Your Bottom Line; The Dollars and Cents of Becoming a Real Estate Agent

You’ve decided that being a Real Estate Agent is your career path.  Congratulations!  A career in real estate is fast paced, exciting, an opportunity to get to know people from every walk of life, and it can be extremely rewarding – not only in the monetary department.

Real Estate Agents like other entrepreneurs and small business owners differ from most professionals in that they do not get handed a steady paycheck… this is especially true at the beginning of their career.  Also like starting any business you need to have start-up capital, and a nest egg to fall back on.  Unfortunately, unlike a small business, becoming a Real Estate Agent isn’t necessarily something you can get a business loan for – you might, if you have the business savvy to do so, but it isn’t a common occurrence.

Planning is the key to keeping yourself afloat, as you begin your new career.  Budgeting for both your personal and professional life.  Ask yourself these questions, and answer honestly, because lack of funds is what most often drives a new Real Estate Agent away from the business 6 to 12 months after they start.  Do I have enough money set aside to live on for 6 months to 1 year, if I didn’t have any income?  Can I stick to a budget, in order to get my business going?  Is it going to be a hardship on the people I love if I am not bringing in a steady pay check? ———– If you answered NO to either of the first two questions, today may not be the day to start your new career.  Don’t give it up, just plan for it by saving money and learning to budget what you have, when you can answer YES, go for it. ———- If you answered YES to the 3rd question, set down with your loved ones and talk it out, it may be that a little bit more in your savings account will smooth your transition from work force to Real Estate Agent, or it could be that your loved ones are OK with a few cut backs to see you on your way toward your dreams and goals.

Here are a few questions you need to ask before committing to becoming an agent, you will need these answered so that you can plan effectively.

1. What is the cost associated with training to become a Real Estate Agent?
2. How much does it cost to take the State test and get my real estate license? This is most likely two separate fees.
3. After I get my license, what Dues do I have to pay, for example National Association of Realtors, State and Local Association of Realtors, and Multiple Listing service Dues including rental of Key?
4. Are there fees associated with the Brokerage, that you have chosen?  A Desk Fee, Franchise Fee, Charges for phone, copier or other supplies, Errors and Omissions Insurance, etc.
5. Are there monthly or quarterly fees or dues that will be coming up after your initial cash output?
6. Do you need to increase your auto insurance, or put a rider on your insurance for your Brokerage?
7. Realistically, what supplies can I be expected to purchase for my business, computer, cell phone, calculator, business cards, stationary, postage, business attire, etc?
8. Will my current automobile work for transporting clients, is it safe, is it dependable?
9. What about fuel, and routine maintenance for my automobile? It is safe to say that your average mileage will increase.
10. What about advertising costs?  What type of expenses are typical during the first year?
11. Does the Brokerage offer any free advertising or client building materials for agent use, or is this something you will have to provide?
12. Am I going to have to begin taking continuing education classes right away?  Are there fees associated with these classes in order to get the needed clock hours?

In my first year as a Real Estate Agent I spent over $10,000 just for my business.  Colleagues have told me that their first year in business cost them anywhere between $5,000 and $15,000.  These amounts can and do motivate many new agents to leave the business.

Before you begin your training talk to several Brokers, ask questions, call the local Association of Realtors and ask questions.  Knowing what to expect before hand will not only help you plan and budget, but will help you achieve your career goals.