How to make money as a real estate agent: A guide
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If you find yourself drawn to the world of homes and properties, a career as a real estate agent could be for you. But how can you become a real estate agent? Unlike other property-related jobs, such as architecture and interior design, you don’t need a college degree for it in the US. This is a good thing since you can become one anytime you’re ready.
Keep reading below to start making money as a real estate agent.
How much can you make as a real estate agent?
It depends on a few factors, such as the number of real estate transactions one makes and commission fees. In 2020, real estate agents made an average of $49,040, with the best-paid earning over $76,000. But sometimes, part-time real estate agents can earn a salary of $58,145.
Geographically, the states that pay real estate agents the most are in urbanized areas with large populations.
Average annual income
How to become a real estate agent
A job in real estate is perfect if you don’t like doing the same tasks every workday. In this industry, you’ll meet new people (clients) and visit all kinds of properties—homes, apartments, office spaces, you name it.
Luckily, you don’t have to complete a four-year degree to become a real estate agent; these five steps are the fastest way to get a real estate license.
Note: The order of steps below are general guidelines on applying for a real estate license, and the process can vary between states. Before moving forward, it’s best to consult with your state’s real estate commission.
Check your state’s requirements
First, you’ll need to research. If you live in California but plan to become a real estate agent in New York, check New York’s requirements, as some states will require you to be sponsored by a broker to receive your real estate license. One thing’s for sure, you’ll be subjected to fingerprinting, background checking, educational requirements, and an exam.
Complete pre-licencing courses
These courses will be your education on real estate—from best practices and tips to creating contracts and financing. Again, you’ll have to check your state’s course hours, as some, like Ohio, require 60 hours. On the other hand, New York requires one to complete 75 hours of pre-licensing courses, which will cost between $300 and $500.
Pass the real estate licensing exam
Like any part of education, there will be a big exam to check if you’ve learned all needed to join the real estate industry. You can find testing dates, times, sites, and costs on your state’s real estate commission website.
Note that licensing exams have fees varying from state to state. Iowa’s exam fee is $90, while Virginia’s is $60. If you fail and have to retake it, you’ll have to pay again, so it’s best to study hard before your exam date.
Apply for a real estate license
Congratulations on passing the exam! You can now apply for a license. Like the exam, however, there’s a fee involved—for example, in New Jersey, it’s $160—and you’ll have to include proof that you passed the exam, plus a completed criminal background check.
Once you’ve submitted all your requirements, your license can take anywhere between two to eight weeks to arrive.
Build a network of clients
What do you do after you get your real estate license? Start working! Most states require agents to work with a broker. They can supply you with sales leads, ensure contracts are lawfully compliant and provide you with resources to succeed in making a sale. Aside from that, you’ll have to invest in marketing yourself via social media, paid ads, or e-mail marketing to help clients find you.
6 ways to become a better real estate agent
Making money as a realtor requires patience and grit. Since no day will ever be the same, you must adopt these attitudes and principles to make the most out of your job (whether it’s full-time or part-time).
1. Be a people person
As a real estate agent, you’ll be talking to many potential clients, so it’s your job to ensure all their needs are met. Aside from that, you can attract more clients if you have a pleasant disposition and are kind and trustworthy, as this will help people be more comfortable with you.
2. Be flexible
A real estate agent doesn’t have a 9-to-5 job. Clients may want to book visits or set meetings on nights or weekends. The more flexible you are with your time, the more they’ll trust you and push through with the sale.
Of course, your schedule must still give you enough time to rest. Be honest with your clients if you’re fully booked for a specific day or weekend. They’ll appreciate that more.
3. Take advantage of opportunities
Notice your neighbor moving out? Go over there and ask if they’re already working with an agent to sell their house. Or if a relative recently acquired an apartment building, ask if you can be the agent to help find renters. In real estate, no opportunity should be passed up, as any leads can lead to a sale.
4. Focus on your customers
The newest house you’re selling may not be what your client is looking for, and that’s alright. What’s important is you take the time to understand their needs instead of constantly pushing a sale, so the next property you show them will be more to their liking. If it doesn’t go through, don’t worry. You can continue working with them to find the right house or apartment.
5. Look for niches in the market
Being a real estate agent doesn’t just mean selling houses to people. It also entails finding other avenues that will help you to sell.
For example, suppose short-term rentals are prevalent in your area. In that case, you can find investors looking to buy properties to turn them into an Airbnb spot. Or if you see many empty lots not being used, you can get in touch with developers or pitch to clients willing to build a house from the ground up.
6. Represent rental clients
Many people can’t afford to buy houses anymore, which is why many rent. The good news is that renters still need real estate agents to help them find the best place to live. Before you start representing them:
Learn what makes a good house or apartment to rent.
Assess the risks and factors that dictate them.
Get to know your clients so you can show them the places that suit their needs.
5 side hustles for real estate agents
The flexibility of a real estate agent will allow you to pick up side gigs to earn extra income. If you find yourself wanting to do more than sell properties, here are some real estate gigs you can do:
1. Manage properties
An ideal side job for realtors, especially those just starting out in their careers, since payment is more immediate. Part-time property managers typically earn between $20,000 and $32,000 a year. This job requires you to help property owners find reliable tenants, collect rent, address property maintenance issues, draft lease renewals, evaluate and set rental prices, and manage documents.
2. Teach courses
Why not pass on your knowledge about real estate to others for a fee? You can get in touch with your state’s real estate commission and learn how to become a teacher, whether online or face-to-face.
3. Become a real estate Tiktoker
If you want to help raise more awareness on real estate, join Tiktok and start creating short-form videos. You’ll be able to share knowledge with not just those who want to become agents but also buyers, property owners, and renters. Once you build a following, you can expect sponsorships to come in.
4. Stage homes
Most developers and property owners stage it for potential buyers and renters to see themselves living in a place so it’s not bare when people visit. If you love designing spaces, this is your chance to make your interior design dreams come true without returning to school. When you do this side hustle, remember to make sure the furniture doesn’t get damaged since you’ll be renting them from stores.
5. Write articles
Marry your passion for writing and helping people find their perfect homes by freelance writing for developers and brokers. Your writing can help build their websites’ credibility and raise more awareness of the properties available for sale or rent.
Make extra money as a real estate agent on Airtasker
There are many more ways you can make extra money as a real estate agent. If you’re already a licensed agent, you can sign up on Airtasker and instantly access real estate gigs such as rental inspection, landscaping, and taking property photos and videos. The best part? Doing one to two weekly tasks will help you earn a few hundred bucks per month.
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Frequently asked questions
This will depend on the state, but you can get your license delivered between two to eight weeks on average. The whole process of becoming a real estate agent, however, can take months. In New York, for example, this can be as fast as a few months or longer. It will all depend on whether or not you passed your exam and the background checks the first time.
Again, this will depend on the state. If you want to be a real estate agent in California, estimates are between $470 and $740. This doesn’t just account for applying for a license; it also includes pre-license courses, exam fees, and background checks.
Yes. Being a real estate agent isn’t a 9-to-5 job, so whenever you have extra time, you can work as a property photographer, landscaper, property manager, writer, and more. You can find other ways to make more money with a real estate license by signing up on Airtasker.
Real estate agents, brokers, and realtors may all sound the same, but they have differences.
Real estate agents are licensed individuals who help people buy, sell, and rent real estate. Brokers are agents with a broker license who hire agents to make sales and ensure they comply with the law. Agents cannot work directly with clients without a broker.
A realtor, on the other hand, is a real estate agent or broker who is a member of the National Association of Realtors. If you’re wondering how realtors can make extra money, the same side gigs apply.
Commissions of a final sale price generally range between 5% and 6%. They are shared between the listing agent, the listing broker, the buyer’s agent, and the buyer’s broker. For example, a listing agent sells a house for $200,000 with a 6% commission.
The listing broker and the buyer’s broker will equally split the commission, $12,000 (or $6,000 each), and they will then split it with their agents. Some agents and brokers do a 60/40 split, 70/30, or 50/50, and it’s common for top real estate agents to receive a larger commission than the broker.
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