A Real Estate Agent Career: Pros and Cons
Real estate agents help unite sellers and buyers of properties and facilitate a smooth transaction. Read on to discover the pros and cons of becoming a real estate agent to determine if this is the right career for you.
| Pros of Becoming a Real Estate Agent |
|---|
| No formal education requirements (minimum of a high school diploma required)* |
| Opportunities for self-employment (about 57% were self-employed in 2010)* |
| Steady job growth (11% from 2012-2022)* |
| High job satisfaction** |
| Cons of Becoming a Real Estate Agent |
|---|
| Pay is often inconsistent (can vary with market conditions and price of property)* |
| Commissions are not paid until the sale is complete, which could take months*** |
| Keen competition and lower salaries for entry-level agents* |
| Work long, irregular hours to accommodate clients' schedules* |
Sources: *U.S. Bureau of Labor Statistics, **U.S. News and World Report, ***iSeek Solutions.
Essential Career Info
Job Description
Real estate agents help people buy and sell properties. As a buyer's agent, you'll help your client purchase or lease property by finding out what he or she is looking for, generating lists of available properties and taking him or her out to look at the options. As a seller's agent, you'll help your client establish a selling price and promote the sale of the property through advertisements, listing services and open houses. On either side of the transaction, you'll participate in the sales negotiations and preparation of contracts, agreements and deeds.
With experience, some agents go on to become brokers. Brokers are real estate agents who hold licenses to run their own real estate businesses. If you choose this route, you'll need to spend time managing the agents who work for you and building your client base. Most real estate agents work more than 40 hours a week, and they must be available evenings and weekends to accommodate their clients' schedules.
Career Options
Real estate agencies range in size from 1-person businesses to large firms. According to the U.S. Bureau of Labor Statistics (BLS), about 57% of all real estate agents and brokers were self-employed in 2010. Often, brokers set up franchise agreements with larger, well-known real estate companies and pay them a fee for the affiliation. As a real estate agent, you can choose to specialize in specific types of realty transactions. Most sell residential properties, but you could also specialize in commercial properties. Commercial agents spend more time closing sales than residential agents do, but their commissions are typically larger. Other types of real estate specialties include agricultural and industrial properties.
Job Outlook and Salary Information
The BLS reports a median salary of about $41,000 for real estate agents as of May 2014. The lowest ten percent earned less than about $22,000, and the highest ten percent earned more than around $105,000. Most agents earn their pay from commissions based on the value of the properties they sell. Selling commercial real estate and working in high-income geographic locations will likely yield higher wages. A real estate agent's earnings also depend on economic conditions and personal motivation. The pay can be erratic; however, the amount typically increases as the agent gets better at selling.
The BLS predicted that there would be an additional 38,000 real estate agent jobs added to the economy between 2012 and 2022. This figure translates to a 11% growth rate, which is as fast as average for all occupations. The job market generally fluctuates in accordance with the economic condition, so job outlook brightens as the economy expands.
Education Requirements
You'll need at least a high school diploma to become a real estate agent. You'll also need to get a state license. Although real estate agent licensure requirements vary by state, you'll probably need to be at least 18 years old, pass an exam and complete a real estate training program. The training can include anywhere from 30-90 hours of instruction. Some states will waive the training requirements if you've completed college coursework in real estate. Most likely, you'll need to renew your license every 2-4 years, which may involve taking continuing education courses. Each state has its own requirements, so getting a license in one state won't necessarily give you permission to sell real estate in another.
Successful real estate agents are skilled communicators. They excel at making strong interpersonal connections and listening to what people need. You'll also need to be adept at negotiating and selling and, if you're planning to set up your own business, you'll need a strong understanding of marketing and business administration.
Real Job Postings
Most employers looking for real estate agents only require applicants to be over 18 years of age with a high school diploma. In fact, some agencies will provide you with licensure guidance and training in closing sales. Following are a few real job postings from May 2012:
- A large real estate firm needed an agent for one of its offices in South Carolina. The employer expected the new hire to obtain a real estate license, attend the company's training program, attend weekly sales meetings and build a client base. In addition, the employer wanted someone with excellent communication skills and familiarity with business computer applications and social networking sites.
- A national real estate organization sought a sales associate for its office in Hawaii. Applicants needed to be at least 18 years old and able to pass a written test on real estate laws and transactions. The posting also mentioned that the new hire might need to complete between 30 and 90 hours of training to obtain a real estate license.
- A home builder in Pennsylvania looked for a real estate agent who would sell homes in one of their new communities. Requirements included at least a high school diploma, proficiency with Microsoft Office, an active real estate license and previous sales and/or real estate experience. The employer preferred those with a degree in marketing or business and new home sales experience.
How to Beat the Competition
Real estate agents can increase their attractiveness to employers by enhancing their understanding of real estate laws, regulations and sales. A U.S. News and World Report article about the best jobs in 2012 recommends taking courses through professional organizations, such as the National Association of Realtors, and local and state associations. You can also better serve your clients and improve your reputation in the business by getting familiar with the local area. According to the BLS, real estate agents must be knowledgeable about such facts as local crime rates, school locations and local zoning laws to meet their clients' needs. In addition, you'll want to be neat in appearance and have a knack for remembering names, places and personal details about your clients.
Earn a College Degree
While not required, a degree can help you stand out among your competition in the real estate field; the BLS reports that, due to growing complexity of the market and competition for jobs, employers sometimes favor applicants with college degrees. Many 2-year and 4-year colleges offer associate's and bachelor's degree programs in real estate, which prepare you for licensure through coursework in topics like property law and marketing, real estate principles and property valuation. During college, taking electives in communications, interpersonal relations and debate may be helpful to becoming a good negotiator and salesperson. Also, courses in marketing, accounting, finance and entrepreneurship may give you the business savvy you need to advance to a broker's position.
Other Careers to Consider
Insurance Agent
If you want to help people purchase major assets, but real estate doesn't offer adequate pay or job prospects, consider a career in insurance sales. Like real estate agents, insurance agents also help people make significant purchasing decisions, but in the world of property and casualty, health and life insurance. You can get the job with a high school diploma and licensure, and many insurance agents are self-employed; however, the BLS expected insurance agents to have a 22% increase in job opportunities between 2010 and 2020, which is faster than average for all occupations. In addition, you may enjoy a higher earning potential as an insurance agent than you might as a real estate agent; according to the BLS, the median salary for insurance agents was around $47,000 as of May 2011, and most people in this occupation earned between about $26,000 and $115,000.
Appraiser or Assessor of Real Estate
If you know you want to work in the field of real estate, but you don't want to deal with transactions, you might consider becoming an appraiser or assessor. In this occupation, you'll calculate the value of a property for the purposes of taxing, selling, insuring or developing it. The BLS reported a median salary of about $49,000 for appraisers and assessors of real estate as of May 2011, so you'll probably earn slightly more than you would make as a real estate agent; however, this job often requires at least an associate's degree, or, if you want to work with commercial properties, a bachelor's degree. Keep in mind that the BLS expects employment to increase by just seven percent between 2010 and 2020, slower than average for all occupations.
Mortgage Loan Officer
If you want to work in another aspect of the home-buying process, you might enjoy working as a mortgage loan officer. In this job, you'd make arrangements for the financing of new property and act as the liaison between the buyer and the bank. You'll need a high school diploma and a license for this job, and you may need a bachelor's degree if you want to work with commercial properties. The BLS reported a median annual wage of about $58,000 for loan officers as of May 2011, with most people in this occupation earning between about $32,000 and $115,000. The BLS also notes that jobs were expected to grow at an average rate of 14% from 2010-2020.
