Real estate agents are independent contractors. That means there’s nobody cutting them a paycheck and it’s up to them to earn money for themselves. They typically earn a commission-based income, meaning that the more they sell, the more they earn.
It’s the kind of system that gives you unlimited earning potential, but you have to work for every penny of it. When you’re just starting out as a real estate agent, the prospect of working for yourself can be an intimidating one.
That’s why you need a roadmap to start earning money as a real estate agent.
#1: Understand Your Commission
Before you can earn money as a real estate agent, you need to understand how you earn it. Finding out that the commission on a house is 5% can sound like a lot of money. That’s $20,000 for a $400,000 home, the average price of a new house in the United States! But you’re not the only one involved.
Here’s how real estate license school RealEstateU explains your commission breakdown:
- The commission is first split between the buyer’s broker and the seller’s broker. On that $400,000 house, your broker gets $10,000.
- Your broker then splits the commission with you, according to your agreement. With a 60/40 split in your favor, you then get $6,000.
For a single deal, that’s pretty good.
#2: Generate Leads
Before you start getting checks like that, you need clients. Generating leads requires a multi-faceted approach that involves online marketing, face-to-face networking, and if you have the budget, maybe print advertising as well.
Start by building a professional website and leveraging social media. You can check out these unexpected ways to generate leads in real estate as well.
#3: Convert Leads into Clients
Once you have a lead, it might take time before they call you about buying or selling property. People take time to make these decisions. Keep your name on their mind through a monthly e-newsletter, a website blog, or a video series. Always give them valuable information in exchange for their time and they’ll stay subscribed to your marketing efforts.
#4: Know the Properties Inside & Out
Now that you’ve signed the client, it’s time to close a deal. You need to know everything about the property your clients are selling or the ones they’re interested in buying. It’s time to become an expert on the house, and hopefully you’re already an expert on the neighborhood. Your clients lean on you for expertise. Make them happy by knowing the answers to all their questions.
This is your roadmap to making money as a real estate agent. If you don’t have a license yet, check out these tips on how to earn your real estate license online and start your career change. You can sign up for affordable online real estate license courses in your state to get started. When you’ve completed the coursework, you can register to take the state exam.
With the right real estate license school, the process should be simple and straightforward. You can start working as a real estate agent in a matter of months, or even weeks. Then, it’s up to you to start generating leads and building your business.