own business (as I mentioned earlier), you should go ahead and put together a detailed business plan. This document will outline your approach for success, identify your strengths and weaknesses, and clearly spell out how you will successfully run your business. This document will also define your goals (# of real estate transactions and/or sales volume per year) and create a path to success.
Fortunately, you won’t need to start from scratch when creating your business plan. You can find free examples online to help get you started. A few of my favorites are from: coach Tom Ferry, the National Association of REALTORS®, and Placester. Keep in mind, you may need to modify these documents/guides to reflect your individual strategy, techniques and goals. This unique plan should be based on how you plan to succeed running your business.
Once created, this should be your guide and something you refer back to on a frequent basis. You should stick to the plan you, but don’t be afraid to update it or make changes when you find things that work or don’t work. This document should evolve over time, but should always help you stay focused on your tasks and goals while keeping you accountable throughout the process.
Pre-License Classes, Testing & Activating Your License
Find An Accredited Pre-license Training School
Once you’ve decided to take the plunge and become a real estate agent, it’s time for school. To save you some time, I’ve put together a list of the best real estate schools in Metro Atlanta. There are plenty of others out there, as well, including online options. Some people are more successful with the in-class training versus the online, but it really comes down to your learning style.
The cost of the course and materials varies by school, so you should shop around. Some schools even offer scholarships and tuition credit to those who qualify, so make sure to ask. If you’ve already determined which brokerage you want to join once licensed, you may want to enroll in their pre-license training academy (if they offer it).
In your pre-license training, you’ll be learning about the ins and outs of practicing real estate sales in Georgia. As you’re completing the coursework, you’ll notice a pretty hefty focus on real estate law. This is designed to help keep you out of legal trouble… that’s if you follow the rules! You’ll need to complete 75 hours of salesperson training and pass the final exam at the end of the course, then you’re eligible to take your state test.
To help you pass the state exam, many academies offer an optional exam prep course (usually for an additional fee). This “cram course” is highly recommended if you intend to ace the exam on the first go-round. Sharpen your test-taking skills and brush up on the key ideas covered throughout pre-license training. Avoid over-studying the materials that may not be relevant, and double down on the concepts you’ll most likely need to know.
Interview & Test-Drive Brokerages
In my opinion, finding the right brokerage can greatly impact one’s odds of success in this business. Without the right training, tools and support, it’s very easy to exit the real estate business without ever selling a single property. Starting out with the wrong company could also lead to an expensive and time consuming re-brand down the road. So spend the time and pick the right company on the first go-round.
You’ll want to dig deeper than just monthly costs and splits (although very important). Here are a few important questions you should consider: What is the company’s culture like? What training is offered and is there an additional cost? Do new agents get support from the broker? Is there a physical office, or is everything done virtually? What tools are provided by the brokerage? Does the company provide leads, or is the agent responsible for generating new clients?
Keep in mind, when shopping brokerages, you’re usually the one interviewing them, not the other way around. Unless it’s a very small or boutique firm, the brokerage is typically looking to hire as many licensed agents as they can. So do your research and choose wisely.
When I got into real estate back in 2011, I was fortunate enough to have a trusted friend recommend I join the local Better Homes and Gardens Real Estate brokerage. I’ve been with them my entire career and don’t have any plans to leave. If you’re interested in learning more about the company, I’m happy to share my opinion (both positive and negative) of being a BHGRE Metro Brokers agent.