Selling real estate can be extremely lucrative, and it seems more residents of California are realizing that fact.
Since the housing market began rebounding in late 2012, state figures show the number of Californians signing up to become real estate agents is up 77%, according to Jeff Collins, staff writer for The Orange County Register.
“Bureau of Real Estate figures through June show California gained more than 20,000 new agents in 2014 and was on track to add 20,000 more in 2015,” Collins wrote. “In 2012, by comparison, just 11,400 people became agents.”
How will these new agents fair in competitive markets like Orange County, for example? With input from brokers, real estate agents, and real estate schools, Collins compiled these “Five things to know if you want to be a real estate agent” that every prospective real estate agent should consider:
1. Have a cash reserve — You’ll need cash for business costs such as broker fees, insurance, lockbox rentals, and marketing materials. “Typically, we tell people it takes around $5,000,” said Georgia Murphy, education manager for Coldwell Banker’s Southwest region.
In addition, you probably won’t make a lot of commissions in the first year, so you should have between three and six months of living expenses.
2. Get your “A” game on — Just a fraction of Orange County’s agents gets the bulk of the business, according to a report by real estate consultant Pat Veling of Real Data Strategies in Brea, so prospective agents should treat their new profession as a business. Commitment, dedication, and hard work are a must.
“Real estate agents typically work when other people don’t,” broker Al Ricci said. Sundays are their busiest days, according to Ricci, who also teaches a course for new agents at Pacific West Association of Realtors.
3. Do your homework — Before you can sell real estate, you need to get a California salesperson’s license. Prospective agents must complete three real estate courses and pass the state licensing exam. Courses may be offered online or in traditional classrooms. Make sure you do your research and sign up with a reputable real estate school.
4. Get more training — All those interviewed agreed: you need more than a license to succeed.
“Agents need to know local and national housing markets,” Collins wrote. “They must understand finance and economics. They have to know how to negotiate, be versed in the minutia of real estate contracts and forms, understand technology, social media, marketing, and know how to use the multiple listing service.”
5. Develop a business plan — This should include your goals, proposed area of expertise, and target market. It should also include a marketing plan and a budget for reaching your goals. Lance McHarg, president of Real Estate Trainers, suggests you also find a good accountant who is versed in real estate business deductions.