Many people ask UpFlip how to become a real estate agent, so we’ve answered your question. In fact, there were more than 49,000 new real estate agents in 2021, but not all of them made it. If you want a real estate career, you need to follow some industry best practices. 

We talked to Santino Filipelli, who started Modern Realty in 2017. Today, he has a team of real estate agents working at his brokerage, and his top performer earned more than $1 million dollars. Santino told us:

He laid out a five-step process to becoming a real estate agent.

1. Enroll in Real Estate School, take your credit hours, and take a test.
2. Get your real estate license.
3. Find a broker.
4. Secure clients.
5. Close deals.

We’ll look at each of the steps, but first, let’s take a look at the real estate industry so you can develop your knowledge about it.

Real Estate Industry Crash Course

Real estate is an excellent career choice, but it can have high fluctuations due to economic conditions. For example, nearly 1 million real estate agents left the National Association of Realtors (NAR) between 2007 and 2012. Since 2012, 500,000 new Realtors have joined the NAR, nearly ⅓ of those joining in 2021.

So many people enter the industry that it is one of the ten most commonly started businesses according to the Economic Innovation Group. Statistics come from IBIS World unless otherwise cited.

Financials

Real estate agents and brokers are classified under the North American Industry Classification System code 53121. Nearly 1 million businesses split nearly $200 billion in revenue and have around a 21% profit margin. That means nearly $200,000 revenue and $42,000 profit per business.

Let’s look at the revenue and expenses of real estate businesses.

Revenue for Real Estate Agents

Revenue is primarily driven by commissions on the sale of property. The average commission is around 2%, which means for $200K in revenue, a real estate agent needs to sell approximately $10 million worth of homes or businesses. That converts to approximately 10 to 40 homes in most places.

The Bureau of Labor Statistics found that brokers make approximately $62K per year, while sales agents average around $48K.

Let’s look at the expenses for a real estate agent.

Real Estate Agent Expenses

A real estate agent will typically experience the following expenses:

• Wages: 16-22% which includes a 5-6% commission to cover brokerage administrative expenses.
• Office Supplies: 3-15%, with industry average of 3.6%.
• Marketing: Typically under 2%. This seems like an opportunity for the real estate agent who learns marketing and expands it to the typical 8% of other industries.
• Rent + Utilities: 5-6% of revenue.
• Depreciation: Normally 1.5%-16%. Business owners will normally claim depreciation of vehicles, buildings, and equipment. This is an on-paper cost.
• Other: These include all the miscellaneous expenses like taxes, software, gas, and payments to subcontractors like photographers. Here’s the breakdown of other expenses.

How to Become a Successful Real Estate Agent

Santino discussed the keys to success in real estate. He told us:

Check out our interview with him below:

We asked Santino how average and top performing agents perform. He told us:

It might help to write a business plan. Try out our BP template.

He went on to tell us:

If you already have a source of wealth to drive your revenue, Santino also mentioned that you can almost buy your way to success as a sales agent or listing broker. 

He also suggested getting involved in professional groups to help with networking and improving your knowledge base. We’ll discuss some of the groups that can help you become a better real estate agent.

Join and Get Involved in Professional Groups

Becoming a real estate agent requires building a personal and professional network. Some of the best ways to build your network and expand your knowledge include:

• Young Professionals Network (YPN): Helps real estate agents learn skills and best practices that help them be more successful. 
• National Association of Realtors (NAR): This organization provides a variety of certifications, ethic training, resources, meetings, and joining is the only way to become a REALTOR®.
• Chamber of Commerce: Join the U.S. Chamber of Commerce and participate in your local chapter.
• Federal Reserve: Keep up to date on economic and interest rate changes.
• Volunteering: Santino suggests getting out and helping your community. Organizations like Habitat for Humanity are great for meeting construction professionals that can be useful connections.
• National Association of Real Estate Brokers (NAREB): This organization focuses on helping improve minority professionals’ results and community homeownership rates.
• Federal Housing Finance Agency: Stay updated on laws impacting real estate.

Make sure to join the National Association of Realtors, and National Association of Real Estate Brokers because they provide resources and high quality backlinks that will help you throughout your career. 

Industry Trends

Three industry trends currently impact real estate:

“These will lead to a reduction of real estate agents.”

Santino also discussed the impact of technology innovation in the market.

Real Estate Crypto & Blockchain 

Santino told us he expects crypto to start making a bigger play in real estate, but warned:

Before I continue, I should probably warn you that crypto is currently under-regulated in the U.S. Evaluate the risks carefully.

There are a few ways that real estate and blockchain interact:

Let’s look at each.

NFT Titles

Nonfungible Tokens (NFTs) have entered the real estate market and are being used as a way to sell homes. While most companies have not gone to this approach, I would expect many to in the future because:

1. NFTs allow the creator to receive a recurring commission. If you are the first real estate agent to sell a house, you get a commission every time it passes hands. Sweet!
2. It reduces the time to close a sale.

The leader in the market is Propy which offers a monthly subscription for offer management, NFT title creation (currently approximately $200), and blockchain real estate agent certifications.

How to Become a Real Estate Agent in the Metaverse

The metaverse is a virtual world. It’s basically the world people unplug from in the movie the Matrix. Like the real world, it allows transactions including real estate transactions. 

Sandbox is one of the most popular metaverses where users can buy and sell land, but there are more coming out every day. I’m personally investing in Stageverse at the moment.

Good news! You don’t need to have a real estate license to buy and sell metaverse lands. If you want to learn more about how to become a metaverse real estate agent, check out this Academicful blog.

Let’s look at the first step of becoming a real estate agent. 

Step 1. Enroll in Real Estate School

Every state is different, but there are some common requirements to start a real estate career. The first requirement is normally getting the proper education to take the real estate license exam. In some states, you can skip the entire pre-licensing course load if you are a licensed attorney, are moving from a state that has license reciprocity, or you have an apprenticeship with a broker.

It should be noted that if you are planning on going into property management, many states have a separate licensing requirement for this. Check your state’s Real Estate Commission before booking the courses.

You can find information on the real estate schools, course requirements, and licensing in the table below. If you have a criminal background, make sure to review the requirements really well because most states have background check and/or fingerprinting requirements.

How Long Does Real Estate School Take?

If you’re wondering how long a real estate course is, it can be from three credit hours per college course to 168 hours for the pre-licensing course. Luckily, there’s 168 hours in a week, so you can get real estate courses done in a month no matter what state you’re in. 

Most allow online courses. Iowa definitely requires in-person real estate courses for a portion of their real estate pre-licensing courses, but others might have other flexibilities. Make sure to check your state’s full requirements in the table above.

Step 2. How to Get a Real Estate License

Getting a new real estate license has other basic requirements including:

• A high school diploma or GED
• Pass the real estate exam
• Submit fingerprints
• Pass background checks
• Find a broker sponsor if required
• Get errors & omissions insurance if required (Our preferred insurance provider is Simply Business.)
• Turn in the application and pay the fee
• Take continuing education classes

Most states have a real estate commission that specifies the licensing exam requirements, background checks, license reciprocity, and additional education requirements. In Georgia, you would just search “Georgia Real Estate Commission” to find the governing agency. It works with every state. That’s how I compiled the list of links for you.

Each state has differences in how they handle the application process of a new real estate agent. The information about most of these requirements is in the table above, but the real estate exam warrants more discussion.

Real Estate Exam

After you complete your real estate school, you’ll need to take a proctored real estate licensing exam. The states use one of three providers for the real estate exam:

Most states use a two-part licensing exam that costs under $100 and allows two to three hours. You can have a break between the two parts, but you have to pass both to become a real estate professional. The sections include:

1. National portion: Licensing exam focused on the general business tools and knowledge you will need for a successful career in any state. You’ll need to understand terms like sales agents, listing brokers, asking price, sales price, and other real estate terms that are consistent in any state.
2. State exam: Licensing exam focused on professional regulation in your specific state. These are critical to understand before sales agents perform their first transaction for clients.

How Long Does It Take To Get a Real Estate License?

Becoming a real estate agent will normally take three to six months from the time you complete the real estate pre-licensing course until the time you are able to work as a sales agent in a real estate brokerage.

Next, you’ll need to find brokers to learn from so you can feel confident as you start interacting with potential buyers, sellers, and get your first real estate transaction under your belt.

Step 3. Find a Broker

Sanitno explained to us that finding brokers that develop their people is one of the most critical factors impacting the success of a new career. He also gave us some input on what to look for when considering brokers.

He told us:

Some of the questions you should ask brokers include:

• Caps: What is the maximum I have to pay each year to a broker?
• Splits: What percentage of each paycheck goes to the cap?
• Additional Fees: Are there any fees that I need to know?
• Growth: What opportunities are there to grow beyond just selling real estate?
• Training: How do you help new agents adjust to all your systems?
• Earnings: What are the highest and median pay of agents under you?

He also told us that you should consider a boutique brokerage firm because they are more likely to help support new agents after they receive a passing grade and meet all the license requirements.

Find a mentor

Looking for a mentor can be highly beneficial to new agents. Santino told us:

He suggested researching the brokerages in your area that seem to have a good brand. Working for a more experienced agent will help you learn how to become a millionaire real estate agent.

Step 4. Secure Clients

Finding clients can be hard until you develop a reputation for yourself. Santino suggests working with a team but warned us to be cautious:

He also explained that a large portion of securing clients is getting your name out there as a successful real estate agent on Google and seeing where they are listed. Then make sure you are on all those platforms, too. The screenshot below shows all of Santino Filipelli’s web presence.

Step 5. Close Deals

Once you’ve found clients, you want to focus on helping them buy or sell a house. That means you’ll need to do things like:

• Show homes
• Submit and review offers
• Help clients secure financing
• Communicate with escrow and inspectors
• Close on the property

As you develop experience, you’ll want to improve your effectiveness with managing clients. Let’s look at how to do that.

Systemize the Real Estate Business

Santino told us every agent should consider adding the following people or systems to their business to let them focus on serving the customers more:

He said:

He also mentioned Dotloop  and SkySlope.

He also mentioned that if you can be the buyer’s and seller’s agent on a transaction, it makes more money, but warned:

At this point we’re going to answer some frequently asked questions.

How to Become a Real Estate Agent with No Experience

You don’t need experience to become a real estate agent. You just need to go through the real estate licensing process. That means:

1. Take the required pre-license courses.
2. Pass the real estate exam.
3. Pass a background check.
4. Get your Errors and Omissions insurance.
5. Get your license.

How to Become a Luxury Real Estate Agent

Luxury real estate agents follow the same process as any other agent, but are focused on providing services to high net worth individuals. That means you’ll need to carry yourself more professionally, have a nicer car, speak with proper grammar, and network at higher end locations than other agents.

How to Become a Commercial Real Estate Agent

Becoming a commercial real estate agent follows the same process as other real estate agents. You’ll want to focus your continuing education on commercial real estate and try to get on with some of the commercial real estate companies like CBRE and Colliers.

How to Become a Millionaire Real Estate Agent

Becoming a millionaire real estate agent just requires selling lots of houses. Realistically, to make $1 million from commissions, you would need approximately $50 million in sales. To make $1 million after expenses and taxes, you need to sell approximately $109 million in sales. If you are investing profits to earn higher returns, you can reduce these numbers dramatically.

How to Become a Real Estate Agent Part Time

You can become a part-time real estate agent by taking the necessary classes and the state licensing exam, then get your license. Most real estate agents are their own boss, so you control the hours. It might be harder to find a broker and make a profit if you only work part time, though.

How to Become a Real Estate Agent without a Degree

Real Estate agents don’t have to go to four year colleges in most states. Most only have to take a few courses to get started. People who get majors or master’s degrees in real estate tend to have better connections and make more money, though.

How to Become a Real Estate Broker

Becoming a broker requires more education and experience than a real estate agent. They also have to take a different exam. The primary difference between a broker and salesperson or agent is that the broker can:

Santino’s Favorite Books

At UpFlip, we believe that reading is an important part of your growth so we ask each business owner what their favorite books are and share them with you. Santino suggested the following books. If you haven’t picked these up, grab them today:

Check out the interview we’ve done with Santino’s on our YouTube channel:

Are you ready to start your real estate career?

Real estate can be a highly rewarding field because you get to help people become homeowners. It can also be stressful because you work weird hours and buying a home is one of the biggest decisions most people make. As long as you’re willing to put in the work, are fairly pleasant, and responsible you can make a decent living as a real estate agent.

Where are you thinking about getting into real estate? If you’re already in the industry what tips do you have for new agents?