The rising demand for new houses in 2020 was mainly fueled by young adults, the largest group of homebuyers at 38 percent. The market has since slowed in 2021, but the potential of earning from real estate is still huge.
With good commissions and flexible schedules, real estate careers are enticing. Though programs and learning opportunities exist for those who wish to enter this lucrative field, transitioning into the real estate business can be tricky.
Make sure you have both the technical know-how and drive to succeed as a real estate agent. It’s not going to be a walk in the park, but with determination and a lot of practice, the career shift can be pain-free and smooth. Consider some vital components of launching a real estate practice before committing.
What is a Real Estate Agent?
In general, a real estate agent is a sales representative for an experienced broker or firm responsible for negotiating a property deal. Real estate agents usually either specialize in residential or commercial sectors.
Real estate agents arrange real estate deals that put sellers and buyers together during the negotiation process. Though real estate agents often represent buyers, they also should act in the general interest of all parties to arrive at a satisfactory sales arrangement for everyone.
Real estate agents are compensated through a commission based on the percentage of the sale. The average real estate agent commission in the U.S is about five to six percent of the house price.
Designations and Certifications
Like any field, specific education levels are required to operate as a real estate agent. An agent needs a real estate license from the state where they practice their profession. A significant first step is to research your state’s requirements and sign up for a pre-licensing course.
To be an eligible real estate agent, you have to be at least 18 or 19 years old, depending on the state, and a legal resident of the U.S. Different states require particular examinations to acquire basic preliminary certification to begin a real estate career. You have to pass the real estate examination in your state to practice as a real estate agent.
Designations refer to targeted education opportunities that enable real estate agents to conduct business in specific areas of interest appropriately. Such courses include:
- Specifically representing consumers
- Interacting with demographics from diverse backgrounds
- Analyzing markets at an advanced level
Being a real estate agent requires a lot of commitment since you will handle your paperwork, manage contacts, find leads, and deal with sellers and buyers. Make sure you are fully committed to the job. Get first-hand information from real estate agents to weigh your options just in case you shift your career and want to become a real estate agent.
Taking risk is a part of most businesses, and real estate entails specific levels of risk. You will be dealing with many people, and the potential for making mistakes is a real possibility. Make sure all transactions are properly documented and have a paper trail. Keep detailed information on emails, phone calls, and conversations. Always ask your client to sign every time there are changes in the contract.
Before transitioning to a real estate career, research the required liability insurances in your state. One vital insurance type is errors and omissions insurance for real estate professionals as court and litigation expenses are costly.
These policies cover legal defense costs, claims and damages losses, and negligence.
Commission and Taxes
In most states, commission rates for real estate agents are six percent of the sale; commission rates can fluctuate depending on the state and current market. As real estate agents work on commission, no taxes are withheld from their pay. Property sales representatives are required to file an IRS Form 1099-MISC and notify the state.
Knowledge is Power
Embarking on a new career can be both exciting and nerve-wracking. If you’re considering a real estate career, research the requirements to launch your new venture. It is also essential to build fundamental knowledge by enrolling in programs that can help you jumpstart your career. Find out the prerequisite educational programs to get a real estate agent’s license.
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