If you are interested in a real estate career, let me answer a few quick questions that I had personally when I was thinking about it.
How flexible is it, really?
A lot of people talk about real estate as being flexible, but we all have our doubts when we see our agents and how much they are doing. Your real estate business is completely controlled by YOU. I actually considered doing real estate in my 20s, but my realtor told me that it takes a few years to make any money. So I didn’t think it was an option for me. But he didn’t tell me that real estate is flexible…you can even start part-time. Some people even hold a license just to do transactions for their own investment homes. If you are interested, you should jump in at whatever level you can manage, and work up to what you want your career to be!
How does the money work?
First, a percentage of the sale price is charged to the seller for a commission. The seller pays this to their listing agent at closing. The listing agent then “splits” the commission with the buyer’s agent. So, if you buy or sell a home, each transaction will bring in 3% for example (for this example, listing agent keeps half of the 6% charged to the seller, and gives the other half to the buyer’s agent). The 3% actually gets paid to your managing broker though, and then the broker will split that with the agent at a percentage. That is an important talking point when you are deciding a brokerage. You want to know what that split is. You may be enticed by a split that is higher for you, but the brokerage may be charging you monthly admin fees, or they may not be offering training and support that helps you succeed.
How much money will I make?
Let’s just say, for example that 2% of every transaction ends up in your pocket. If you sell a $200,000 home, that is $4,000 to you. If you sold one $200,000 home per month, you make $48,000 for the year. You do the math! One transaction per month is part-time, so the potential is there for a solid income.
How do I get “hired” on at a brokerage, or how do I choose?
You do HAVE to affiliate with a brokerage. It is the law that you have to be under a managing agent for at least the first few years of working. But “hiring” is not so much like you think…like with other jobs. The appointment is more about you finding the best fit. The brokerages are usually trying to “sell you” into picking them. Because you are an independent contractor, it is not an employer/employee relationship. But it is very important what brokerage you join, especially in the beginning, because training and support is the key to your success!
What is the process?
The first thing you do is take a Pre-Licensing Class. In Indiana, this class is a required 90 hours of class time. After completion, you go to a testing center and take the licensing test. When you pass the test, you take your results to the Indiana Professional Licensing Agency and apply and pay for your license. When you have your license, you should then start setting up appointments with the brokerages you are interested in affiliating with. You will also make application to MIBOR for membership.
Should you choose Keller Williams?
I love Keller Williams and believe in the company values and structure of the business. The reason I wrote this post here on my blog is so that I could talk to you if you are interested in KW. If you are, I would be happy to schedule a call with you to answer your questions. Just fill out this form and we can set up a time!