6-step Guide on How To Become a Real Estate Agent (for Investors)

Becoming a real estate agent can be a great career move, especially for those interested in real estate investing. As a real estate agent, you’ll learn real estate laws and the ins and outs of how to buy and sell properties. You don’t need to have a college degree to become a real estate agent, but it does take some work, and you’ll need to educate yourself in order to pass the real estate license exam.

Having a real estate license can help you as an investor in many ways. You’ll have access to properties that others might not, you’ll know about areas that are hot, meaning a lot of buying and selling going on, and you can earn a pretty decent income when you have a career as a real estate agent. Check out this detailed guide about becoming a real estate agent if you think this is something you want to pursue.

Real Estate Licensing Rules By State

Every state has its own agent licensing rules and requirements. They require different amounts of education, from as little as 40 hours in Indiana all the way up to 168 hours in Colorado. Because of this, it’s important to study your locale to learn its specific licensing process. Here’s a chart that lays it out:

State	Minimum age	Class hours	Application fee
Alabama	19	60 Hours	$235
Alaska	19	40 Hours	$550
Arizona	18	90 Hours	$135
Arkansas	18	60 Hours	$75
California	18	135 Hours	$245
Colorado	18	168 Hours	$435
Connecticut	18	60 Hours	$80
Delaware	18	99 Hours	$114
District of Columbia	18	60 Hours	$240
Florida	18	63 Hours	$89
Georgia	18	75 Hours	$170
Hawaii	18	60 Hours	Unavailable
Idaho	18	90 Hours	$160
Illinois	21	90 Hours	Unavailable
Indiana	18	40 Hours	$60
Iowa	18	96 Hours	$125
Kansas	18	60 Hours	$15 (plus license fee)
Kentucky	18	96 Hours	$60
Louisiana	18	90 Hours	$90

State	Minimum age	Class hours	Application fee
Maine	18	Unavailable	$121
Maryland	18	60 Hours	$210
Massachusetts	18	40 Hours	$103
Michigan	18	40 Hours	$143
Minnesota	18	90 Hours	$135
Mississippi	18	60 Hours	$135
Missouri	18	72 Hours	$50
Montana	18	60 Hours	$122.50
Nebraska	19	60 Hours	$145
Nevada	18	90 Hours	$210
New Hampshire	18	40 Hours	Unavailable
New Jersey	18	75 Hours	$160
New Mexico	18	90 Hours	$270
New York	18	75 Hours	$50
North Carolina	18	75 Hours	$30
North Dakota	18	45 Hours	$100
Ohio	18	120 Hours	$60
Oklahoma	18	90 Hours	$41
Oregon	18	150 Hours	$230
Pennsylvania	18	60 Hours	$107
Rhode Island	18	45 Hours	$140
South Carolina	18	60 Prelicensing Hours, & 30 Postlicensing Hours	$60

State	Minimum age	Class hours	Application fee
South Dakota	18	116 Hours	$225
Tennessee	18	90 Hours	$260
Texas	18	150 Hours	$137
Utah	18	120 Hours	$152
Vermont	18	40 Hours	$50
Virginia	18	60 Hours	Unavailable
Washington	18	90 Hours	$146.25
West Virginia	18	90 Hours	$25
Wisconsin	18	72 Hours	$75
Wyoming	18	54 Hours	$139

However, most states do offer reciprocity. That means once you hold a license in one state for a certain amount of time (typically two years), you can obtain your license in another jurisdiction by taking only the state-specific portion of the classes and passing the state test.

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Some require high school graduation. Others allow you to become licensed after 10th grade. All states have a minimum age of 18.

Clearly, requirements vary pretty dramatically across the United States. But hopefully this guide helps you understand the basics because there are a few things every potential real estate agent needs to do and know.

How Much Do Real Estate Agents Make?

This is probably the part you are most interested in because who wants to spend hours and hours driving clients around to see houses for free? You are thinking of becoming a real estate agent because you want to make money, right?

Unfortunately, there’s no typical real estate agent salary. Real estate is local. Your market and your competition will help determine your clients and your results.

Essentially, you own your own business. The amount of marketing you do is a huge factor in your success and your salary. If you choose to sell only one house a year, you’re not going to be bringing in a ton of cash unless you sell to the rich and famous.

But you can estimate your commissions, right? Not really. It’s a violation of the Sherman Antitrust Act to state a going rate for real estate agent commissions — it’s called price fixing. Real estate agent commissions are negotiable as far as the agent wishes to negotiate. But a good estimate is 2.5% to 3% for both the buyer’s and seller’s agent.

But wait, there’s more! When becoming a real estate agent, you have a couple of different ways to work under an employing broker.

First, there are the commission-split brokers with whom you share your commission. I’ve seen splits as high as 60% to the employing broker — meaning that $10,000 commission is now $4,000 to you, before your costs. I’ve also seen splits as low as 10%, meaning that the same commission puts $9,000 in your pocket. Typically, those lower splits are going to agents who are producing more volume.

With a flat-fee brokerage, you pay a set dollar amount no matter the commission. I work for a brokerage like this. I pay $499 per transaction for any home where the list price is less than $3 million.

There are advantages and disadvantages to working for both types of agencies, so you’ll have to decide which one is right for you.

Do you want the numbers? Unfortunately, salaries vary so dramatically that they’re not really helpful. The average real estate agent salary is $39,800. Or $43,860. Or $76,000. But it might also be $33,000. These are the results I got back when I Googled “What is the average real estate agent salary?”

But the thing is, you get out of real estate what you put into it. Are you willing to be on-call round the clock? You’re probably not going to be getting phone calls at 2 a.m., but you might get one at 5:30 or 6 a.m. from a client who is dying to see a house that just popped up on the market. You might also get one at 10 p.m. for the same reason.

Remember this when considering becoming a real estate agent. The agents making top dollar are the agents answering their phones all the time.

Related: What Do Real Estate Agents Do?

Why Become a Real Estate Agent? 

Whether you want to become a real estate investor or you want to start your career in real estate by getting your license, there are many benefits to choosing a career as a real estate agent, including:

• Flexibility: You can set your own hours and work from home as a real estate agent, giving you flexibility in your schedule.
• Own your own business: Because you work for yourself, being a real estate agent means you own your own business.
• High earning potential: You can work as much or as little as you want as a real estate agent, and you can also choose the types of properties you sell and your commission rate.
• Access to more real estate: If you want to invest in properties as well as sell them, becoming a real estate agent can give you access to properties before they even come on the market and the ability to network with other agents who have properties to sell.

How Long Does It Take To Become a Real Estate Agent? 

To get your real estate license, you have to pass the state licensing exam and coursework required by your state. The number of hours of coursework and what those classes will cover differs in each state, but you can often take the classes online if you need to so that you can work at your own pace.

Taking a class in person can be helpful if you have questions because an instructor can answer them right away. It can take anywhere from a couple of months for some to a year or more for others with less time to dedicate to their studies. Once you complete the prelicensing course, you can take the exam, which usually takes a couple of hours to finish.

How Much Does It Cost To Become a Real Estate Agent?

Obtaining your real estate license can be a very obtainable way to start a lucrative career. The fees for taking classes and the licensing exam vary, so it will largely depend on where you are when you get your real estate license. Most of the time it will cost you less than $1,000 to get your license with the cost of the test and the fees for taking classes. You may also have to pay for a background check or other related costs, but the fees are often minimal.

Real Estate Agents vs. Real Estate Brokers

Although real estate agents and real estate brokers both buy and sell real estate, agents get their commission when the deal is complete. A broker is a real estate agent who can have other agents working under them, and they can take a part of the commissions those agents earn. Agents must work for or be sponsored by real estate brokers, but brokers can work for themselves.

Because a brokerage can leverage its contacts and marketing, everyone who works for the agency can benefit. A broker has to take additional training and education, so their knowledge can help agents who work for them. New agents tend to pay higher commission rates to their brokers, but not always. Research brokers before you complete your licensing requirements so you have a couple to choose from when you’re ready.

Steps To Become a Real Estate Agent

Here’s a step-by-step guide that takes you through the process of becoming a real estate agent:

Step 1: Get educated

Every state requires real estate coursework, which covers state-specific and national laws.

I’m licensed in the state of Colorado, which has the highest education requirement of any state: 168 hours of instruction  before you can sit for the test. Those 168 hours include:

• 48 hours of Colorado-specific regulations and contracts.
• 48 hours of real estate law.
• 8 hours of trust accounts and record-keeping.
• 8 hours of current legal issues.
• 24 hours of real estate closings.
• 32 hours of practical applications.

But the licensing requirements in your state will vary, so check with a real estate brokerage or the real estate license website in your state to find out what education you need to become a licensed real estate agent. 

Choose your school

Courses are typically offered either in a physical classroom or online. I chose to take my classes online. At the time, I was a stay-at-home mom, and my youngest child was three. Sticking to a set schedule in a physical classroom didn’t work for my family and me. I studied mainly on the weekends, and it took me three months to complete my coursework. I spent an additional month taking and retaking the practice tests.

Not everyone learns the same way, and online classes may not be right for you. Because I took classes online, there was no way to ask questions on the spot. I had email support, but since I was doing the bulk of my studying at night and on the weekends, it took a couple of days to get my email answered. Be sure to check out the options in your area.

Many local community colleges offer real estate coursework in a physical classroom, and if you have a question or need clarification, you can ask right then and there. But you are bound to their schedule, and missing a day can be a huge loss.

These classroom hours are designed to cover the legal basics of buying and selling real estate, whether online or in person. While they do teach you the basics, it turns out that much of the work you perform as an agent on a day-to-day basis isn’t actually taught in school. Your true education begins after you pass your courses and tests and start working as an agent.

Step 2: Decide on a brokerage

While you take your coursework, start looking for a brokerage to work for after you get your license. Except for attorneys, all newly licensed agents must hang their license under a more experienced agent for between two and three years.

The employing broker is responsible for your actions during your first few years. Your broker will review all your documents before passing them along to clients to check for errors and omissions. There are so many nuances, and filling out a contract wrong can have huge consequences. Many newly licensed agents face extra and unexpected expenses because they didn’t fill out a contract properly.

There are many brokerage philosophies, so start thinking about what’s most important to you. Some brokerages offer significant training for new agents. Others cater to established agents, and some smaller firms may be more receptive to investor-agents. There are flat-fee firms, where you pay one flat fee per transaction — these brokerages typically lack some of the education opportunities available at other agencies.

Traditional, national-brand brokerage firms will typically have a large initial commission split. A split of 50-50 is not uncommon, translating into 50% of your commission going to your employing broker until you hit a certain level of sales. As your sales increase, your commission split decreases, with top agents paying as low as 5% to 10% of their commission to their employing broker. The benefit of working for a large brokerage firm is name recognition.

Once you decide what type of real estate you want to practice, ask your instructor for recommendations that fit your goals. An established educator has taught thousands of students how to become a real estate agent, has a good grasp of what is going on in your local area, and can recommend a few different brokerage firms to interview.

Another thing to remember while searching for a broker is that you are the one doing the interviewing, not the other way around. Talk to the broker, and ask as many questions as possible in your initial interview. You should ask about:

• Continuing education.
• Errors and omissions (E&O) insurance.
• Commission splits.
• Payment terms and timelines.
• Mentoring.
• Daily schedules.
• Floor hours.
• Desk assignments.
• What the brokerage provides vs. what you are responsible for.

Step 3: Pass the exam

After finishing your coursework, you take two exams — one state-specific and one national exam — to prove your knowledge. Most states allow up to a year to take the test after completing school.

The test questions are designed to examine how well you absorbed the information. They are worded with twists and turns and must be read very carefully. Some questions look for the best answer; they have more than one answer that could be technically right.

In Colorado, the latest statistics show a 62% pass rate. So study, study, study. Take practice tests multiple times after finishing and passing your coursework. You’ll be surprised by how closely the practice test follows the actual exam.

What happens on exam day

At the exam facility, you are not allowed to bring anything with you other than a government-issued ID and proof that you have taken and passed the required coursework. No purses, no phones, no calculators, nothing. Check with your testing facility to make sure you bring only what you need — many don’t offer a place for you to store your things.

Aim to arrive at least 15 minutes before the start of your exam and allow plenty of time to get there. Some exam centers have a zero-tolerance late policy. If you are late, you forfeit your exam fees and are denied admittance. If you don’t bring the proper paperwork with you, same thing. 

Step 4: Get a background check

This may sound repetitious,, but each state has its own rules for getting a license, and most require a background check. Colorado offers two different ways to collect fingerprints and submit them. Go to a participating police station and get fingerprinted using ink and paper — just like a real criminal! Or, go to the testing facility and be fingerprinted electronically.  

There’s a good reason for going through a background check. Agents are trusted with the keys to a home and all the possessions inside. The real estate commission wants to make sure you are a trustworthy individual. If you have been convicted of a felony or pled no contest to a felony, misdemeanor, or petty theft, your chances of getting a license are significantly diminished.

Recent felony convictions for things related to showing houses, such as theft or embezzlement, are automatic disqualifiers. Felony convictions not related to selling homes and fiduciary responsibility may be allowed, but you must petition the real estate commission for approval. It’s best to do this before you take the course and discover your past indiscretions make you ineligible. Be sure to learn the restrictions in your area.

Step 5: Submit your application

Once you have passed your real estate exam, you must submit the application for your license. Your application will require proof that you passed your coursework and your tests. Depending on the state, it will require you to answer various questions and possibly need a signature from your employing broker along with proof of E&O insurance. Don’t forget the application fee.

If the real estate commission has waived any past felony convictions, those waivers should also be submitted with your application.

Remember that background check you sent fingerprints in for? It will be submitted to the real estate commission once it’s completed, which may happen before you finish your coursework and submit your application. Don’t worry: The commission stores each portion of the application until all parts have been received. Then, they’ll match them together and review the entire application. It could take  a week or two once all sections have been matched up.

Again, the process may differ in your area, so be sure to research the specifics.

When your application is approved, the real estate commission should notify your employing broker, who should then inform you. You’ll receive your official license in the mail, but they may email you your license number right away so you can get started with the setup.

If you don’t choose an employing broker, your license becomes approved but inactive until you have an employing broker.

Step 6: Become a Realtor (…if you want)

Learning how to become a Realtor and how to become a real estate agent: It’s all the same thing, right? Nope. It’s kind of like Kleenex or Band-Aids. Those are both name-brand items that are so well-known, the name is also the thing. People routinely ask for a “Band-Aid” when they mean “bandage.” “Tissue” and “Kleenex” are interchanged all the time.

When this happens, the trademark has become generalized. No big deal, right? Nope, it can be a huge deal.

When a company trademarks a name and then does not vigorously defend the trademark, it becomes watered down, and they can lose their trademark status and all the legal protections that go along with it.

A Realtor is not the same thing as a real estate agent. Every Realtor is a real estate agent, but not every agent is a Realtor. The word REALTOR® is a federally registered collective membership mark that identifies a real estate professional who is a member of the National Association of Realtors and subscribes to its strict Code of Ethics. Only members of NAR can call themselves Realtors.

So how to become a Realtor? It goes beyond becoming a real estate agent. To become a Realtor, you must join the association and pay dues to your local, state, and national organizations. In addition, there is a four-hour ethics class that must be completed and upheld. Agents who are not members of NAR are not held to these ethics.

How To Be a GREAT Real Estate Agent

When I first started thinking about becoming a real estate agent, I didn’t understand what could make a real estate agent great, not just passable. That’s probably because I found some of the worst real estate agents on the planet to work with.

After paying cash for a home, I contacted my buyer’s agent and asked her to let me know if she found any similar properties. Her response? “Well, I can sign you up to get emails.” Gee, don’t strain yourself. I’ll go find an agent who likes it when their client pays cash and comes back multiple times.

There are a lot of little things—and some pretty big things—that great agents do behind the scenes.

The best real estate agents hustle

Agents should always be searching for more clients. Good ones are clever marketing geniuses, always on the lookout for new business leads and opportunities. They understand how to use marketing materials, from your basic business cards to more high-tech social media posts and ad campaigns.

When planning your strategy, think about your local market. Is there a face you see all the time? On billboards, shopping carts, yard signs, website ads, and newspapers? That agent spends a significant amount of money on advertising. That agent also has a significant client base.

The best real estate agents are knowledgeable

Look for experts in your local market. They can recommend the best title companies and home inspectors and always know a great lender, lawyer, or other professional you may need during the buying or selling process.

This isn’t the type of knowledge you get out of a book — it comes from experience. For example, I know a newer agent in my area who has lived here his whole life. He knows this area. He knows the good towns and the good parts of those towns. Yes, he’s only been an agent for a short time, but his knowledge of the area puts him leaps and bounds ahead of other agents, even if they’ve held their licenses longer.

The best real estate agents do this full-time

You have to be able to show a property to your clients when it fits their schedule. If they’re only available after work and on weekends, guess when you work? If they’re here for a whirlwind house-hunting trip, guess what you’re doing for the next 24, 36, or 48 hours?

It’s difficult to do this while working a full-time nine-to-five job. I have a super-lenient boss who understands real estate transactions and is willing to work with me when I have a closing, showing, or an inspection, but I hate when real estate agenting and my day job overlap. I also don’t have many clients, and those that I do have are friends who know this isn’t my full-time gig. 

Successful real estate agents can’t work part-time. Unfortunately, when you’re first starting, agenting is a catch-22. You only make money when you sell a property, so you need to keep your day job until you can support yourself with your real estate earnings. But you need to be available at the drop of a hat — especially in a hot market where properties go under contract instantly — to show houses to your clients.

Notice I said a successful real estate agent is full-time. You can certainly do this part-time, but to truly be successful, you have to be available all the time.

The best real estate agents treat this like a business

Thinking about becoming a real estate agent? Better have an entrepreneurial spirit.

There are very few salaried opportunities for real estate agents. The traditional arrangement is that you work under a more experienced broker, and you actually pay them when you sell a property. The amount you pay them varies, and typically decreases as you sell more and more.

You have to be your own business. While you may get a referral here and there, the crux of your income will be a steady stream of new business, especially if you are working with retail clients.

How does that happen? Advertising, networking, more advertising, and more networking. The best agents are aggressive — they have to be — because there is so much competition.

How To Find Clients

Finding a client takes work. Everyone already knows an agent or 12. Clients don’t bust down your door — why would they? They’re inundated with flyers, mailers, magnets, and postcards advertising people who do exactly what you do. You have to make yourself memorable. What can you offer that another agent can’t? Why should someone hire you over them?

Your marketing budget can make or break you. In the beginning, your success literally depends on it.

One of the top tips is also one of the simplest. Get a name tag proclaiming your real estate agent status and wear it everywhere. People won’t know what you do until you tell them.

Treat your listings like marketing tools, too. Your “For Sale” sign that you plant in the yard is an advertisement. And an open house is one of the best ways to put your face in front of potential buyers, many of whom are not currently working with a real estate agent. When they walk in your door, be prepared to wow them with your expertise.

There are all manner of clever marketing ideas online. One agent passes out water bottles printed with her name and information at the gym. Another one hands out 9-volt batteries, along with a note for recipients to change their smoke detector batteries around the time the clocks go back.

Whatever smart strategy you choose, make marketing the centerpiece of your real estate agent business. After all, none of the other steps matter if you can’t close the deal.