How to Become a Real Estate Agent: Step-by-Step Guide

So you want to be a real estate agent? Great career move. Becoming a real estate agent equips you with a skill for life, and for those at the top of their game, the rewards are significant—think gross earnings of over $500k per year (and more) for the top 5%. What’s even better? You can become a fully licensed real estate agent in as little as 4-6 months in the USA. But it’s not always that simple. There are challenges to overcome, and not everyone makes it to the highest pay grades. In this blog, we’ll cover the 7 steps to becoming a real estate agent and share an insider’s tip on how to become an elite agent. Let’s go!

The Benefits of Becoming a Real Estate Agent

There are three main benefits to becoming a real estate agent. As of March 2024, over 1.5 million professionals are members of the National Association of Realtors® (NAR), and that number grows even higher when you consider agents who aren’t NAR members. This means you’ll never feel like you’re going it alone—there’s a network of experienced professionals and resources to support you. The earning potential is another compelling reason to pursue this career. According to the NAR Member Profile Report, at least 1 in 5 realtors earn $150,000 or more annually, with some agents surpassing six figures and even grossing over $500k per year. For those who stay in the game, the rewards can be life-changing. Finally, getting into real estate is relatively easy compared to other careers with similar earning potential. While there’s an upfront investment of time and money, it’s significantly less than the cost of obtaining a college degree. With licensing programs that can be completed in months, real estate offers a quick and affordable path to a rewarding career.

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3 Challenges to Become a Real Estate Agent

1. Licensing Requirements

To work in real estate you need a license. But the licensing requirements vary widely by state, which can complicate things if you’re looking to move or practice in multiple areas. You might meet the criteria in one state but not in another. It’s important to research your state’s requirements—see below for how to find out.

2. The Costs of Becoming a Real Estate Agent

Getting started in real estate comes with upfront costs. Pre-licensing courses, licensing exams, and activating your license can quickly add up to thousands of dollars. On top of that, many brokerages require a monthly fee to join, ranging from $25 to $500, before you’ve even received a paycheck.

3. Starting out on a Good Salary

Breaking into the real estate world can be tough because many brokerages don’t offer a base salary to newcomers. Instead, you only earn commissions on the properties you sell. According to the NAR Member Profile Report, 62% of real estate agents with less than two years of experience earn under $10,000 annually. It gets better with time, but the first few years are often the hardest hurdle to overcome (and we’ll explain how to tackle this further down).

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7 Steps to Become a Real Estate Agent

Step 1: Research Your State’s Licensing Requirements

There’s no one national real estate license. Which means you’ll need to meet your state’s unique licensing requirements. The best place to start is by visiting your state’s real estate regulatory office website. You can find this information through the Association of Real Estate License Law Officials’ (ARELLO) regulatory agency directory. Each state has specific requirements, including:

• Minimum age and U.S. residency
• Education (such as a high school diploma or GED)
• Pre-licensing and post-licensing courses
• Licensing exams and eligibility criteria
• Application process, fees, and background checks
• Continuing education and advancement opportunities

Some states have reciprocal licensing agreements. This means you can transfer your license to another state without retaking an exam. For example, Illinois has reciprocity with states like Colorado, Florida, and Connecticut, while Texas does not offer reciprocity with any state.

Step 2: Complete Pre-Licensing Education

No matter where you live, completing a pre-licensing course is a mandatory step to becoming a real estate agent. These courses typically cost between $200 and $350. Real estate course requirements vary by state. For example:

• In California, applicants must take three real estate classes totaling 135 hours.
• In Virginia, the requirement is at least 60 hours of coursework.

Pre-licensing courses cover essential topics, including:

• Real estate principles: Terms like "lien," "escrow," and "encumbrance."
• Real estate practices: Skills such as determining a property’s value.
• Legal aspects: Rules and regulations governing real estate transactions.

You can find state-specific requirements and a list of accredited pre-licensing institutions on your state real estate commission’s website (see above). Courses can be taken in-person or online, and many online schools offer additional study resources to help you pass the licensing exam. In some states, like Florida, where the first-time pass rate is around 50%, these resources can make a difference in your preparation.

Step 3: Apply for (and Pass) the Real Estate Licensing Exam

Taking the real estate licensing exam is the next step in becoming an agent. The average cost of the exam is $100 to $300, and you’ll need to revisit your state real estate commission’s website for detailed instructions on how to register. The exam is computerized and divided into two parts:

• A national portion covering general real estate principles and practices.
• A state-specific section focusing on your state’s real estate laws.

Both sections are in multiple-choice format, with 60 to 100 questions per section, depending on your state. The exam may also include real estate math questions, like prorating property taxes, for which you’ll need a calculator. Each section is scored separately. You must pass both to obtain your license. If you fail one or both sections, you’ll have the opportunity to retake them, but fees are typically charged per attempt. In addition to exam fees, be prepared for other costs like a $300 licensing application fee and a $60 fingerprinting fee, depending on your state. Thorough preparation and knowing the exam format can help ensure success and minimize retake costs. Example of a multiple-choice real estate licensing exam question, from an online education provider.

Step 4: Activate Your Real Estate Agent License

After passing the licensing exam, the next step is to submit your application to your state’s real estate regulatory organization. Be sure to include all required documents and pay the associated fees, which range from $200 to $400. Once your application is approved, you’ll receive your real estate license certificate in the mail, and your name will be searchable in the licensee section of your state’s regulatory website. NOTE: You can’t legally work as a real estate agent until your license is issued. Additionally, you might want to pay for membership in your local Multiple Listing Service (MLS). MLS membership is essential for listing properties and accessing tools like tax information, market trends, and early access to new listings. This service is important for operating effectively as a licensed real estate agent and ensuring your success in the field.

Step 5: Find a Brokerage to Work With

As a new real estate agent, you’ll work under the supervision of a licensed broker. Real estate brokers are responsible for overseeing your transactions and ensuring you follow legal and ethical standards. Think of it as similar to how stockbrokers must work at a licensed firm to trade stocks: It’s a safeguard for both agents and clients. But here’s the catch. In most cases, you won’t earn an hourly salary. Instead, your earnings will come from a percentage of the commissions collected from your real estate transactions. Some larger organizations may offer a base salary with bonuses tied to the deals you close, but these roles typically require experience. Since commission-based pay structures cost brokerages nothing upfront, they are eager to welcome new agents. You’ll likely find several options for joining a brokerage. Top tip: Choose a brokerage that offers training or aligns with your goals. According to the National Association of Realtors (NAR), agents are compensated in various ways:

• 35% work under a fixed commission split.
• 20% earn through a graduated split (increasing with productivity).
• 20% operate under a capped split (reaching 100% after a predetermined threshold).

Step 6: Become a Realtor (Optional)

Not all real estate agents are Realtors. Only agents who are members of the National Association of Realtors (NAR) can use the title. Realtors must subscribe to the NAR’s strict Code of Ethics, with high standards of professionalism and integrity. The NAR is the largest trade association in the U.S., representing over 1.5 million members, including agents, brokers, property managers, appraisers, and other real estate professionals. Joining the NAR is optional and costs $156 annually (plus an assessment fee) but it comes with numerous advantages, such as:

• Becoming a Realtor can boost your credibility
• You get access to business tools and educational opportunities
• Detailed market data, research, and statistics
• Discount programs designed to support your business growth

Realtors also gain access to the Realtors Property Resource (RPR), the largest online real estate database in the U.S. The RPR includes information on zoning, permits, mortgage and lien data, schools, and foreclosures, giving you a significant edge in serving your clients. Number of National Association of Realtors members in the United States from 2009 to 2023. SOURCE

Step 7: Grow Your Earnings

Building a profitable career as a real estate agent takes time. Remember: 62% of realtors with less than two years of experience earn an average of $10,000 or less annually, according to the NAR. Sticking with it is crucial to overcoming the initial hurdles and moving into higher earning brackets. As you gain experience, consider undergoing additional training or sharpening your skills in key areas such as negotiation, lead generation, and closing deals. These skills can directly impact your success and commissions, giving you a competitive edge in the market. You might also want to specialize by pursuing real estate designations and certifications to stand out. Options include:

• Real Estate Broker: Manage a team of agents and oversee transactions.
• Appraiser: Verify the value of real estate properties.
• Property Manager: Maintain and oversee real estate investments.
• Real Estate Investor: Buy and sell properties for financial gain, similar to house flipping.
• Real Estate Attorney: Handle and examine transaction documents.
• Home Inspector: Assess property conditions before purchase.
• Mortgage Loan Officer: Originate property loans through financial institutions.
• Real Estate Photographer: Create high-quality images for listings.
• House Stager: Prepare properties to appeal to potential buyers.

The "Cheat Code" to Being a Top-Earning Real Estate Agent

The real cheat code to success in real estate? It’s this: Learning how to generate a steady stream of seller leads. As a real estate agent, you need both buyers and sellers to earn commissions. But seller leads are far more valuable than buyer leads. Why? Because sellers bring listings—and listings bring buyers. When you control the inventory, you’re in a stronger position to negotiate deals, attract multiple buyers, and increase your earning potential. But seller leads are also harder to find. That’s why agents who excel at generating leads are highly attractive to brokers. If you can consistently bring in seller leads, you’ll not only stand out but also fast-track your career with better pay and more job opportunities. Visit our catalog of high-performing real estate postcards here.

Using Direct Mail to Generate Seller Leads

At BallPoint Marketing, we specialize in crafting direct mail campaigns that grab attention and inspire action. Our handwritten mailers are designed using cutting-edge robotics and AI technology to mimic the look and feel of a personal handwritten letter. These mailers resonate with sellers, increasing the likelihood they’ll read and respond to your message. Agents using BallPoint Marketing’s direct mail solutions report a cost per deal that’s 2.3x cheaper than other methods. The Greeting Letter, our #1 choice for agents, is especially effective. These 5x7 cards, made with premium paper and personalized messaging, stand out in the pile of junk mail and create a lasting impression. Want to learn how to make direct mail work for your real estate business? Watch the video below from BallPoint Marketing co-founder and owner of an 8-figure real estate portfolio, Ryan Dossey, where he shares his insider tips for getting real estate leads with direct mail. Start using this cheat code today, and watch your commissions soar. [embed]https://youtu.be/OvtJCFx_7jw?si=NaJ3vQ_UxlNHiQhz[/embed]