Choosing a career is one of the most important decisions someone can make. The career path you take will greatly impact your life – from your income and lifestyle to your daily activities and fulfillment. When considering potential careers, it is crucial to weigh the pros and cons of each option carefully.
One career path that many consider is becoming a real estate agent. Real estate agents help clients buy, sell, and rent properties. They market listings, show homes, negotiate deals, and assist with contracts and paperwork. The real estate market goes through ups and downs, but generally offers stable long-term career prospects.
So is real estate agent really a good career choice? Below is an in-depth look at the pros and cons, pay and outlook, steps to become an agent, and tips for success to help you decide if real estate is the right career for you.
Key Takeaways
- Real estate offers the chance to be your own boss with unlimited earning potential through commissions. But income fluctuates based on housing markets and sales.
- Top agents can earn well into six figures after establishing themselves. But new agents should expect to earn $40K-$50K during their first year.
- Becoming a licensed real estate agent takes 4-8 weeks on average and requires coursework, passing an exam, and finding a brokerage.
- Pros include flexible schedule, networking opportunities, low barriers to entry, and high upside. Cons include irregular income, long hours, and high-pressure sales.
- Successful real estate agents focus on marketing themselves locally, leveraging spheres, practicing scripts, and providing exceptional service.
- Real estate offers good job security and variety in day-to-day work. But requires being comfortable with sales and rejection.
Pros of Becoming a Real Estate Agent
Flexible Schedule
One of the biggest pros of working in real estate is the flexible schedule. Real estate agents are essentially their own bosses, so they can set their own hours and take time off when needed. This makes real estate an appealing career for parents or others wanting work-life balance. Agents can schedule showings, open houses, and meetings when it’s convenient for them and their clients.
Good Income Potential
Successful real estate agents can earn a high income. Top agents take home well over $100,000 per year. Commission provides the potential to earn unlimited income based directly on your sales numbers. Hard work pays off financially in real estate. Even new agents can earn $40,000-$50,000 their first year as they build their business. Income keeps increasing as an agent gains experience and reputation in their local market.
Be Your Own Boss
Real estate agents enjoy autonomy in their work. Instead of taking orders from a manager or supervisor, real estate agents have the freedom to run their business how they choose. Agents can be as hands-on or hands-off as they want with tasks like marketing and paperwork. This independence appeals to many people who don’t want a traditional corporate job.
Low Barriers to Entry
Becoming a licensed real estate agent is more accessible than many other high-paying careers. No specific college degree or formal education is required. The main steps are completing pre-licensing courses, passing your state’s licensing exam, and obtaining your license. The process takes just a few months for most people. This quick entry point appeals to people of all backgrounds and education levels.
Networking Opportunities
A real estate career places you in constant contact with many people – clients, fellow agents, contractors, lenders, and more. This allows you to build an extensive network in your local community. Cultivating these relationships can bring repeat and referral business as part of a successful real estate career. People skills are very important in this field.
Being Your Own Boss
As mentioned earlier, real estate agents enjoy the freedom and flexibility that comes from being self-employed. Agents can take the career path they want with control over their work schedule. Hard work and passion tend to translate directly into success in real estate.
Job Security
People always need somewhere to live, meaning real estate agents have job security. Even when the housing market goes through periodic slowdowns, seasoned agents usually continue steadily working and making deals. The number of homes sold nationwide has increased almost every year over the past decade. Real estate remains a stable career choice.
Variety in Day-to-Day Work
If you dislike the idea of a repetitive office job, real estate may be a great fit. No two days are exactly the same for a real estate agent. One day you could be staging a home, the next showing properties to buyers, then reviewing contracts. Real estate brings new tasks and experiences that keep things interesting.
Cons of Becoming a Real Estate Agent
Irregular Income
A downside of real estate is the unpredictable, fluctuating income. First-year agents likely won’t earn much as they build their business. Commission means that income directly correlates with sales, so periods of low demand or few clients lead to reduced earnings. Feast or famine cycles make steady, dependable money hard to achieve.
No Guaranteed Salary
Since real estate agents are independent contractors, they do not receive a regular salary or paycheck. All income comes from earned commissions. If you don’t make sales, you don’t get paid. Some agents go weeks or months with very little income until they close transactions. Not having a guaranteed base paycheck can create financial challenges.
Long Hours
Agents often work over 40 hours per week, especially when trying to build their business. Weekends and evenings are prime times to show homes and meet clients. You may have to be on call and available whenever a client needs you. Achieving a good work-life balance can be tough for real estate agents starting out. Know that long hours come with the territory.
Affected by Market Fluctuations
The real estate market goes through ups and downs. When the market is down and home prices fall, fewer people buy and sell homes. This leads to reduced commissions and lower earnings for agents. The market impacts your income, which you can’t always control. Real estate careers require accepting these periodic ebbs and flows.
High-Pressure Sales
Many agents dislike the salesy aspect of the job. In real estate, income comes from commissions after closing sales. This motivates some agents to use aggressive sales tactics. If you aren’t comfortable with sales and persuasion, this could be a challenging career. However, building rapport and trust with clients is most effective long-term.
Pay for Licensing and Training
Getting established as a real estate agent requires paying for your pre-licensing education, state exam fees, MLS fees, brokerage fees, and more. Many new agents also take training courses to improve their skills. Be prepared to invest $1,000-$3,000 upfront before you can even start working with clients. Ongoing expenses include insurance, technology, marketing, and professional fees.
Mostly Commission-Based
One downside of the real estate pay structure is that it is almost entirely commission-based. While driven agents can earn a high income, you don’t get benefits like a 401K, health insurance, or retirement savings match that come with traditional W-2 jobs. Agents have to be disciplined about budgeting and saving money for retirement and slow periods.
High-Pressure Sales
Some agents take a high-pressure sales approach to earning commissions. However, hard-sell tactics usually harm your reputation over the long run. Savvy agents focus on educating and guiding clients through the real estate process. Building genuine relationships leads to more repeat and referral business.
Real Estate Agent Pay and Outlook
According to the Bureau of Labor Statistics (BLS), the median annual pay for real estate agents in 2020 was $48,340. The top 10% earned $112,570 or more per year. High performers have the potential to earn well into six figures. Your specific earnings depend on factors like sales volume, commission split, and local housing prices.
Many real estate agents start out part-time as they build their business. It takes time and effort to establish yourself and start making decent money. like any small business, income gradually increases over the first few years. Hard work and perseverance early on pay off down the road.
The BLS projects employment for real estate agents to grow by 8% from 2020-2030, keeping pace with average U.S. job growth. Technology continues to change the real estate industry. But agents with the right skills should have ample job opportunities in the coming years. Home buying and selling will remain essential needs.
While the national median pay gives a snapshot, earnings vary greatly based on where you work. Real estate agents in high-priced coastal markets like San Francisco and New York have much higher incomes than low-cost areas. You must consider local factors when deciding if real estate pays well enough in your location.
Steps to Become a Real Estate Agent
If you’re considering a career in real estate, what are the typical steps to get started? The process of becoming a licensed real estate agent includes:
Meet Eligibility Requirements
Every state has requirements that applicants must meet to qualify for a real estate license. This includes being at least 18 years old, having a high school diploma or equivalent, and passing a background check. Felonies or recent bankruptcies may disqualify candidates. Check your state laws to ensure you are eligible.
Take Pre-Licensing Courses
Real estate agents must complete a certain number of pre-licensure education hours before taking the licensing exam. Course topics cover real estate principles, law, contracts, transactions, and more. Between 40-200 hours are required depending on your state. Many people take courses online for convenience.
Pass the License Exam
You must pass your jurisdiction’s real estate licensing exam to become authorized to transact real estate. The exam covers topics like ethics, financing, ownership, contracts, and federal laws. Exam fees range from $100-$300. Study diligently as the pass rate is around 60%. Some states mandate taking additional exams.
Select a Brokerage
New agents must hang their license with an established real estate brokerage. Brokers provide training and resources in exchange for a monthly fee or percentage of commissions. Look for an office with a structure and culture that fits your needs. Larger brokerages offer brand recognition and leads.
Apply for Your License
Once you complete all pre-licensing education and pass the exam, apply for your real estate salesperson license. This involves submitting paperwork and fees to your state real estate commission. If approved, you will receive your license allowing you to transact real estate under a sponsoring broker.
Build Your Business
Now the hard work begins! Being a successful real estate agent means nonstop networking, lead generation, client contact, expanding your skills, and more. Dedicate time each day to growing your business through open houses, social media, sphere of influence, and other marketing channels.
The steps to getting your real estate license can take as little as 4-8 weeks up to several months depending on your state’s process. It’s affordable and accessible for most people who meet the basic eligibility requirements.
Tips for Succeeding as a Real Estate Agent
Launching a career in real estate is the easy part. Actually succeeding long-term in this competitive field takes consistent hard work and smart strategies. Here are top tips for aspiring and new real estate agents:
Commit Fully
To maximize your chances of success in real estate, commit fully to starting your business. Don’t think of it as a side hustle or hobby – treat it as your career. Making it a priority means devoting considerable time especially early on to build your foundation.
Focus Locally
Become an expert in your local real estate market. Learn the hottest neighborhoods, commute times, school districts, and more. Join and network with local real estate organizations. Focus your marketing and farming efforts regionally when starting out.
Farm a Territory
Pick a well-defined geographic farm area and diligently work it. Focus your marketing, door knocking, open houses, social media, and sphere of influence. Becoming the go-to agent for a farm will generate more listings and sales.
Leverage Your Sphere
Tell friends, family, past clients, and anyone you know that you have become a real estate agent. Ask for introductions to their contacts. Stay top of mind by consistently contacting your sphere through calls, emails, texts, mailers, coffee meetings, and social media.
Seek Mentorship
Partner with a successful agent who can teach you the ropes. A skilled mentor will train you on lead generation, contracts, staging, marketing, and more. Learn from their experience to avoid common new agent mistakes.
Practice Scripts
Script out introductions, listing presentations, buyer counsels, and objections ahead of time. Practice them out loud until they sound natural. Skilled scripts help you explain your services, handle objections, build rapport, and close transactions.
Focus on Customer Service
Provide exceptional service to clients throughout the transaction. Be available nights and weekends. Walk buyers through every step. Follow up promptly. Return calls and emails quickly. Exceed expectations to generate positive reviews.
Continue Learning
Make ongoing education a priority. Take advanced courses, attend conferences, read books, listen to podcasts. Successful agents continually improve their skills and industry knowledge. Stay up on the latest real estate trends and technologies.
FAQs:
How much do real estate agents make?
According to the BLS, the median annual pay for real estate agents in 2020 was $48,340. Top agents can earn $100K or more. Income potential is much higher in expensive housing markets.
How do real estate agents get paid?
Real estate agents work on commission and get paid a percentage of the home sale price upon closing. A typical commission rate is between 2.5%-3%. Many brokerages pay agents 50%-60% of the commissions earned on deals.
Do you need a degree to be a real estate agent?
No, you do not need a college degree to become a licensed real estate agent. To qualify, you must be at least 18 years old, have a high school diploma or equivalent, pass your state exam, and meet other requirements. College coursework in business or real estate is helpful.
How long does it take to get a real estate license?
The process of becoming a licensed agent takes 4-8 weeks on average, but can range from 1-6+ months depending on your state. You must complete required pre-licensing education, pass the exam, apply for your license, and join a brokerage.
Is it hard to become a real estate agent?
Becoming a licensed real estate agent isn’t difficult. The bigger challenge is building a profitable business and succeeding long-term in a competitive field. Hard work marketing yourself, providing great service, and building skills make the difference between fail or succeed.
What are the pros and cons of being a real estate agent?
Pros include flexible hours, high income potential, networking, low barriers to entry, and being your own boss. Cons include irregular pay, long hours, high-pressure sales, license/training costs, and an unstable housing market.
What do real estate agents do all day?
Agents spend their days marketing listings online, showing properties, meeting clients, writing contracts, advising home buyers and sellers, coordinating with lenders and title companies, paperwork, and more. No two days are exactly the same.
Conclusion
Deciding if real estate agent is a good career choice for you requires carefully weighing the pros and cons. A real estate career offers benefits like flexible hours, networking opportunities, independence, and unlimited income potential. But it also requires hard work overcoming challenges like an irregular paycheck, sales pressure, and market instability.
While rewarding, real estate is better suited to certain personality types – like outgoing people-people who thrive under pressure. Successful agents are disciplined self-starters who put in long hours – especially when getting started. If you’re willing to hustle and deliver great customer service, a real estate career can be financially and personally gratifying.
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