One of the most debated topics among real estate investors is whether or not to become a real estate agent. While there is no right or wrong answer what is certain is that the process may not be as easy as you think. Simply saying that you want to be licensed is not enough. There is a barrier of entry that requires several different steps. These can be frustrating, time consuming and at times slightly expensive. As you decide if getting a real estate license is worth it you should understand what the process entails. Here are a few of the steps needed to become a real estate agent.
- Education. The first step you need to take is learning what the educational requirements are. These requirements vary based on each state. While the number of classroom hours may differ getting licensed starts with education. You will need a minimum number of hours of education. How you get them is entirely up to you. In the past real estate classes were only held at dedicated times and locations. If you missed the start of the session you would have to wait twelve or so weeks to start again. Today there are more options than ever before. There are still physical classroom settings available but there are also options available online. For people looking for flexibility this may serve as a better alternative for you. Just like any other course there are weekly exams and tests you need to take. If you are not currently in the real estate business these can prove to be quite difficult. Even if you have experience you will need to put a fair amount of work in. You can’t just coast your way through the education portion. At a minimum you need to put in anywhere from 30-40 hours of class time.
- State Exam. At the conclusion of your class time there is an exam that you are required to pass. Most of the last few weeks of class are dedicated to acing your exam. Like any other class you take this will be a cumulative review of everything you have learn. Even though the state exam is not nearly as long as the federal one there are many people that struggle more with it. There are many state laws that can be much different than the federal law. Trying to remember state specific rules, laws and guidelines can be tricky at times. Only after you pass your state exam can you schedule your federal exam.
- Choose A Brokerage. There is another step you need to take as you prepare for your exams. Before you take your federal exam you need to be sponsored by a brokerage. This local broker will hold your license for a minimum of one year and possibly longer depending on the state. There are two sides to finding a broker. The first is to find a brokerage that is willing to hold your license. When they hold your license they are responsible for everything you do during a transaction. If you do something illegal or unethical it comes back to them. Not every broker wants to hold a license for a real estate investor. It can be difficult at times to get close a transaction with the listing and selling broker in the same office. More often than not they will welcome your business but you may have to call around to a few brokers. The second piece is finding a broker you are comfortable with. Most brokers are comparable in terms of split percentages and marketing options. You need to decide if a mom and pop shop works better for you than a large national company. Before you apply for your exam you need to be sponsored by a broker.
- Exam. Passing the federal exam will not be a walk in the part. The exam is comprised of several different areas and dozens of questions. You will be given ninety minutes to complete the exam. If you haven’t taken a test in a while this can be a very intimidating process. For starters you are isolated by a computer with nothing more than a pencil and piece of scratch paper. Secondly, the answers are not always straightforward. There are usually two choices that may seem correct. There will be a handful of questions that you may be unsure about. You will receive notification of your results as soon as you are completed. If you pass you can apply for your license and get started working. If you do not pass you are required to wait at least 30 days before you can take the exam again.
- Miscellaneous Items. There are a few other items you should be aware of on your way to license. Depending on the state they will do a background check. They can pull your credit report, check your fingerprints and review your criminal record. Recent felonies are a red flag and will immediately disqualify you. You should also know that there are several fees and expenses along the way. In addition to the classroom fee you need money for books, exam fees, licenses and application fees. When you pass your exam you are not out of the woods. You need to update your license every year and may also need to take continuing classroom education.
Being a licensed real estate agent will provide you with access to the MLS and open doors to numerous contacts. Getting that license will not be easy but could be worth it.
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