The Ultimate Step-by-Step Guide to Launching a Career in Real Estate

Most people start out their journey to a real estate career by Googling 'how to get a real estate license' and following the #1 listicle they find. This is a huge mistake. The hours, background check, exam eligibility requirements, and application costs between jurisdictions can be radically different, and frequently out-of-date or designed for an entirely different market than what you're entering.

Instead, you should be visiting your province/state's licensing board's official website, and finding the information for yourself

Get the exact hour requirement for a pre-license course, determine the order of operations on the background check (before or after the exam), and the order of the applications. It takes 30 minutes, and can save you thousands of wasted dollars on ineligible courses and applications.

Take prelicense education seriously

The pre-license course is frequently seen by new agents as a box to be checked off. Hours are generally standardized in your local jurisdiction, the coursework is technical, and many courses are self-paced.

This is all reason enough to breeze though it and get to the next step as soon as possible.

Do not fall for this trap.

While the coursework touches on fair housing, agency relationships, property rights, disclosures, and real estate finance, it's not really about the test. It's about building a foundational understanding of the industry. In every deal, for the rest of your career, you will lean on this knowledge when a client asks "well what does that mean in the offer?". You don't get to Google it on the fly. You need to understand it cold. Write down the things you don't understand, or use other resources to teach you the concepts you need to know better. New agents who flame out in their first year don't do so because they can't find leads to call. They fail because they didn't understand the things they were doing, and when the deal started to go off the rails, they had no idea what to do

Pass your Licensing exam

The licensing exam has a national portion that is more comprehensive and standardized. It also has a portion that is specific to your locality. Students frequently overestimate their preparedness and underestimate the difficulty of this exam. When it comes to passing this Real Estate Test, formal exam prep has been shown to increase pass rates drastically and should not be overlooked. The local portion ensures that you understand the unique procedures and regulations in the area you will be working in. The largest single portion of the exam has to do with national standards, which touch on fiduciary responsibility, contract law, types of property ownership, and calculations.

The best way to prepare for your exam is to begin studying well in advance. Do not try to cram in the final days before your exam. Try a class or guided online prep, and do practice tests. Test questions are the single best indicator of what you know and what you don't, so use them to your advantage. Don't waste your time with review sessions if you're spending too much time staring at questions you're just not prepared to answer. Practice tests give you that opportunity.

The national portion of the exam generally asks questions about fiduciary duties, contract law, types of ownership, and calculations. The local portion might emphasize who is responsible for the property transfer tax, who generally closes deals in the state, or if disclosures are required for specific properties. Study both.

Budget in extra time to study, and give yourself at least 3 weeks between finishing pre-license school and the exam. If you do not pass, analyze your results in depth, rather than simply retaking the exam. Most jurisdictions give you a breakdown that tells you what subject areas you struggled with on the test. When it comes to preparing for the exam, time spent is paramount. If you fail, spend time reviewing those topics.

Pick a brokerage before you are a licensee

Picking a brokerage is just as important as picking where you get your real estate license. The managing broker you sign with is legally responsible for every deal you open and close, and can protect you from losing your livelihood to honest mistakes.

Interview at least 3-4 brokerages. Ask them about their training programs for new agents, their commission splits, their desk fees, their managing brokers' procedures for review, and their mentorship programs. 70/30 commission splits sound much better than 50/50, but if the larger split brokerage does not offer training or has a managing broker that is unavailable, that 70% commission is not nearly as valuable when you're facing a deal your broker can't help you through.

Brokerage culture can also be extremely important for the development of a new agent. New agents often spend the majority of their time at their office, and the more knowledgeable their peers are, the faster they can grow.

Create a realistic budget before day one

The 2023 Member Profile from the National Association of REALTORS® shows that agents with less than two years of experience made a median gross income of just $9,600. This number is much easier to swallow when you understand that you cannot expect to make money from day one. Most agents do not see a commission check for another 3-6 months, assuming they actively searched for leads from the moment they got their license.

Build a realistic start-up budget based on the idea that it will take you at least six months to begin making money, with the first commission check coming shortly thereafter. This budget should include your living expenses, as well as your upfront costs: license, insurance, administration fees, and MLS subscription. If you are considering leaving another job to go full-time as an agent, do not do so until you can cover your expenses. This is not a pessimistic outlook, it is a realistic one. A good budget is what distinguishes agents that last through their first year, and those that don't

E&O insurance should factor in here as well. Certain brokerages offer group policies, while others allow agents to buy their own. You need to understand what options are on the table before you sign on the dotted line, or risk being financially ruined by a single E&O claim. If you don't think you need E&O insurance, remember that most claims against real estate agents are the result of negligence.

Market your sphere before you are a licensee

Your sphere is the most reliable source of business you have as an agent, and your first 90 days in the business are the most important. You are much more likely to close a deal with someone you know and trust than some random lead. New agents frequently fail because they neglect their sphere and spend too much time trying to develop new leads. Fortunately, you do not have to wait until you're a licensed agent to start using your sphere.

While you take your pre-license course, let friends and family know about it. Tell them when you expect to be ready to work with them. In your pre-license courses, ask people to add you to their contact lists, and begin building a database of email addresses and phone numbers. Once you get your license, you should have a database of at least 150 people who know you are becoming a real estate agent, and who are happy to hear from you.

Your 90-day prospecting period should be scheduled before you even get your license. If you simply show up for the first 90 days of your career and hope for the best, you will rarely get far enough to make it to your second year in the business.

Learn the transaction process before your first deal

New agents spend too much time worrying about how to find new clients and forget about how to work through their first deal. When they finally face the prospect of sitting down with a client, they panic. They could even be overcome with the fear that they have no idea what they are doing and be unable to complete the listing agreement the first time they have to do it. This is a disaster that you can avoid by studying the transaction process before your first closing date.

If you are not well-versed in the contract you are preparing for your client, you will be in for a world of hurt. A contract is a binding legal document, and if something is wrong with it, your client will suffer. If there are things missing, your client will suffer. If you miss a word, your client will suffer. And if your competitor spots a mistake, they'll use it against you the moment the two of you are negotiating over a listing. The initial groundwork you put into making your first deal go smoothly should begin with your managing broker. They should be able to show you the forms they used, give you advice on their processes for working with clients, and you should be able to see what they do to get through every deal. If you're not sure that your managing broker is trustworthy, you're either going to have a long road or a long conversation with a new managing broker.

Fiduciary duty is not just an exam concept. It will be part of every deal you do, and it's something you have to think about. Both parties to an agreement are entitled to your honesty, advice, disclosure, and confidentiality.

Track your business

Real estate agents run small businesses and don't treat them as such. New agents spend too much time on the 'big picture'. They forget about the metrics that indicate whether the big picture is actually healthy. Keep track of stats for your time spent on calls, meetings, leads added to your database, and showings attended. Determine your weekly conversion rates for each. If you're spending time calling people, but not scheduling appointments, it's your call script that is the problem. If you're spending time setting appointments, but not signing people, it's your presentation. If you're spending time doing things that don't yield results, you need to reassess your approach. Set a weekly prospecting and administrative schedule and stick to it, even when your 'pipeline' appears full.

Most agents who make it through their first year and move on to their second knew how to treat their fledgling business as a business from day one.

Commit to mentorship and continuing education

Continuing education can keep you eligible for a real estate license, or keep you updated with the latest changes in laws or forms. Either way, it is mandatory, and you cannot simply skip it.

In addition to continuing education, most agents will benefit massively from a mentor. A mentor can show you how to review your deals, coach you on client conversations, and give you invaluable perspective when something goes wrong. Many brokerages even offer mentoring programs that will pair you with an established agent. Most agents who make it to their second or third year in the business would not still be in the business without a mentor

The real estate market is always changing, from interest rates to inventory to buyer behavior. The agents with the longest careers often weren't the smartest when they started the business, but they stayed smart for the longest time.

The first 18 months in real estate can be brutal. The attrition rate is high, with many new agents leaving the business due to the amount of time, effort, and money it takes. However, there are ways to get through to the other side. There are a handful of gates that, if you get through, set you up for a long and prosperous career.