How hot is the real estate market in your town lately? If you’re like most of the USA, it’s pretty smokin’. Maybe you’ve even thought about getting a real estate license.
I recently received a message from an old friend thinking about getting her license and I wanted to be thoughtful and completely honest about my opinion on becoming a real estate agent. This is a modified version of what I wrote her and I think it’s pretty relevant for anyone considering getting their license.
It’s a long read, but if you are thinking about starting a business, it’s essential you actually take some time and research this.
Quick Note: This post may contain affiliate links to the recommended books which could send a small commission our way if you decide to buy something after reading this post. Thank you so much for your support. Please know I only recommend something I believe in or am willing to try myself.
It’s Not All Sunshine and Unicorn Farts
A lot of what you might have heard is all the good stuff. It’s filtered for your viewing pleasure or so your agent friend appears successful. Real estate is a wonderful, wonderful industry, but it isn’t easy and it ain’t no HGTV!
The hardest part is getting set up into all the systems and learning a TON in a short period of time. You’re learning about your market and how to lead generate and basically start your own business from scratch. That’s why choosing a broker heavy on education and training is absolutely essential. It’s a lot of hard work and it’s something you have to take seriously, but if you can’t see yourself in a 9-5 job forever, it’s definitely something to consider.
Save, Save, and Save Some More Money!
Don’t expect to make any money for the first 3-6 months. That’s when you are learning and building momentum just like any other business. It is possible make money within your first couple of months, but it’s not common. Real estate is 100% commission. There is no salary.
Plus, your broker will take a hefty cut of your commission. It’s not all yours! Most brokers will take 50% of your commission when you’re new and unproven. That’s partially why I chose Keller Williams because you start off keeping 70% of your commission. Plus, the training and coaching programs are phenomenal.
AND, do keep in mind that even if you’re one of those insanely lucky people that makes a sale right away, you don’t get paid until closing, which takes anywhere from 30-60 days from the time an offer is accepted to the closing table. So if you go into real estate, go in knowing that you might not make a dime for the first several months to a year. Have at least 6 months of savings and/or a very supportive spouse or partner!!!
Are You Willing to Persevere?
Imagine this scenario: You get all the way to the day before closing after months of showing your buyers homes and walking them through the contract and then the deal falls through. Well, guess who’s not getting paid! (You) The best thing that can happen is you start looking for houses all over again. The worst thing that can happen is they lose their faith in you and go work with someone else.
Is the above scenario enough to make you go run for the hills? If so, go confidently knowing real estate agent life is NOT FOR YOU! If, however, you understand that this is 1) a relationship business where establishing trust and confidence in you is key and 2) that it’s a numbers game and not every deal closes, then this might be for you.
You need a thick skin for real estate. This is no different from any other business, but a lot of people become real estate agents thinking they’re tired of their 9-5 jobs and it’ll be easy. It can be simple, but it isn’t easy. You will always be learning something new in real estate, even if you’re a 20-year veteran. It’s never dull!
Understand and Accept That Lead Generation is Your #1 Priority
If you want to see what the job of a successful real estate agent really is, I’d suggest reading The Millionaire Real Estate Agent by Gary Keller. Seriously, this is required reading. In fact, read it annually if you become an agent. It really breaks down what you need to do to be successful and it’s not difficult or overly complex, but it IS hard work. If you read this and it sounds like something you think you’d like to do and you’re OK working some afternoons and weekend days, I say go for it!
Mindset and Consistency is Absolutely Critical
I can also tell you that mindset is 90% of this business. There are a lot of highs and lows in real estate. A lot of people get into real estate thinking it’ll be great because they’ll be their own boss and work whenever they want. This is partially true, but the full truth is that without discipline and doing things you don’t want to do when you don’t want to do it, there is no paycheck. (That’s a reference from the Harris Rules book I talk about in this post here, btw.)
Can you sleep in until noon and work only when you feel like it? Yes. Will you get paid doing that? Highly unlikely. To succeed as a real estate agent, you need to actually be your own boss. Meaning, you have set work hours and you actually work them. (i.e. lead generation)
If you would get fired for your work ethic from a 9-5 doing what you intend to do as a Realtor, don’t think you can get away with it and make a lot of money in real estate. Will you possibly do a few deals just from your network reaching out to you while you lounge in your PJs all day? Yes, it’s possible. Is it likely you’ll be living the high life and driving a Tesla while doing that? Heeeeell no!
It’s All About Forming and Maintaining Real Relationships
Also, do you have the personality to become a real estate agent? Real estate is a relationship business and if you have a big network of friends or acquaintances, it’ll make your life so much easier. A big network isn’t essential to start with, but it is critical that you start building it once you’ve started. The fun part of the job is that it IS your job to socialize with as many people as possible. Network, network network. Say “yes” to the party and say “yes” to the lunch. Say “yes” to as many social things as possible.
Something else to consider is if you have school-aged kids or are a military spouse, or are active in some other club or organization, that could be an AWESOME niche for you. The key is to keep participating in them and building your relationships without being pushy or salesy. (Ew.) It’s about forming real connections with others.
You Will Likely Have to Work Some Nights and Weekends
Keep in mind that most real estate happens on evenings and weekends. You get to make your own scheduled but you will more than likely have to work some evenings and weekends. If you want to avoid that as much as possible, focus on listings rather than buyers, but that’s a whole other post!
You Can Make a Lot of Money in a Relatively Short Amount of Time (If You Work Hard)
I hope what I’ve said doesn’t discourage you. I truly think it’s a great industry. Most businesses don’t see a profit within the first two years but real estate is one of the easiest businesses to start and make a ton of money relatively quickly. Can you make over $100,000 your first year? Absolutely! I didn’t, but I had to learn some of what I’m telling you the hard way.
I want you to be aware of the risks and challenges that come with it. A lot of people get into real estate thinking it’ll be easy and people will practically hand you a paycheck. Those are the people that get out of the industry within a year or during a market shift when they realize that you actually have to work hard. If you treat it like a business and do what you need to do every day (lead generation), it takes time, but you WILL succeed.
You Need More Education Than What You Learn in Your Licensure Course
Of course, they don’t teach you any of what I’m telling you in real estate school. They just teach you the legal aspect to keep you out of jail. If you want to actually learn how to succeed in real estate, it comes down to who you choose as your broker and possibly getting a mentor or coach, preferably in your local market. Choose wisely. It’s expensive to leave your broker.
Look for a broker that offers a lot of training and where you actually like the people you meet in the office. Yes, the commission split is important, but your commission split doesn’t matter if you never make a sale. That’s where the training comes in. I’m partial to Keller Williams because we were recently nominated the #1 training organization worldwide across all industries! Still, each office is different, so interview with several. Get a feel for the office and people and go with what makes the most sense for you.
Have more questions? Let me know!
If you’ve read this and have decided to pursue getting a real estate license, that’s awesome! Let me know. I have some recommendations for podcasts and books you might want to check out. I’ll be happy to share my opinions on what you want to look for when choosing a broker and some other lessons I’ve picked up.
Your market will be different from New Jersey (unless you’re IN my market)! If you know of a bunch of other people getting their licenses, it’s tough, but you can still succeed with a lot of agents in your marketplace. In fact, most of those agents will be gone in a year or two once they realize there’s actual work involved.
Oh! One last tip. If you decide to go for it, start going to open houses on your weekends in the area you’d like to work in so you learn the market. Try to see at least 5 homes in each price range. Be honest with the agents and tell them you’re trying to learn the market and thinking of getting your license. Most will be super friendly and helpful but watch out for the ones with bad attitudes. It’s infectious. Good luck!