Getting Into Real Estate
Getting into real estate can be a daunting task when you’re first starting out. If your ultimate goal is to become a real estate salesperson, we’re going to take you through the steps to get started, and what the journey will look like along the way.
Most feel overwhelmed with the possibility of switching careers and getting into real estate, or starting off in real estate to begin with. With a better understanding of the road ahead, the feat becomes more attainable.
More specifically, we’ll touch on:
- Why most people get into Real Estate
- Getting started
- Industry Overview
- Real Estate Agent vs. Broker vs. Realtor: What’s the Difference?
- What to look for in a brokerage
- Finding a mentor
Why do people get into real estate in the first place?
Not all journeys are the same; People join the real estate industry from an array of backgrounds with many different experiences.
Although there are a number of reasons that you may find yourself in the real estate industry, we’re going to list the top 3 pieces of criteria found when identifying why most get into the industry.
- Passion for real estate
Chances are that if you’re reading this article you didn’t always have a passion for real estate but have come to love it, or are intrigued by the opportunities that the industry offers.
After purchasing his own home and quickly realizing that he desired to build more wealth by leveraging real estate, Managing Partner, Ryan Butler of Coalition Properties Group described it this way when asked about why he got into real estate; “I wanted to find deals, and I got tired of asking realtors to open doors for me”.
In this example, Ryan didn’t find his love for real estate until after he purchased his first home and decided to leave his job as a Software Engineer to pursue his newfound passion.
- Career change
Often, real estate professionals got into the profession after having previously worked out of industry doing something completely different with their professional life.
Furthermore, feeling unfulfilled in an office job with limited room for growth has driven a significant number of people to make the jump and decide that getting into real estate was the next move to make.
Professionals are attracted to the industry due to the diverse career path that it offers.
To further highlight the diverse career path that getting into real estate offers, a Realtor in California named Tracey says “I love being my own boss which allows me to have a flexible schedule and to be in control of my successes or failures. I also love the fact that I am constantly learning new things from contracts to rules and regulations. I am never bored. I get to work with some wonderful people and yes, the money is nice as well.”
This leads us to our final point.
- Income and independence
You’ve seen the TV shows like Million Dollar Listing New York where agents such as Ryan Serhant are driven around in fancy cars and show exclusive properties for 6-figure commission checks. That must be what real estate is like for everyone, right? Wrong.
Real estate professionals work a lot of hours and the industry is highly competitive due to a low barrier to entry, but there’s unlimited upside (major piece of attraction).
Effective real estate professionals are compensated well and in return for their efforts are allowed more independence than most fields have to offer.
If you’re not afraid of the learning curve, initial long hours, and unlimited upside then continue reading.
Getting Started
Getting started in real estate can seem daunting, but better understanding the road ahead makes the move into a real estate career more attainable.
It’s relatively easy to get started, but there are a few steps you need to take before you start selling real estate. Some of the steps that you are going to need to take are as follows:
- Check state requirements
- Take Online Course
- Determine if you want to become a Realtor
- Identify which brokerage to join
Speaking to each of these a little:
Checking the initial requirements that go along with becoming a real estate agent should be the first step. Whether it be age, minimum education or the necessary exams, it’s good to determine what your state is going to require from you in order to obtain a license.
Once you decide which state you want to be licensed in and have determined the requirements then its likely time to take the necessary courses. Speaking specifically to Washington, DC, you first have to complete the 60-hour pre-licensing course (in-person or online), then you will have to take both the National and State exams and pass those.
Once you pass the real estate exams, your next choice is going to be to decide whether or not to become a realtor. So what does that mean?
A realtor is an additional distinction that means you are associated with the National Association of Realtors. This is an additional designation that adds credibility to you as an agent and as Ryan Butler, Managing Partner from Coalition Properties Group says, “…you don’t have to be one but If you want the access and networking and building your brand in the real estate community, you’re pretty much going to have to be one.”.
Lastly, you will need to make a choice on what brokerage you want to join. Joining a brokerage comes with the benefits of brand presence within the area you are selling, learning from your coworkers and their experience, and networking with the brokerages established relationships that could help with lead generation.
Most importantly when looking for a brokerage, have a firm understanding of what you are looking to get out of them and how you want it to benefit you.
Real Estate Industry Overview
The real estate sales industry, as Ryan Butler of Coalition Properties states it, “is the greatest business in the world”. Real Estate is a highly competitive industry that continues to innovate and attract new talent. For those already in the industry, or those that are looking to get involved, the following characteristics really the define the industry:
- Low barrier to entry
- Ability to scale up quickly
- Fast paced environment
- Unlimited earning potential
Touching on these characteristics:
Real Estate is highly competitive for a multitude of reasons but one of the primary reasons is the industry’s Low Barriers to Entry.
Outside of the necessary licenses, there aren’t many requirements to get started.While there are low barriers to entry, those that innovate and create value for the consumer are more likely to stand out and continuously grow.
The ability to scale up quickly is another attractive characteristic of the real estate industry. To expand upon this aspect, Kameron Kang, Founder of the Kree Team states, “if you have existing relationships within a community or an industry, it becomes much easier to ramp up and growth can happen very quickly.”
With the two previous characteristics in mind, the industry becomes incredibly fast paced. As we briefly touched on, the continuous innovation, ever changing market trends and the potential for a lucrative career all culminate into a fast-paced environment.
Real Estate Agent vs. Broker vs. Realtor: What’s the Difference?
Most people often mistakenly lump all of the above titles together*. If you’re getting into Real Estate, it’s important to distinguish the difference between these titles in order to better identify the path that makes the most sense for you.
*Titles can change based on the jurisdiction
- Real Estate Agent
A Real Estate Agent is the first title that comes to mind when people think of real estate professionals. Agents have a professional license to help people buy, sell, & rent real estate.
Agents go through pre-licensing training hours that vary by state. Once the agent has met their required state training, they’re then able to take a written licensing exam that is broken down into two sections:
- Federal real estate laws and general principles
- State specific laws for the state you’re taking the course in
Once this exam is passed, you’re now a real estate agent.
- Realtor
A Realtor is a highly respected title within the industry due to a more rigorous standard that they’re held to by being members of the National Association of Realty (NAR).
By becoming a member of the NAR, Realtors have access to market data and additional services typically not available to nonmembers.
- Real Estate Broker
A Real Estate Broker is a Real Estate Salesperson that is taking their education beyond the certification received and passing a broker’s license exam.
Much like becoming a Real Estate Agent, each state has their own specific exams and requirements. Topics that you can expect to have a deeper knowledge in as a broker include:
- Contracts
- Taxes
- Insurance
- Ethics
There are essentially three types of brokers:
- Associate broker
An associate broker is the first level of being a broker, also known as a real estate professional, has a brokers license but is working for a managing broker and therefore doesn’t have the responsibility of supervising other agents.
- Managing Broker
The Managing Broker overlooks the day-to-day operations of the firm and is involved directly with hiring agents and ensuring that they’re set up for success in their new role.
- Principal/designated Broker
Every Real Estate office has at least one Principal Broker. They’re responsible for overseeing all licensed agents at the firm and that they’re operating ethically and meeting compliance requirements set forth by the state and federal levels. Because they oversee all agents, this broker typically receives a piece of commission for each sale their agents generate.
What to look for in a brokerage
Choosing the right brokerage based on your goals is an important part of your path to success when getting into Real Estate.
As you look to determine the brokerage that you’ll join, you’ll want to identify your requirements for:
- Marketing resources
- Training
- Costs/budget
- Technology
- Support
- Lead generation
Once you’ve identified what you expect to gain out of a brokerage, here are the three different brokerage models that you’ll have to choose from.
- Dependent
The dependent model is great if you’re just getting started and looking to offload some of the costs associated with starting your Real Estate journey. A brokerage that falls into this category will typically pay for your license, exams, and marketing material to help get you started.
The dependent brokerage spends a significant amount of their capital promoting their brand and in turn are able to provide leads to their agents and kickstart their way into production.
Because they’re covering your costs and providing you leads, the downside is that you’ll typically pay a higher commission percentage to the brokerage on all of your sales because of the capital they’ve invested in getting you to production.
Ultimately, this model is great for the professional looking to get their foot in the door and kick start their journey.
- Independent
The independent model is great for the professional who doesn’t mind paying for their expenses that a dependent brokerage typically covers, in exchange for a higher percentage of their commission on all sales.
Under the independent model, you should be prepared to incur more costs, and be able to get into production without relying on the brokerage that you’re working under.
This model is great for the established real estate professional that can manage the upfront costs associated with being an agent and the ability to find leads on their own.
- Interdependent
The interdependent model can be the best of both. The interdependent brokerage provides training, education, technology & support for you to build your real estate business.
The most known interdependent model is Keller Williams, as they invest their resources into training and supporting agents to ensure they have everything needed in order to be successful.
Because they’re investing resources into their agents, you can expect a higher commission split, but still not as high as the dependent brokerage.
Finding a Mentor Along the Way
Now that you’ve chosen a brokerage, you’ll want to identify ‘A players’ that can ease the bumps along the way. Mentors will typically be able to help you avoid some of the mistakes that they made when first getting started in the business.
Mentors can come directly from the brokerage you’re working under, or by just simply finding a person that you’ve seen become successful in the industry.
One word or caution is don’t just look at an agents social media or what they “say” they are doing. Focus on how they interact with other agents in the brokerage, what people say about them and verify that they have a history of production “selling homes”.
A great example of meeting mentors organically is one Kameron Kang, Founder of The Kree Team gave. He was teaching a 7am class at a former brokerage he was with, the group was small and filled with motivated young agents. He still stays in contact with a few of the agents from that group!
Pulling It All Together
The real estate industry gives all of us an incredible opportunity to build amazing careers, relationships, and communities. We believe that there is a place for everyone within our industry!
Be sure to let us know how your journey is going and if we can assist along the way.
