Before you decide to change careers or start a new career in real estate, there are some aspects you need to know and take into consideration before making the leap.
Before we discuss the 8 things you need to consider BEFORE you consider a career in real estate, my number one piece of advice is to make sure you do your research and know exactly what you are getting into! There is so much to comprehend when starting this journey and so many questions to have answered, so I will cover the important items for you here:
1. Let’s start with licensing.
Does your state require you to take a certified pre-licensing course? Most states do. I can only reference Virginia, where a 60-hour pre-licensing course is required to be taken and passed BEFORE you can even sit at the state testing center (PSI for Virginia) for the state exam. There are two options for taking the pre-licensing course: an in-class program or an online program. Both platforms cover all of the necessary material but offer different time frames to complete the course. In-class sessions can range from four full days in a row to a few hours twice a week for six weeks. Moseley (www.moseley.org) offers both classroom and online courses. Online courses for Virginia material include Real Estate Express (www.realestateexpress.com), (this is the course I took and highly recommend) as well as TheCEshop.com and Kaplan.com. These courses range from $200-$500. I believe you can also just buy the book and teach yourself, but don’t do it! Take a class, it is totally worth it. I have seen more people fail the test several times by thinking they could just read the material without an outlined course.
Depending on how you take your course, this first step can take two weeks to several months. Personally, it took me just about three months from the day I started studying to the day I passed the national/state board exams (I passed on my first attempt). Because I am a full-time working mom, most of my studying was done later at night and on the weekends. Knowing how long it will take you to pass the course and get licensed is your first huge requirement. Are you committed to studying on a regular basis? How many hours do you have to commit to a class and studies? I believe you have one year to complete the online course and take the final exam, but that’s pushing it. Odds are, if you wait that long you will definitely forget some of the material you learned when you first started studying.
Once you’ve passed your course exam (in classroom or online), you’ll need to take both the national and state board exams. In Virginia, these are typically done at the same time and in the same location. Upon successful completion, I highly recommend getting your fingerprints done at the testing center. You then have 45 days to affiliate with a brokerage firm. After 45 days, your fingerprints are invalid, and you will have to get them done again and pay the fee, again. If you do not plan on affiliating with a brokerage firm right away, you have the option to pay the licensing fee to the Virginia Department of Professional and Occupational Regulation (known as DPOR) and place your license into Inactive Status. Upon joining a brokerage firm, you can activate your license and pay yet another fee to DPOR.
If you do not pass either of the national or state portions, you must retake the one(s) you failed. In Virginia, there is no limit to how many times you can retake the test, but you will have to pay the $60 fee each time (this can add up). So, study hard so you pass both portions on the first try! I’ll have another post about licensing and study tips in the future.
2. Understand the commitment.
This is not a 9-to-5 job. Period. There is no such thing as “typical hours” in real estate. You need to be prepared to work all hours of the day, seven days a week. Odds are, you will end up showing houses at 9 am one day and writing contracts at 10 pm on another. The most convenient times for your clients are usually evenings and weekends. This doesn’t include the plethora of paperwork, phone calls, and marketing you’ll be doing during the day.
If you think selling real estate will be “easy money”, stop now. This career path is not for you. A successful career in real estate is not easy and takes a lot of hard work. The money will come only if you put forth, the time, the effort, and the dedication. Listings don’t usually just land on your lap. You cannot be afraid of busting your ass, meeting new people, and working outside of your comfort zone.
Real Estate is part sales, part marketing, part entrepreneurship, part relationship building, and a large part customer service. So think through each of these and make sure you are willing to do ALL of them, ESPECIALLY the customer service part.
Are you good with change? This is a fast-paced business, one not suitable for procrastinators. Technology and tools change. Laws constantly change, so you must stay up to date and understand how they impact agents and clients.
Trying to sell real estate part-time is NOT easy (especially in today’s market) – this is not a hobby, it’s a business. If you already hold a full-time job, you will miss out on everything your brokerage has to offer during office hours – training, continuing education, meetings, events, and more. This will make trying to start your real estate business VERY difficult.
3. Do you have money in reserves? Understand the start-up investment.
Do you have a little nest egg saved up? If you don’t, this may not be the right time for you to change careers. The potential for closing your first deal in the first six months is slim. It can be done (remember that busting your ass thing I mentioned), but you need to be prepared if your first closing does not occur for several months. Also, this is not a “steady paycheck” job. You only get paid when you close a deal. You may have three closings one month and only one the next. You need to know how to budget and how to stick with the budget, so you don’t have to get a side hustle.
In Northern Virginia, the investment to start your Real Estate career can cost up to $3,000 in your first year. This includes your pre-licensing costs like your pre-licensing course, optional supplemental materials (I’ll talk more about this in another post) exam fees, fingerprint fees, license fees to DPOR, real estate association fees, and MLS fees just to name a few. While the fees usually are not incurred all at once, they are usually paid out within the first few months. Some additional fees include business cards, signs, and lockboxes. Are you prepared to make this investment? Do you have the money available right now to start your new business?
4. Research potential brokerage firms to join now.
No two brokerage firms are the same. There are numerous firms to choose from. You will need to decide between a large, national firm or a smaller, privately owned boutique firm. Both have their positive and negative qualities to the real estate world. Take into consideration the size of the firm. Are they smaller where the Broker knows all of the agent’s names and has relationships with all the agents, or is the office larger where you could possibly become “just a number” and not have a close relationship with the leaders of the company (or other agents)? Do your research! Reach out to some of your local firms to see if you can schedule a time to meet with them now – before or toward the end of completing your course work. Ask to sit in on one of their training classes or meetings. There are numerous attributes you should look at when selecting a real estate brokerage, here are my top six:
1. Education, training and available mentor programs
2. Branding, advertising and marketing services
3. Technology offered
4. Lead generation
5. Company culture
6. Compensation plans
My advice would be to focus more on numbers one and five – then number six. Find a Broker with whom you are comfortable with. One you can build a solid relationship with as they will be the one who has your back in this new adventure. You need to be able to form a strong relationship with the management team, as they will be your lifeline to help you grow and be successful. Go with the Broker who truly cares about properly educating you, training you, and wants nothing more than to see YOU succeed. One that has a FREE mentor program is a plus! Find a firm that is successful and will teach you how to sell, build relationships (something you don’t learn in real estate school) and survive in this industry. Also, what is the attitude of the other agents in the firm? Are they friendly and willing to help you or are they competitive and snarky? Don’t focus on the commission splits, they can be negotiated, your success cannot!
5. Do you have a large network?
Don’t become a real estate agent and expect business to just come to you. You have to go out and market yourself to get the business and conjure up leads. It’s never too early to start compiling a list of people that you will contact to let them know that you’re a new real estate agent. Think big here. Everyone you know, from school, work, church, clubs, neighbors, relatives, your doctor, dentist, hairdresser… everyone! You will need a Customer Relation Management (CRM) system once you get up and running. There are several to choose from (another post on that later), but in the meantime, start an excel spreadsheet to collect the data into one document. Add as much information about each individual as you have – first name, last name, email address, home address, phone number, birthday, etc. Hopefully, your new brokerage firm will create an announcement for you to share your big news with your contacts.
6. You’re going to need a (business) plan.
“If you fail to plan, you plan to fail.” I believe Benjamin Franklin was quoted saying this. There is so much truth to that statement, especially when it comes to a career in real estate. When most new agents fail, it’s usually because they didn’t think about that period of time between passing their exam and receiving their first commission check. You need to set goals, as well as develop a business and marketing plan. That plan should include metrics and daily activities driven toward helping you meet your desired goals. The best way to hold yourself accountable to the goals you’ve established is to find an accountability partner. This person should be subjective and not just your “cheerleader”. Your accountability partner should help you set goals and encourage you to complete the tasks you’ve identified to help you get there. Don’t try to do this alone. Meet with your broker and/or mentor on a regular basis to help you achieve your goals.
7. You’ll need to be able to set yourself apart and understand who your competition is.
The good news is your friends and family will likely be eager to work with you as a newly licensed real estate agent. The bad news is everyone knows at least one real estate agent – usually more (my best friend’s brother’s sister-in-law – sound familiar?). On average, everyone knows of at least eight real estate agents. So, what are you going to do to set yourself apart from someone’s neighbor, cousin, or best friend from college? The most successful real estate agents know the value of differentiation. You need to develop a brand that sets you apart from the rest of the market and gives potential clients a reason to choose you over someone they know on a personal level. Find a niche, maybe it’s an area to specialize in or a specific type of client (like first time home buyers or military relocation clients). Can you offer any special services to set you apart? Are you a good stager, or negotiator? Once you get your license you can look into becoming certified in several specialties to help you stand out, above the crowd.
Learn about your competition. How many brokerage firms are in your area? How many licensed real estate agents are there in your area? Again, I can only speak for the Northern Virginia area, and we have over 25,000 licensed real estate agents/brokers in this area. Not all of them are actively selling, but still, the competition can be fierce!
8. How much do you know about the Real Estate Industry?
Start following successful real estate moguls and experts NOW! There is so much to learn in order to be successful, and lucky for you, there are so many amazingly successful business entrepreneurs and influencers out there that you can start to follow now. Most of them have blogs, YouTube channels and books published. Start now, learn from the best of the best. Here are a few that I have been following on YouTube:
1. Scott MacDonald, Entrepreneur, Mentor & Broker/Owner @scottmacdonald5
2. Tom Ferry, Entrepreneur, Real Estate Coach & Speaker @TomFerry
3. Brian Buffini, Real Estate Coach, Mentor & Motivational Speaker @Buffini&Company
4. Gary Keller, Entrepreneur, founder of Keller Williams and Author
5. Warren Buffett, Chairman, CEO and Founder, Berkshire Hathaway
6. Jared James, Entrepreneur, Real Estate Coach @jaredjamestoday
Have you been keeping up with your local real estate market? This is definitely something you should begin to research and follow throughout your entire real estate career.
These are just a few very important considerations you need to understand before deciding on a career in real estate. As I have told others, passing the licensing exam is the easy part; being a successful agent is not. Knowing what you are getting into and being prepared for the journey is the most important part of your success!
I’m excited to expand on some of these aspects in future posts. Stay tuned!