Real Estate Agent Business: How to Become a Real Estate Agent

Estate Agency is similar in many countries however some states have certain rules and regulations guiding the practice. In other areas there are no laws guiding real estate agency business.

 In advanced countries a real estate agent needs to have some level of qualifications. The agent has to pass state and national examinations to acquire adequate education and knowledge.  

An estate agent in such climes is expected to join a registered broker. Some African countries have no such laws and anybody interested in becoming a real estate agent virtually starts over night.

Such agents become apprentices or work from a brokerage office. This problem contributes to different players calling themselves agents.

Professionals like bankers, lawyers, property managers, estate developers and private individual all work as real estate agents. In this publication we will focus more on internationally accepted standards to becoming a real estate agent.
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Licensing and Courses

In advanced countries you need to get through some courses to get a licensed real estate agent. Although state requirements are very different in each region they have similar provisions.

 Some have specific requirements while others are sketchy.  You go through several courses, college level courses, or courses related to real estate, property management and business.

Real estate Brokers looking to absorb estate agents accept specific skills and educational qualifications. A good university degree in related field is some of the accepted qualifications.

 Contact your state real estate commission or local government for state laws guiding the practice. If you know any estate agents in your area you can find out about some of the requirements.

Estate agents in most countries have associations.  Although joining one isn’t mandatory it offers lots of advantages such as insider knowledge and networking.

Choose a Brokerage Firm

In advanced countries an estate agent needs to operate under an established real estate brokerage firm. A real estate brokerage firm is through which estate agent learns the trade.

 To practice in such countries the agent is required by law to work from an established brokerage firm.  The agent contacts a brokerage firm that has several years operating in the real estate sector.

Their experience and recommendations is crucial to the development of the estate agent. They provide valuable data on commission taking, property and other field related training.

The estate agent needs to find a brokerage firm with a good reputation for more training and development. Realtor are also required by to join any national association of realtors in your country.

Some real estate brokerage firms require additional coursework from these agents. Other things to consider when choosing a firm are their lead development style, firms experience and average commission earning period.

Do they have a powerful client’s base and marketing platform theses are questions you need to address before joining a brokerage firm. Another method you can use to gain experience through a mentor-ship arrangement.

In less developed countries once the individual has worked as am assistant to an agent he launches his own business.  This causes a proliferation of different people becoming agents without any training or knowledge.  However becoming an apprentice is the usual method used in such countries.

Unlike estate agents in developed countries who work under a registered broke. The other group opens an office puts up signs and start practicing.

The problem with this unregulated arrangement is that estate agents in such countries have a bad reputation. They are tagged fraudster and do many bad deals. Only a very few minority have managed to distinguish themselves.

Licensing

You need to pass national examinations and courses to become an agent in countries like America, Canada, and United Kingdom. Estate agency business is about building trust and reliability.

Estate brokerage firms check criminal background of agents before accepting the individual.

Develop a Business Plan and Budget

Starting an estate agency in many African countries is easy. All you need is passion for the business and an office. Many agents in Africa are one man businesses with only a secretary to receive potential client’s calls.

Other financial involvement is advertisement costs and association fees. Other cost considerations are government or local licensing, billboards and lots of complementary cards.

The major way such agents work is through networking with other agents and brokers in the area.  Apart from opening an office agents in advanced country accommodate all of the above costs including examination fees.

Estate agents earn income strictly from commissions.  So to earn money they need to find and close deals quickly. This is the major challenge in real estate agency business.

Learn How to Calculate Commissions

You need to develop a guide towards buyer /seller contracts and splitting commission. A common practice in commission taking is the agent collects commission directly from his client. Agents also do lots of commission splitting between agents.

Conclusion

To start as a real estate agent you need education, a business plan and budget. Although estate agents work under brokerage firms they are more like independent contractors.

They need proper marketing and branding to reach clients. The agent can use a spread sheet to analyze marketing costs and expected commissions.

Unless you bag huge commissions you need a backup income source. To succeed learn the trade under a mentor or apprentice program. Build a good website and use online resources to market your business.
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