Being a real estate agent can be a rewarding (and financially lucrative!) career. But success doesn’t come easily, at least at first. You’ve probably heard that most real estate agents don’t make it through their first year in the business. That’s why it’s important to go in with a clear-eyed view of what that first year is likely to look like. Let’s take an insider look at what to expect when you get your real estate license.
Getting a License Is Hard Work
This is not to gloss over the tough work of getting a real estate license in the first place! To get that license, you need to:
Take the required pre-licensing courses
Pass the state real estate exam
Apply for your license and pass the background check
Find an awesome sponsoring broker
So once you knock off that to-do list, what comes next?
You’ve Still Got a Lot to Learn
Your pre-licensing real estate courses taught you what you need to know to pass the state real estate exam and maybe got into some of the nitty-gritty around contracts, prospecting, or servicing a listing. But once you get out there, you’ll realize there’s a lot you don’t know.
Real estate is a hyper-local business. Market conditions, traditions around who pays for what, contract conventions, and what kind of marketing is effective will be extremely specific to your area. Depending on where you live, things might even be done differently in different parts of town. The only way to learn this stuff is out in the field, unfortunately. That’s one reason it’s so important to find a broker who can help show you the ropes.
It Can Take a While to Get Your First Paycheck
You’re probably not going to sell a home in your first week. It may take a month or two (or longer) to get that first sale. It takes time to find prospects and turn them into clients. You may do quite a few listing or buyer presentations before you get that first bite.
Also, even if you score a client right off the bat, you only get paid when the deal closes. It typically takes 30-60 days for a home to close escrow. You should be prepared to live off of savings, a partner’s income, or a side hustle for at least a few months when you change careers. Which leads us to the next point.
You Need a Business Plan (the Sooner the Better)
While you’ll be supervised by a broker, you’re most likely to be an independent contractor, not a salaried employee. That means that you’re essentially going to be running your own one-person business. And that business needs a plan!
Even if you haven’t even started your pre-licensing education yet, it’s not too soon to make a business plan for yourself. That will give you time to save up the money you need to get started. There are all kinds of templates online for making a business plan, but at its most basic, you need to have two things figured out:
How much money you need to make
How you’re going to do it
How Much Money You Need to Make
Before you take the jump into a new career path, take a hard look at your financial situation. Figure out what the minimum amount you can make each month and still pay your bills is. You can use that to calculate how much commission you’ll need to be making every month to get by.
Don’t forget to include costs associated with your business, like marketing materials, desk fees, and professional organization fees. (Be sure to factor in taxes! As an independent contractor, you’ll be responsible for filing quarterly estimated taxes. They can be as high as 30% of your gross pay.)
Then, figure out what a comfortable paycheck with room for some extras would look like. That can be your stretch goal.
Once you start closing deals, carefully track how much you’re making every month. Are you meeting the numbers you need to meet your minimum requirements? If not, figure out a way to either reduce your expenses or make more money.
This can also help you calculate how much savings you need to start out with. It’s wise to have at least six months’ worth of expenses saved up before you start. The more financial padding you have, the more runway your career has to get off the ground.
How You’ll Make It
The next part of your plan should consist of strategies to get where you want to be with the financial part of the plan. That should include:
Marketing strategies
Prospecting strategies
Posting schedule for social media and website content
Outreach strategies
Networking plans
Your Main Job at First Will Be Finding Clients
When you first start out, finding clients will be the majority of what you do. While you may get a few leads working the desk at your broker’s office, if you want to be successful, you’ll need to be out there hustling. Finding leads is called prospecting, and there are a bunch of different strategies for how to do it.
What works for you will depend on your personality and the market you’re in. If you’re a people person who loves chatting, cold calling or ringing doorbells might work for you. If you love social media and know how to build a following, that might be a good avenue for you to find leads. Prospecting strategies can include:
Direct mail like flyers and postcards
Cold calling
Door hangers
Having a highly-ranked website
Social media outreach (including, potentially, paying for social advertising)
Traditional advertising like billboards, benches, or newspaper ads (these may be too pricey at first)
Paying listing aggregators like Zillow and Realtor.com for referrals
Whatever methods you use to find leads, one of your most valuable prospecting tools will be your network. Your network isn’t just your friends and family — it can be anyone you have a personal connection to, including social media contacts, alums from your school, people from your house of worship, neighbors, people in volunteer or civic groups you’re active in, other parents at your kids’ schools, etc.
Keep an ear to the ground for leads in your network, and make sure everyone knows you’re open for business. Once you start closing deals, make sure you’re cultivating your client list for referrals. Word of mouth is an extremely good way to get leads.
You Will Need a Website and Social Media Presence
Different people have different comfort levels with being online, and that’s fine! But you will absolutely need a professional-looking website to get started in real estate. It doesn’t have to cost a lot of money: there are tons of services now that allow you to plug in your information and get a great-looking website. This makes you seem credible to anyone googling you, and is a great way to showcase your listings once you have them.
If you want to take it to the next level, you could create a blog or newsletter. Creating useful real estate content is a great way to be more findable on google and gives people a reason to come back to your website.
Social media-wise, you’ll need at least a Facebook and Instagram. Linkedin is great for networking. Many agents find success on Youtube, TikTok, and Twitter as well. Post real estate-related articles (from you or shared from other sources), your listings, and other real estate-related content.
Depending on your personality, you might enjoy making videos, infographics, or other pieces of shareable content. Growing a follower count will help you reach more prospects and eventually, potential buyers for your listings.
Follow other real estate professionals in your area and interact with them (when appropriate). Social media is a great way to network and connect with other people working in your space. Just make sure you’re always keeping things professional. Never post about hot-button issues and don’t get too personal (feel free to have a separate social account for your kid pics and political takes).
If You Put the Work in, You’ll Succeed
This probably seems like a lot, and it’s not all encouraging. It’s true, starting a new career takes a lot of work and drive. It might seem overwhelming at first. But if you’re willing to work hard and persevere, you’ll find success. You’ve got this!
Ready to start getting that license? Find a pre-licensing course in your state!
Updated 9/26/22