Is it Worth Getting a Real Estate License?
Are you considering a real estate sales career and want to know is it worth the time and effort? I will address some of the benefits as well as obstacles of being a real estate agent in Florida. From there you can decide if a real estate agent job is the right career for you in your state.
Is real estate a good career? A real estate career is not easy regardless of your location. You have got to have a lot of determination, persistence and tenacity along with professional skills. A lot of people get into the business because they perceive it to be easy, but it is far from easy (especially your first year). Most real estate agents quit within their first two years, because they got into the businesses with unrealistic expectations. My hope is that by reading this article you will know what to expect thereby reducing your chances of quitting.
How Much do Real Estate Agents Make?
Let’s just start off with a realistic expectation of Realtor© salaries. A lot of people watch the late night infomercials, HGTV, and reality TV shows and have a false perception that most agents are making millions of dollars. That is far from the truth!
You see the agents on reality TV selling million dollar homes, but they don’t show the final profit. For example, if you were to sell a home for $1,000,000 you can expect to take home maybe $21,000. See calculations below:
Selling Price $1,000,000
Commission 6% – $60,000
Listing and Buyers Agent Split the Commission – $30,000
Broker Takes Out Their Portion – $7,000
Your Take Home Pay – $23,000
Depending on the average sales price of homes in your neighborhood you will need to sell millions of dollars in order to make a good income.
According to National Association of Realtors©, the average salary for a Realtor© is about $50K. If you have 16 years or more of experience the average salary is about $74K. There are Realtors© that make more than that, but they are above-average top producers. What will you do to ensure that you are not the average real estate agent?
Some of the reasons that people choose a career in real estate include; flexible hours, the opportunity to work with people, and having the entrepreneurial bug. Although your hours are flexible you are going to have to put in a lot of hours and hustle if you expect to make money as a Florida real estate agent. Now that you know the average income, if you are still interested in being a real estate agent this is what you will need to do.
What Do I Need To Get A Real Estate License?
These steps to get a real estate license specific to the state of Florida. Some of the steps will apply to all states, but you will need to check into your state for the exact steps.
Step 1 – Fill out the Real Estate Licensed Sales Associate application at the Florida Department of Business & Professional Regulation. The Florida DBPR will do a background check.
Step 2 – Take a 63-hour real estate salesperson class. This link works for other states too if you are not in Florida.
Step 3 – Take the real estate license exam through Person Vue
Step 4 – Find a real estate company to join.
Step 5 – Pay dues to the National Association of Realtors©, your local Realtor© association and MLS fees.
In order to be a Florida real estate agent first you have to take a course then pass the state exam. I have heard from multiple people that they did not pass the exam on the first try. I was determined to pass the first time, because I did not want to go through the time and expense of taking the exam twice. I took an in person class then I also took the exam prep master online with Real Estate Express.
Pre-Licensing Real Estate Agent Expenses
Here is a list of some of the items that you will need to pay in order to become a Florida licensed real estate agent.
Florida Real Estate Saleperson Course* – up to $300
Exam Prep – $140
Florida DBPR Application – $83.75
Florida State Exam with Pearson Vue – $89
Total Exam Costs – $613.00
*You must take a 63 hour pre-licensing exam in order to take the Florida state real estate exam.
If you are one of the lucky ones to get a client immediately upon getting your real estate license, it could still be months before you make your first pay check. Let’s say you were able to list a house the day that you pass your exam. The house could be on the market for 60+ days before you find a buyer. Then the buyer needs to be approved and close on the home which is another 30+ days.
As a real estate agent your income will be sporadic and inconsistent. This is important to know when planning your expenses especially the first few years while you are building up clientele.
MLS Fees and Realtor• Dues – $1,700
Supra Key – $200
Technology Fee – $700
Marketing Expenses – $1,200++
Office Supplies & Misc – $500
Total First Year Expenses – $4,300++
As you can see, in addition to the $613 cost for the course and exam I spent another $4,300 to maintain my real estate business. Hopefully, you will make a commission to offset the cost plus make a profit. In the event that you don’t make a commission you need to be prepared financially.
You Will Work a Lot of Hours!
As a real estate agent you will need to hustle and work a lot of hours. If you are not meeting with clients to show houses or going on listing presentations then you are working on marketing and obtaining leads. Real estate is not a passive business. Yes, you will have some flexibility and that is one of the benefits of this career. However, overall if you want to put food on the table and cover your expenses you will need to work evenings and weekends.
Also, keep in mind that the real estate class focuses on rules and regulations. It does not teach you how to run a successful real estate business. It is important that you get with a real estate broker that can help you during your first year with the following:
- How to get leads
- How to negotiate
- How to stay motivated when there is not any money coming in
- How to keep the deal from falling through
The above bullet points are the backbone of a Realtor’s© business and can make or break your career, which leads to my next point of finding the right fit real estate team.
Finding a Real Estate Broker
Once you made the decision to become a real estate agent you will then need to go about the difficult task of finding a broker to hang your license. You will need to choose a real estate broker that can meet your needs as far as training, development, technology, commission splits, mentoring, etc. I am with Florida Realty Investments. Contact me for more information.
Being a Real Estate Agent can be a Roller Coaster
The one thing that I have found surprising since being in this business is that no two days are alike. There are many highs and a lot of lows. In order to be successful in this business you need to be prepared for and be able to handle the ups and downs. If you enter this business with realistic expectations then you should be able to weather the storms and have a rewarding long-term real estate career.
During periods of time when you don’t have any clients if you need to earn extra income and need a part-time real estate agent job click here to learn about how to do Broker Price Opinions.