Real estate professionals help people make one of the biggest decisions they have to make in their lives, which is purchasing a property. Now, buying properties isn't like buying a pair of shoes. Properties just don’t pop out of the blue, and they are limited in number. The housing market is also excessively volatile, which means that house prices continuously and unpredictably rise and fall. That’s only a glimpse of how challenging a real estate career is, but the benefits that one reaps out of it are all worth the hard work and effort.
Real estate is both a versatile and exciting industry to get into. Those whose professions revolve around real estate can attest to the fact that it’s pretty challenging at first yet rewarding in the end. If you’re looking into getting a career in real estate, then read on to know more about becoming a real estate professional.
- I. The Basics of Real Estate
- II. Responsibilities of a Real Estate Agent
- III. Perks of Being a Real Estate Agent
- IV. Steps in Becoming an Agent
- 1. Saving for Expenses
- 2. Licensing
- 3. Choosing a Brokerage
- 4. Seeking Training
- 5. Creating a Business Plan
- . 6. Building a Client Base
- V. The Bottom Line
The Basics of Real Estate
Real estate or real property often gets mixed up with personal property. Personal property refers to movable property, which excludes buildings and lands. It includes tangible assets, such as furniture and appliances, and intangible assets, such as copyrights and investments.
Real estate, on the other hand, is a type of real property. While real property sounds a lot similar to real estate, the two concepts have a few differences. Real property is more of an umbrella term that encompasses a broader scope of property and rights. It includes land, buildings, and all improvements made to the land. It also covers the right to use a specified area of the property. An example of this is that leaseholders are allowed to occupy certain parts of a building. This right, however, isn’t covered under real estate.
Real estate only refers to the physical property, like the land, its natural resources, and its human-made improvements, such as buildings and fences. Under real estate, there are three basic categories: residential, commercial, and industrial. Essentially, residential real estate is what we inhabit. There are detached dwellings or single-family houses and multi-unit dwellings, such as apartments, condominiums, and townhouses. Offices and malls fall under commercial real estate, while factories and mines are categorized under industrial real estate.
Apart from these three basic categories, there are real estate niches in which agents specialize. Some examples of these niches or property market sectors are condominiums, luxury property, income property, and farms.
Responsibilities of a Real Estate Agent
These real estate properties don’t sell themselves—this job calls for the skills of real estate agents. These agents can be considered mediators between buyers and sellers in the real estate industry. Also, they do a bit of everything. They sell, negotiate, market, auction, analyze the market, and give advice. At times, they also appraise and calculate loans. Given all these responsibilities, they work extra hours and even work on weekends to meet clients. However daunting it might all sound, hard work does pay off in the end, and the day-to-day responsibilities of agents can appeal to aspiring real estate professionals.
1. Working for Sellers
When properties are up for sale, sellers seek the help of real estate agents. Not only do agents enter property listings into an online database, but they also appraise or assess the monetary values of properties in the current market. After that, they market properties through different media, the most common of which is through websites. They then prepare properties for showings or open houses and entertain interested buyers. When a buyer offers to purchase a property, the agent makes the offer to the seller so that the two parties can reach a fair agreement. Real estate agents also process the purchase agreement, contracts, and other documents that need to be prepared.
2. Working for Buyers
Although real estate agents are allowed to work with both the seller and the buyer, they mostly work for only one party. Agents working for buyers are responsible for helping people make serious, long-term investments. They find out the buyers’ preferences and help them find properties based on those preferences. They also provide them with advice on properties, loans, and mortgages. Once a buyer decides to purchase a property, the real estate agent negotiates with the seller to get the best price. Agents also work on property inspections, appraisals, and important documents, such as insurance and deeds.
Perks of Being a Real Estate Agent
The primary reason why people get into a real estate career might vary from one person to another, but the most common one is becoming one’s own boss. Working in real estate can feel liberating. Real estate agents are independent contractors, so they make their own business decisions, schedules, and methods. They also manage their time, so they can go on vacation as a reward for selling that seemingly unsellable property. Most agents work for real estate firms, but that doesn’t mean they don’t have the freedom to grow their careers themselves.
The freedom of working as a real estate agent isn’t only restricted to decision-making. It also covers growth when it comes to business expansion. Like other businesses, real estate agents earn through hard work and dedication. Because they earn commissions by selling, the rewards are limitless. Agents can invest these rewards in different ways, like expanding marketing media or employing people to get the job done more efficiently. In real estate, there are endless opportunities for personal and career growth.
Steps in Becoming an Agent
No matter how exciting a career in real estate sounds, you can’t cut corners in this dog-eat-dog industry. If you’ve finally decided to become an agent, there are several steps that you must take.
1. Saving for Expenses
Getting into a real estate career isn’t just a job. It’s also a business, and like any other business, it requires financial capital. Before starting a career in real estate, you have to pay for pre-licensing classes, preparation classes, and application fees. After taking these classes, there are fees for taking the licensing exam. Upon passing the licensing exam, getting access to the multiple listing service (MLS) database as well as associations like the National Association of Realtors (NAR) also requires fees. There are also expenses when joining a sponsoring brokerage.
Aside from these fees, you might want to set aside some extra cash. For the first month or two, you probably won’t be receiving your paycheck. It’s best to have extra money in your pocket to prepare for anything. Real estate can sound as though money continuously flows out instead of in. While this may be true, it’s only for the first few months. After getting the hang of the job, you’ll surely be reaping reward after reward for the rest of your career.
The requirements for licensing vary in different states. Usually, most states require you to be at least 18 years old, be a legal resident of the U.S., take pre-licensing classes, and pass a licensing exam. Pre-licensing courses can be completed in weeks, depending on the state’s requirements. Some states require around 100 hours’ worth of courses, while others require taking courses that can be completed in over 60 hours.
Aside from classes, there are also pre-licensing courses available online. These online courses will be convenient if you’re currently working full-time. The only hurdle with this is that you need a whole lot of self-discipline. Since there are plenty of distractions at home, you have to learn how to focus on online learning materials and absorb every piece of information to pass the licensing exam.
If you fail the licensing exam, there’s no need to fret. In general, there’s no limit to the number of licensing exam retakes. As long as you’ve been notified about failing the exam, you can apply for taking the exam again.
Some real estate agencies might have more requirements than what your state requires. That’s why it’s best to check with your preferred brokerage and your state to know these requirements. Doing so can help you make the necessary preparations.
3. Choosing a Brokerage
After passing the licensing exam, you have to join a sponsoring brokerage to supervise your sales and activate your license. It’s a real estate firm that will provide you with training, marketing tools, brand recognition, business cards, supplies, a workspace, and a sponsoring broker to guide you. In return for the benefits they provide you with, you have to pay them a certain amount from your commission.
With their years of experience, sponsoring brokers understand the ins and outs of the real estate business. Your broker will mentor you through your first years as an agent, so you have to choose one wisely. While it is important to consider commission splits, you should choose a broker who will train you well and help you grow. Even as you’re only starting your real estate career, low fees won’t matter if you don’t know how to go about with the business.
Additionally, if you want to be an official realtor, find a brokerage that is affiliated with the National Association of Realtors (NAR). There isn’t really a need to join the NAR and have the title “realtor,” but some successful real estate agents find it helpful.
4. Seeking Training
In some ways, pre-licensing courses alone aren’t enough to prepare you for the real estate world. Although your brokerage will provide you with training and a sponsoring broker, there’s still so much to learn out there. All of us have our preferred learning style, so look for a training method that will benefit you the most. Some real estate agents prefer to find mentors, while others find videos and other forms of training to be beneficial. Seek all of the available information and help out there. If you need to ask your mentors or sponsoring brokers, then don’t hesitate to ask away. The more information you have, the better you’ll be in your career.
5. Creating a Business Plan
Aside from being a salesperson, a real estate agent is also a businessperson. That’s why having a business plan ready can come in handy. This part might sound tedious, but it will definitely help organize everything. A business plan will also provide you with the right mindset and encourage you to focus on your goals.
Creating a business plan includes allocating money for various expenses. Where you’ll spend your money depends on your budget plan. It’s vital to stick to this plan and keep it in mind at all times for guaranteed success in your career.
Another thing to consider when developing a plan is your marketing tools or methods. After making a budget plan, you’ll find it easy to choose which marketing strategy and media you are going to use. Even if your brokerage already provides you with marketing tools, you don’t have to restrict yourself to using only those tools. With permission from your brokerage, you can utilize whatever tool or plan you believe will lead to your success.
6. Building a Client Base
Having a business is all about building relationships. Your first contacts will be the people you know personally, such as your friends and family. To expand your client base, start with those people by handing out your business cards. For a wider scope of referrals, don’t hesitate to approach other people and hand them your business cards. Meeting new people is a great way to start and grow your career. Of course, don’t forget to organize and manage your contacts in computer programs so that you can easily access their contact information.
While building your client base, always be updated about market prices and prepared to show the properties that you’re selling. Don’t go into a battlefield without your weapons, which are, in this context, your personality and expertise.
The Bottom Line
In the U.S. alone, there are over 2 million professionals with real estate licenses. That means the real estate industry is pretty competitive. No matter how grueling and intimidating the job gets, you can reap so many benefits out of it, and these don’t only include paychecks. There are people you have yet to meet, new relationships to build, and opportunities that will help you grow as a professional and as an individual. There’s also that rewarding feeling of helping other people make a huge investment decision.
Without a doubt, hard work and dedication are key to success. Aside from this, you need to continuously develop your plan, knowledge, and personality in the real estate business. It’s also important to utilize every effective tool there is, such as real estate calculators. Fortunately, Engineer Warehouse offers tools such as calculators made specifically for real estate professionals. These tools can help you be prepared to give advice on finances, loans, mortgages, and other real estate matters. When meeting clients, being ready with the right answers can help close deals and boost sales.