Most real estate agents love what they do for a living, and some even wish they became an agent sooner than they did. But considering only 13% of agents last longer than five years in the industry, it’s safe to assume that many pursue this career path without doing their research. Before you resign from your 9-to-5 job and enroll in real estate school, take the time to learn about how the real estate industry works—and how it doesn’t.
Before changing careers to real estate, consider the need to be outgoing, prioritize your clients’ needs, spend money to make money, and remain honest. A decent savings account, self-motivating mindset, risk-taking personality, and brokerage choice can also impact this smooth career transition.
Anyone can become a real estate agent, so long as you finish your pre-licensing course, pass your state exam, and get your license. However, you don’t want to sacrifice thousands of dollars and hundreds of hours of your time, only to find out that real estate isn’t what you expected. We’re going to discuss things you should consider before transitioning into a real estate career.
Get Ready to Play the Long Game
Data from the Bureau of Labor Statistics shows that there are nearly 500,000 real estate agents (including brokers) across the country. To put it more directly: You likely have a ton of competition in your local area, and nearly everybody knows at least one agent that they could turn to when it’s time to sell.
None of this matters when you consider the fact that real estate is a “local business.”
Most people prefer to do business with those they know, like, and trust. That means you need to turn “business mode” off now and then and take the time to get to know people. Learn and ask about their lives—work, kids, pets, holiday plans, sports teams, and any other politically-correct topic. Do this all without bringing up the market, reminding them that now is a fantastic time to sell, or asking when they’re looking to move—no pestering.
Not only will they appreciate the low-pressure and respectable interactions, but you’ll also be the first one they think about when they’re looking to buy or scouring Zillow.
However, understand that these relationships must be genuine (don’t fake friendship to ensure a hot lead a few months down the line) and that they take a long time to nurture (we’re talking months or even years). Real estate is all about playing the long game rather than cutting corners and taking the easy way out. While frustrating, the positive relationships you build with clients do wonders for building your reputation and can help generate referral business.
You’ll Only See a Paycheck When You Close a Deal
One of the most significant sacrifices you make when becoming a real estate agent is giving up your steady, bi-weekly paycheck. The only time you’ll see a direct deposit into your bank account is when you play a role in closing a deal—whether you’re on the side of the buyer, seller, or acting as a referral agent.
What’s problematic is that these commission checks could come several times a week if you’re a lead-generating fiend, or you could go months without any income. It’s entirely possible to make $20,000 in a week across multiple closings, and then go another four months before closing another sale.
This payment structure can be discouraging or motivating, depending on how you look at it. Regardless, you must be careful with your financing during your first few months as an agent. You may not get your first listing or buyer until six months or a full-year into your venture, meaning more will be going out of your accounts instead of coming in for the time being.
With that in mind, hold off on your transition into real estate until you have a decent amount of money saved up (6+ months of bills, minimum), you have another job you plan to hold onto during your transition, there’s a second income in your household, or you plan out a budget to limit your expenditures for now.
Keep in mind that your spending won’t always have to be so tight and stringent. These suggestions only rein true when you’re still learning the ropes and waiting for your career to seriously take off.
Buying Leads Isn’t As Great as It Sounds
Lead generation isn’t easy, and it can be nerve-wracking to go door-to-door (or cold call), giving your spiel, hoping that somebody takes you seriously and wants to list with you. That’s part of why many new agents make the mistake of taking the easy way out: We’re talking about buying leads.
Now, we’re not going to go as far as to say that these websites that “sell leads” are 100% scams, as you are technically getting leads with the money you hand over. Exactly what type of leads these are, you won’t find out until you give them a call.
The glaring issue is that these leads aren’t usually qualified, and you don’t know if they’re serious buyers and sellers or if they merely filled out their contact information on a random website. There’s also no way to know how many other agents are receiving the same leads as you—if you snooze, you lose, and ten other agents may have already reached out to the lead before you even checked your email inbox.
It’s not surprising that around 90-95% of these leads don’t pan out.
You may spend anywhere from $20 per lead to over $500 a month on these services, with absolutely no guarantee that you’ll yield a profit. Case in point: If it sounds too easy or too good to be true in real estate, it almost always is.
Here’s a video by Kevin Ward, explaining why buying leads doesn’t work and what your alternatives are:
Marketing & Networking Depends Solely on You
When you assume the role of “real estate agent,” you also take on the part of an “independent contractor.” That means you can work when you want and how you want (within the confines of real estate laws, of course). This extra freedom is a perk, but also means that you’re in complete control over your career as a real estate agent—you’re responsible for both your success and your failure.
Marketing, databases, and business dealings all fall on your shoulders.
This heightened responsibility can be a lot to handle as a new agent, but understand that it merely comes with the territory. Be prepared to:
- Reach out to 10+ people a day to expand your database (also known as your sphere of influence, or SOI).
- Ask people you know, “Who’s the next person you can think of who might be looking to buy or sell?”
- Maintain a client contact schedule via phone calls, text, and emails (reach out weekly, bi-weekly, or however you see fit).
- Keep track of your legal documents and forms and protect the privacy of your clients.
- Attempt a variety of marketing tactics (cold calling, geographical farming, door knocking, paid search ads, social media ads, etc.).
The point here is this: Nobody—your fellow agents nor your broker—is going to do any of these things for you to advance your career. You have to keep your eyes on expanding your network, building local name recognition, and proving yourself to be an excellent hire.
You Can Become an Agent at 20, 40, 60, or Even 80
While you can’t become a real estate agent without pre-licensing and some hands-on training, the good news is that you don’t need a 2-year or 4-year undergraduate degree to pursue this path. The majority of real estate agents, 95%, to be exact, didn’t get into real estate as their “first career.”
That means you’re in excellent company if you’re making a midlife career change to real estate. Whether you’re fresh out of high school (or college), coming off the heels of 20 years in another industry, or looking for some extra income during your retirement years, the real estate industry is ready to welcome you with open arms.
There are also a few extra benefits of starting a real estate career at 50 or changing careers to real estate after kids have grown.
You likely have a bit more saved up in your bank account, so this career venture is much less of a financial risk than it might be for a 20-year-old newbie. Your schedule is far more flexible now that you don’t have to plan your closings, appointments, and showings around when you can find your babysitter or when the kids are at school. You also may have a far wider network of people you know from your personal life and past workplaces.
If you’re nervous that you’re “too old” to be a real estate agent, don’t be!
Don’t Depend on Your Broker to Hand You Leads
Your real estate broker is there to be a leg of support when you need them—helping fill out your first documents, learn about lead generation, and get the ball rolling on your new career. But your broker also has dozens (or even hundreds) of other agents to oversee in your office.
There’s simply no fair way to distribute the few leads your broker gets directly across dozens or even hundreds of agents. Should they give them to the top-producers, new agents, or distribute them randomly?
So, just like you shouldn’t buy leads, you cannot depend on your broker to hand leads to you. You’re going to spend your first few months as an agent reaching out to sometimes hundreds of people per day and adding people to your database.
Don’t worry—in due time, you’ll spend more time with clients and start generating referral business.
Prepare to Leave Your Comfort Zone in the Past
You might not realize this right now, but real estate agents are also “salespeople.” Let’s make one thing clear: There’s no such thing as a shy, nervous, or unconfident salesperson that generates decent revenue. So if you would use any of these words to define yourself today or you’re generally hesitant to spark conversations with strangers in public, you need to implement the old “fake it till you make it.”
Leave your comfort zone in the past where it belongs, as your clients won’t always be those within your inner social circle.
You’ll have to call phone numbers where you don’t know who’s on the other end of the line. You’ll have to reach out to your leads week after week, even when you feel like you’re annoying them. You have to be confident enough in your industry knowledge that you can talk real estate whenever the conversation steers that way—if somebody asks, “How’s the market?” you need to speak to the market health confidently and precisely.
Fortunately, even if you’ve been an introvert your entire life, assuming the title of a real estate agent—a job typically reserved for extroverts—is entirely possible with a little hard work.
You can start widening your comfort zone by attending social events, patting yourself on the back when you do something out of the norm by your standards (like making a phone call), or relying on lead generation tactics highlighting your strengths. While you can’t avoid interacting with strangers entirely as a real estate agent, it doesn’t have to be so stressful or nerve-wracking.
No Two Brokerages & Companies Are the Same
Since you don’t pocket a paycheck until you close a deal, you might assume that you can join any old brokerage without hurting your career as an agent. That’s not true, and the brokerage or company you choose to work for can play a huge role in determining your success. So before you select the first broker that reaches out or offers a 70/30 split, take the time to interview around and find the company that best fits your needs.
You’ll want to ask about things like:
- Commission splits, structures, and extra fees
- Education or training tools available to agents
- How the brokerage uses technology
- The brokerage’s niche (sell/buy, rent, beachfront, etc.)
- Company culture and the office atmosphere
Most importantly, don’t assume that the company with the most yard signs within a 30-mile radius is always the best option as a new agent. While fantastic brand recognition can help you get leads and clients, nothing will convert a lead into a client like your relationship with them. Do your research before choosing a brokerage that has the tools and resources you need to succeed.
You May Have to Spend Money to Make Money
It would be irresponsible and incorrect to say that you have to spend money as a real estate agent to get clients and generate sales. However, unless you have nothing else on your schedule, spend every second of the day door-knocking or making calls, and talk a compelling game, you’ll have to invest in paid marketing tools at some point.
If you use these paid tools and resources strategically, those few extra dollars you spend on marketing will seem like chump change and pay themselves off 100-fold once you broker a deal. You don’t even have to spend $5,000 or more like 36% of real estate agents do.
Some costs you have to consider, at least at the beginning of your real estate career, include:
- Business cards
- Postcards, flyers, and mailers
- Social media advertisements
- PPC advertisements
- Print ads
- Professional attire
- Networking events
- Yard signs & open house signs
It’s also worth pointing out that running a Facebook ad for a week, for example, won’t be enough to get clients in most cases. The Rule of Seven in marketing states that a person may have to see your name or photo at least seven times before deciding to reach out to you. It’s a long game that you’re playing, but you can recover what you spend after closing your first deal.
As for how much you should spend on marketing, most skilled agents suggest setting your budget at about 10% of your monthly income. However, you may be able to slow down on marketing once you start getting the referral business.
Your Fellow Agents Can Either Be Friends or Foes
The real estate industry is, undoubtedly, a dog-eat-dog world. While the other agents in your office have the same company name on their signs as you do, don’t ever assume that they’re on the same team as you. You’re all competing for the same local listings, and they very likely see you as fierce competition—lending you a hand may go against their own best interests.
This mindset explains why so many agents are secretive about the techniques they use to generate leads and communicate with clients.
As a new agent, don’t be afraid to ask other agents for assistance but don’t be surprised when your fellow agents respectfully decline. A big part of your early days in real estate will be about throwing everything at the wall and seeing what sticks (particularly regarding marketing and lead generation tactics). You’ll eventually find what works for you and blaze your own trail.
Never Let Your Job Consume Your Whole Life
To say that the real estate industry can be time-consuming is quite an understatement. You can get away with dedicating just 15 hours a week to building your business and make a killing, capturing dozens of qualified leads in a few short weeks. However, most real estate agents, precisely 49% of them, will work the standard 40 hours a week.
Now, that may not be out of the norm for you if you’re coming from another 9-to-5 industry.
But it can be quite the adjustment since the average real estate agent schedule is quite flexible. You have to be ready and willing to answer calls, meet with clients, and sign paperwork whenever it’s most convenient for your clients—including weekends, holidays, and evenings. With that in mind, it’s extremely easy to let your schedule get out of hand and let real estate consume your entire life.
To be a successful agent, time-block your schedule to keep your personal and work lives separate. Account for every hour (or half-hour) block in your daily schedule and add productive activities like lead generation, showings, open houses, and listing appointments. Be sure to block out time for things you like to do as well—times you won’t answer the phone or respond to a client—like working out, attending your kid’s soccer game, or reading a book.
It’s okay to tell your clients when your “business hours” are and when you’re most likely to respond. Don’t let your clients get used to having you answer their calls at all hours of the night or within two minutes every time. You’ll set the standard that your personal life takes second fiddle to their requests.
Here’s a video from Tom Ferry that expresses the importance of a time-block schedule and how to design your “perfect” day:
Success Doesn’t Happen Without Hard Work
Unless you happen to be a celebrity or an influencer with millions of local followers on social media, you shouldn’t expect success in real estate to fall into your lap. If you want to see results worth bragging about, you need to put forth your best effort and always strive to be better than yesterday.
Understand that the real estate industry can be hard to break into, mostly because setbacks come with the territory. Many agents get tired of the strokes of bad luck and assume they just weren’t meant to succeed as an agent—don’t let these negative thoughts overwhelm you.
The following events, though unfortunate, are standard in real estate and not a sign that you’re unfit for the job:
- Clients deciding they no longer want to buy or sell
- Buyers who refuse to sign an exclusive contract with you and then opt to buy with another agent
- Homes that fail inspection or require extensive repairs
- Clients choosing another agent because they were unhappy with your comps (no matter how accurate they were)
- Sudden market fluctuations
- Carting buyers around to dozens of houses while delaying pre-qualification or pre-approval
- Sellers leaving the house a mess on the day of an open house (or sellers who insist on being there during the open house)
It’s not the adverse or unfortunate events that define a real estate agent’s success, but rather what they do in the aftermath of these things happening. You cannot take it personally when a buyer suddenly goes AWOL, or a seller refuses to accept an offer that you know is higher than any others they’ll receive.
See these things as motivators to keep pushing and get (and close) twice as many deals by the end of the year.
Honesty Is Always the Best Policy
As a real estate agent, you’ll often find yourself in somewhat of a pickle. There will be times where you have to break some bad news to your client, which can cost you $10,000 in commission if it impacts the closing of a deal. Real estate agents have a fiduciary relationship with their clients, meaning you always have to put your clients’ needs and best interests above your own—even when it means a deal or an offer falls through.
Honesty is always the best policy in real estate, both legally and morally.
You’ll have to let your sellers know that a new (and better) offer has come in, even if you’ve already started the paperwork for the last one. You’ll have to inform your buyers that the home of their dreams needs $40,000 worth of repairs. You may even have to turn a buyer or a seller down if it puts you in a dual agency situation (where you represent both the buyer and the seller, complicating the “fiduciary” relationships since you can’t put one’s interests ahead of the other).
Though your clients may be unhappy that their dream home is no longer within reach, they’ll appreciate your honesty, integrity, and transparency once the shellshock subsides. As it turns out, most people prefer unfortunate truths than nicely-wrapped lies meant to spare their feelings.
Find a Way to Set Yourself Apart From Other Agents
There’s no pretty way to say this: There are more than enough real estate agents in your area to go around. There’s no doubt that you have incredible industry knowledge, but so does nearly every other agent within driving distance. What will you do as an agent to put yourself on a pedestal and prove you’re better than your competition?
Hint: It’s not leaning on your company’s name (there other thousands of other agents with the same company) or how long you’ve been in the industry (20 years as an agent mean nothing if you’ve only sold five houses in that time).
It would help if you had more to offer that makes you worth the 2-3% commission you’re pocketing from the sale of their home.
Your personality and client interactions are what will make you shine above your competition. With that in mind, you’ll want to market yourself and pride yourself in things like:
- Respecting your clients’ communication wishes (how they want to talk with you and when)
- Being personable and outgoing (be somewhat your clients can talk with as a person, not as a salesperson)
- Your willingness to put your clients’ wishes above all else
- Unique clothing choices that help clients and open house visitors to remember you
- Give information to people without caveats (sharing home buying tips and listings without a contract)
When you do these things to set yourself apart, you’re also helping to rid yourself of the typical “businessman” vibe. Clients won’t think less of you, or like you’re only speaking with them to line your own pockets—these tactics show you genuinely care.
If you read the entire list above without pause or a second thought, it looks like you might be ready to start your real estate career.
Now, it’s time to enroll in a legitimate pre-licensing course approved by your state. If you’re lucky enough to live in 40 of the 50 U.S. states, you can complete your pre-licensing coursework from the comfort of your own home through online classes via Mbition, Real Estate Express, or The CE Shop.
After you finish those 40-180 hours, you can then move on to your state real estate exam, license application, and broker affiliation.
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