Can you make it as a successful real estate agent? Of course! Very little experience is required and getting your real estate license is fairly straightforward. The work is fun, flexible, and never the same. In addition, there is no limit to how much you can earn! For everyone considering entering the business, the question should not be “Can I?” but instead, “Should I?”.
With low barriers to entry, selling real estate can be an extremely enjoyable, rewarding, and lucrative. However, it certainly has its risks and is not for everyone. Before jumping in, you should reflect on who you are and what you bring to the table. Are you independent, entrepreneurial, extroverted, energetic, creative, detail-oriented, well-connected, aspirational, and most importantly determined? You will need to have these traits to succeed in this business as the psychological and financial risks can be high.
Most new agents fail with in the first year, partly due to the ease of obtaining a license and partly due to the lack of stability. The learning curve can be steep, formal training can be minimal, and the job offers little security or consistency. Income and workload can vary widely, and it can sometimes take a long time before building business momentum as an agent. This is why it is essential to set yourself up for success and to making the transition into brokerage as easy as possible.
To become a licensed real estate salesperson in New York, you must take 75 hours of qualifying courses, find a sponsoring brokerage, pass the licensing exam, and apply for a license. Choosing a licensing course and study material is important for obtaining the license, but is fairly inconsequential once you’re working in the business. Since most programs cover the same state-mandated topics, you should go with a program that is convenient.
You can pick your balance between cost and reputation, but the main goal at this point is to learn the required material, get through the hours, and pass the exam. I, like many agents in New York City, took my courses at the New York Real Estate Institute. The class was straightforward and the basic course package is only $495. The exam covers the exact material taught in the courses, so it is important to take diligent notes and to study. Some prospects choose to take their courses online, which is also an option.
Choosing a Brokerage
- Once you’ve completed the course, you must find a sponsoring broker (more on that later) and can schedule to take the exam. The exam is 90 minutes and features multiple choice questions. It is graded pass/fail and after passing the exam, you may apply for the license. The whole process of getting a license can be finished within a matter of weeks. Your brokerage, however, will have a lasting impact on your career as a real estate agent.
- Like determining whether a career as a realtor is right for you, choosing a brokerage warrants further introspection. Consider your personality, network, and goals when selecting a firm as you may need to make a trade-off between support and commission split. Many smaller firms lure agents with high commission splits, allowing agents to make more money off each deal they close. This can be an ideal setup for new agents with a strong network of buyers, sellers, landlords, and tenants. If you are confident in your ability to tap your existing sphere of influence for business, signing with a smaller firm and taking a larger split could enable you make the most money.
- However, if you’re like most new agents, especially if this is your first career, you might not have friends and family lining up to buy, sell, or rent property. You might not be connected with a large group of tenants looking to rent or landlords willing to give you a building to lease up. At this point, you have little experience so without personal connections, why should anyone trust your real estate knowledge?
- Having a well-known brokerage behind you can jump-start your business. Top-tier brokerages offer training, marketing and tech support, and experienced managers to assist you. They may offer administrative support, various perks, and convenient office locations. They also have great agents with whom you can network or perhaps partner. All of this, however, comes at a price: a lower commission split. Depending on who you are, this might be the best option since if you need support to get started, companies like this will boost your chances of success. While earning 75%, 85%, or even 100% of your commissions sounds nice, a high percentage of no (or few) deals might still yield less than smaller pieces of many deals. Typically, bigger firms will offer a tiered commission ladder, where as you exceed certain thresholds, you can take a larger share of your earnings. You are always incentivized to do better and to push yourself.
- One more thing to consider is broker reputation. When prospecting new clients or working with other agents, your brokerage can act as a signal. Some firms are known for having cooperative or uncooperative agents, some are known for being more or less competent, and some are not known at all. While you are trying to build your own image, the firm to which you belong can impact your personal brand.
Hiring Process and Structures
- Regardless of whether you are switching careers or just getting started, the brokerage interview process may catch you by surprise. Typically, agents will pay a yearly desk fee to their brokerages, and only earn commission when they close deals. Therefore, brokerages have strong incentives to take on as many agents as possible. If you perform well, they perform well. If you perform poorly, their losses are minimal. The only risk the brokerages bear is reputational. So, as long as you don’t seem off-putting, threatening, or grossly incompetent, most firms will want to hire you. You can and should be selective when choosing a place to plant your flag.
- Various brokerages offer alternative structures. Many firms are switching to the team model, where agents form teams. Some teams operate in name only while others do everything together. Others strike a middle ground where responsibilities are shared, but not everything is done in tandem. Working with a team can give you access to more business, smooth the learning curve, and offer another level of support. While you may need to further slice up the commission on deals you bring in, you could also get a share of the team’s earnings; it all depends on the agreement you make. There is no formal industry standard, so feel free to get creative with your arrangement. Teams will be more selective than brokerages, naturally, so you’ll need to work hard to impress.
- Some teams, as well as individual agents, hire administrative assistants or junior agents to handle appointment setting, paperwork organization, or board packages. Some junior agents take on more responsibilities like showing apartments, bringing in new business, and negotiating deals. For these hybrid roles, some agents, teams, or brokerages will pay a base salary, upon which commission is added. This can make the transition into real estate sales easier, safer, and more manageable. Having a base salary acts as a buffer to the financial risk of brokerage and finding this structure can be very useful for aspiring realtors without a strong book of business. So how do you establish that book of business?
How to develop your brand
- Branding and networking are the two most important things you can do to increase and leverage your sphere of influence. To define your brand, you must ask: What differentiates you from the other 40,000 agents in New York City? What are you good at and what do you have to offer? Perhaps, you are technologically savvy and can conduct thorough market and property analysis. Perhaps you’re a marketing guru and can creatively position a property and maximize its value. Do you bring in-depth market knowledge, from years living in a neighborhood or building? Some more experienced agents brand themselves with their fashion, mode of transportation, or personally hobby. For new agents though, you don’t have experience or sales record to fall back on. Your style or personality alone won’t win anyone over. You need to sell yourself and become the go-to real estate person for your friends, family, fellow alumni, ex-coworkers, and new contacts.
- If you’re forming a new partnership or joining an existing team, it can become another branding opportunity. Teams offer value to clients as they have more opinions, experience, and availability. In addition, they offer a greater network of potential counterparties to each deal. Individual team members can tout the team’s performance, sounding stronger than they would on their own.
How to market yourself
- So, now that you know exactly who you are and what you have to offer, whether you are fully independent or part of a group, how do you get the word out? Simply put, you need to do everything you can.
- The first place you should start is where you already have traction: your personal network. I encourage you to set up social media pages and email lists so you can form channels of communication. Make sure you let people know about your new job and offer advice, help, and your full contact information. They may not ask you to sell their home right away, but they may come to you with questions, problems, or referrals when the time is right. I have old friends, classmates, and former coworkers reach out to me after years, asking for help with one thing or another.
- It is important to continue fostering these relationships, even if they don’t lead to deals immediately. Keep your network up to date with what is happening in the market, what new listings you have, and what deals you’ve closed. It is important for everyone to see your activity and success, on at least a monthly basis online. In addition, whether it be in-person or online, ask for referrals. No one will fault you or judge you for trying to increase your business. While not everyone will feed you leads, asking for referrals exponentially grows the number of potential clients you have.
- In addition to putting yourself out in the world digitally and physically, you can utilize snail mail to reach out to your neighbors. Surprisingly, people read and hold onto postcards and thoughtfully crafted letters, informing them of current market conditions, sales history in the area or building, and fun marketing campaigns. Keep in mind, owners in New York City get plenty of real estate mailings per year, so you need to make your brand and messaging stand out. Resources like the REBNY website provide fairly accurate address and owner information. This all takes a lot of time and tenacity and good agents will sustain this effort long after they secure a client.
Alternative ways to grow your business
- If you’re working alone, you’ll need to grind at it. Keep reaching out to your contacts, neighbors, and colleagues. Piggybacking on other agents is a great way to build some traction. For example, busy agents will often need help hosting open houses for their listings. Volunteer for everything. Worst case scenario: you collaborate with an agent, see a property, and meet some people. Best case scenario: you bond with an open house guest and if they don’t like that property, convert them to a client. Even if you’re working with a team, it’s essential that you keep up these promotional efforts.
- Inevitably, you’ll be solicited for some paid lead campaign, like Streeteasy’s Premier Agent Program or a pure lead generation service. While these can seem great on paper, buyer beware. Like in any business, paid growth is not as sustainable as organic growth. If you pay to have your name and face put in front of a client or if you’re given phone numbers to call, it is nearly impossible to build as strong of a connection with whoever you end up reaching (if anyone). The goal of an agent is to form strong, lasting relationships. While it is certainly possible to do that through an ad or paid service, it is not guaranteed.
- Every agent has their own story but the most successful ones find ways to let who they are and where they come from influence their business in real estate. Getting set up is easy but making it as a real estate agent in New York City takes courage, tenacity, and ingenuity. If you fit the bill there are many paths into the business. Consider which brokerage to join, whether you want to team up or go solo, and how you want to market yourself to your sphere of influence.