If you are ready to become a Real Estate agent, this article will provide you with all the information you need and most importantly, how to obtain your real estate license.
There are different requirements for real estate licensing in different states. For example, some states require a certain level of education and number of credit hours in the real estate field of work. However, you can check what the requirements are in your area and make sure to cover them before going for your licensing exam.
Before we go into the steps to become an agent, let’s see how Real Estate Agents make money.
When an ordinary person is considering buying or selling property, there are high chances this person will want to work with a real estate agent to help out during the process.
87% of buyers are purchasing their home with the help of a real estate agent or broker according to national research.
This proportion has been increasing in the recent past. The amount of money a real estate agent makes per year depends on several factors.
It depends on the number of successful transactions they make, the commission paid to the brokerage, and how the agents and the sponsors share proceeds.
The Requirements To Become a Real Estate Agent
These are the requirements:
- Take a license preparation course.
- Pass your exam.
- Make registration for your jurisdiction.
- Connect with a broker to work with/under.
It is important not to take the preparation course lightly. If you are thinking that it is going to be just like your college exams, you’re wrong. You need to research everything that you need to know and learn it in a way that you will be able to apply practically.
As per research through the years, it is claimed that half of the exams cover federal industry issues, as far as the other half focuses on state-level matters. So if you want to be fully prepared you need to understand both deeply.
Don’t worry, many states will allow you to take the exam as many times as you’d like but will usually require you to retake the pre-licensure course every time you fail.
Once you pass the exam, it is time to register with your state real estate commission and your local listing service. It is important because if you’re not in the service you cannot engage with local listings.
And finally, you need to join a broker to work under his umbrella, as we already discussed earlier in the article. Go back and check if you have missed it.
Here is a brief overview: The broker is the one that is certified for transactions and responsible for compliance with industry standards. Real estate agents, on the other hand, must work under brokers that are trained to deal with complex situations beyond the agent’s understanding.
The brokers are supervisors in the industry. As we now understand how Broker-Agent works, let’s check more about that.
Now let’s take a look at how real estate agents get paid.
Most real estate agents earn their money by way of commissions. Commissions are the pay real estate brokers earn for the services they render during the sale of the property. It is usually a certain proportion of the property’s selling price.
To further understand how real estate agents get paid, we need to understand the relationship that exists between an agent and a broker. Both the agent and the broker obtain operation licenses from the states in which they work. Agents do not work independently and have to be paid directly by consumers.
Brokers, however, can work independently and usually hire real estate agents. Commissions are paid to brokers. The brokers, in turn, split the pay with the agents who were involved in the transaction.
The broker’s pay is stated in the listing agreement (contract between the seller and the listing broker). It has the listing details and conditions.
The broker’s commission is negotiable. So if you are thinking about becoming a real estate agent, keep reading and you will know all the information and preparation you need for the process.
Let’s see what the requirements are.
Real Estate Agent Exam Information
Now we will take a detailed view of the upcoming real estate exam. As we already mentioned the exam comes in two sections, each with 60 and 100 multiple-choice questions. One of the sections will be focused on federal requirements and the other in industry-specific to your state.
You need to be ready for the math that you will be required to do in order to calculate tax and perform similar computations. To help you get ready now we will review some specific examples:
In New York, the exam has multiple choices. You will be provided with 90 minutes to complete the exam and after the time starts an instruction will be given. The test is available in a variety of different languages.
In California, the exam is a multiple-choice test with 150 questions. The test runs for 3 hours and 15 minutes. Each question contains four possible answers for you to choose from and there are no breaks allowed during the exam.
Most of the state tests use a computer-based test, in which you can select multiple-choice questions. Calculators are allowed, and it has to be a basic model that has no connection to the internet.
Real Estate Agent Exam Content
Every year the content changes so you have to be prepared for all the possible situations. The best advice I can give you is to take a look at your government for guidance. Most of the states are publishing handbooks or guidelines that will help you prepare and know what to expect to form the test.
Some states even have detailed information online and available to everyone. As you already know, here are some major topics for you to start preparing:
Marketing Analysis And Valuation
You will need to know how to price properties, which we will review a little bit later in the article. The exam will include questions with the main aim being to test your understanding of how appraisals work and how to perform valuation through a variety of approaches.
Here is one of the most important features, such as how to land characteristics that are measured and documented. The meaning of terms like “livable”, “rentable,” and more. Also, the right associated with the land and all-natural minerals that the land can contain.
Regulations of Land Control
This is a straightforward category! The content in that section from the exam is meant to provide and test the agent’s understanding of inherent government rights for land and private entities used to apply controls over the land.
It ranges from building and zoning codes to conditions set and association rules.
This is a major category of real estate agents and their responsibility centers for sales. This part of the exam covers the core concepts in the financing sector, types of loans and how the lending process works.
Agency General Principles
With this part, they ask the agent’s perspective on their knowledge of how agency and non-agency relationships work. The responsibilities of both the agent and clients are tested as well. How the agreements are handled and the types of issue disclosure, integrity, and basic accounting are also tested.
As we now know the procedure of becoming a Real Estate Agent, we must know what their duties are.
Real Estate Agent Duties
We have already discovered briefly the Real Estate Agent duties and now we will go deeper. We will get into specifics and matters like management, hosting a house and dealing.
All duties can be summarized in 3 main categories:
- Preparing a property for sale
- Research & marketing
- Managing the sales process
Here are the key areas within those 3 categories:
Running an open house
There is a lot of information available for the real estate agents to acquire before hosting an open house.
First of all, you need to do deep research on the market and be able to target your buyers wisely by knowing what exactly they’re looking for. You need to have clear expectations about the process that is coming right after provoking an interest.
And, of course, create a comfortable and friendly environment in the property where the buyers will feel at home.
These are the main 3 tips that can raise the interest at an open house for sale. One of the most common tactics here is an offer sheet that will allow the prospects to reach out.
Partnering is the main component of real estate lead management. You will have to keep in touch with the sellers to provide them the services they’re looking for at the right time. All you need is to provide the sellers and buyers with a positive experience which most of the time has an influence on your career.
Long-term relationships and projects are keys! You can consider yourself lucky if you help a client sell their house and they come back to you a few years later.
Creating and organizing your management strategy as a funnel is essential. At the top of the funnel are the people that are just beginning to search for a home. If you can reach them and the community has your trust you will be a successful real estate agent.
Seller and property information
Now when you have an idea of how to obtain the managing leads, it is time to start with that part of the job. Before you can find a buyer, you have to find a seller. This method is so old, but still so effective. You must consider a person looking to list a property for sale as important as a buyer.
For most of the real estate agents, the work comes from transitioning from real estate lead generation to creating lists/listings. You have to be prepared to handle sensitive and complex information as soon as possible.
You need to be ready to manage all the data that your broker provides you with! Personal data can be extremely sensitive, and the potential pitfalls of letting that information get into the wrong hands can lead to regulatory and business challenges.
All that data collection process can seem overwhelming, but the digital technologies make this a lot easier, so there is nothing to worry about.
Still, want to be a real estate agent? Great! You now have a feel of the profession and an understanding of what your roles will be. All the best as you pursue your real estate license.