In this week’s article, we are talking about the 5 things you need to know BEFORE starting a real estate career.
These 5 things are important to know so that you have a clear expectation of what you are walking into when you become a real estate agent. As the old saying goes, “knowledge is power.” Our job at KW is to help equip you with the right knowledge to create a fantastic real estate business.
Let’s dive in and answer some of your most commonly asked questions!
#1: How Much Money Can I Expect to Make in Real Estate?
One of the reasons why we love real estate is because you have no ceiling on what you can make. Since real estate is a 100% commission-based opportunity and you are your own boss, you get to decide how much you want to make! And yes, this means you don’t get paid unless you make a sale.
Unfortunately, we can’t predict or guarantee what you will make in real estate. The truth is there is no “average income” for a real estate agent. This is because you have agents who work part-time, full-time, or no-time. (As in they have their license and don’t do anything with it… not recommended).
And then within these groups are people who either follow proven models for success or don’t.
We can tell you that we have seen brand new agents make $150,000 or more in their first year in the business because they leveraged the training, models, and systems within Keller Williams. How many other businesses can you start with very little upfront capital and make that kind of money in the first year… Not very many.
The great news is at Keller Williams, we provide you with resources and training to help give you an advantage in your first year.
We know you might be looking for something more specific so, if you want to start forecasting some numbers, you can multiply the average price of a home in your area by the average real estate commission in your state. Then multiply that number by the number of homes you think you can sell in your first year. That will give you your gross commission income.
It’s important to note that all real estate commissions are negotiable and the numbers above serve as an example only.
#2: How Much Money Do I Need to Get Started?
This is an important question because many people don’t think about the cost of starting a new business and the time it takes to start producing revenue from that business. Since you are creating your own real estate business, it will require some financial investment.
A few of the things you need to consider are:
Licensing course fees
Board of Realtor dues
Other business expenses (phone, office bill, computer, office supplies, signs, marketing, etc.)
On average, the start-up costs associated with this range from $1,300 to $3,500. Again, every state is a little different so these are just meant to serve as a ballpark.
How many other legitimate businesses can you start with such a small investment?
#3: What About Cash Reserves?
How’s your emergency fund? Do you have a spouse that works or are you the sole provider? Do you have 3-6 months built up to cover your living expenses?
While full-time agents can earn a great income, the truth is most people don’t make a sale in their first month, especially if you’re new to the industry. It takes time to lay the foundation for a successful career. That’s why you want to have some cash reserves built up to give yourself the greatest chance of success.
There is also a psychological factor to this as well. If you have to make a sale immediately or you won’t be able to eat tomorrow, that desperation will come across in your customer interactions and won’t help you or serve them.
Let's not start off in real estate with the “burn the boat” approach and no cash reserves!
Having reserve money in the bank as you start your new career will help ease the pressure so your mind can focus on applying all of the great things you’re learning at Keller Williams to better serve your customers. This will actually give you the greatest chance of success.
#4: How Do I Get Started?
In summary, you are going to need to meet your state’s requirements, which typically includes attending real estate school, my top recommended schools can be found on this page of our our website.
You will then take your real estate coursework either in class or online. We recommend taking them online (if your state provides that option) to save you time and money.
Next, take and pass your real estate licensing exam (Make sure to study!) Once you pass your exam, you will receive your license.
#5: Joining Keller Williams Realty
This is what we are here to help you with!
Once you are finished with your real estate courses and before you take your real estate exam, you will set up a call with us to discuss joining Keller Williams.
We will cover what KW provides and answer any questions you have. We research the best Keller Williams offices near you and help get your foot in the door by lining you up with a one-on-one meeting with the Team Leader from that office.
Hopefully, these 5 things you need to know BEFORE starting a real estate career have empowered you with the knowledge to feel confident in your new career path. Anyone can do this, you just have to have the desire and courage to make the leap.