Is a Career in Real Estate Right for You? (2024)

Planning to start a new career or a side hustle to earn extra money? You might be thinking about real estate. Those who take the leap will join the nation's estimated three million active real estate licensees.

Compared to other careers with similar earnings potential, it's relatively easy to become a real estate agent or broker. There are lots of perks, too—like being your own boss, meeting new people, and helping people through one of life's biggest milestones. Still, building a successful real estate career is more work than many people imagine. Here's a closer look at the job to help you decide if a career as a real estate agent or broker is right for you.

Job Outlook for Real Estate Agents and Brokers

Real estate agents and brokers help clients buy, sell, and rent properties. According to the Bureau of Labor Statistics (BLS), the number of real estate agent and broker jobs is projected to increase by 3% between 2022 and 2032, which is slower than the average for all occupations.

Still, the BLS notes that "there will be a continued demand for real estate brokers and sales agents, because people turn to these workers when looking for a new home, relocating, or purchasing property for a business, among other reasons. Employment is projected to grow along with the real estate market."

Pros and Cons of Selling Real Estate

Some of the pros may be the very reasons someone chooses to go into selling real estate. You can often set your own hours and be your own boss. The potential to earn substantial commissions is also tempting, and for those who enjoy selling and meeting people, selling real estate can be an engaging way to spend your workday.

Earning a living selling real estate is hard work. You have to be organized in order to keep track of legal documents, meetings, and all the tasks that go into multiple listings. You may go without a paycheck for periods of time because the work is often commission-based. If you don’t sell, you don’t earn anything.

Real Estate Agent Job Duties

Of course, getting a license is the easy part. Becoming successful and making a sustainable income as a real estate agent or broker is hard work. In most cases, it requires a substantial commitment of time, effort, and even money.

Administrative Duties

For starters, being a sales agent or broker requires managing a heavy load of administrative tasks. Legal documents must be accurate and events must be coordinated for multiple listings. On any given day, you might have to:

• Complete, submit, and file real estate documents, agreements, and lease records
• Organize appointments, showings, open houses, and meetings
• Create and distribute flyers, newsletters, and other promotional materials
• Develop and maintain paper and electronic filing systems for records, correspondence, and other material
• Create monthly, quarterly, and annual budgets
• Develop marketing plans for listings
• Create and build on client databases
• Research active, pending, and sold listings and draft comparative market analysis (CMA) reports
• Respond to texts, emails, and phone calls
• Update websites and social media profiles

An established sales agent or broker might have the budget to hire an assistant to handle some or all of these administrative tasks. But if you're just getting started in the industry, you’ll probably have to take care of them yourself.

Consider whether you're detail-oriented and good at paperwork. Do you have the organizational skills and drive to handle these administrative duties on a regular basis? Are you able to juggle multiple tasks on a deadline?

Lead Generation

Finding clients is central to your success as a sales agent or broker. After all, without buyers and sellers, there would be no transactions and, therefore, no commissions. One common way to build contacts and generate leads is through a real estate sphere of influence (SOI) strategy, which focuses on generating leads through people you already know, including your:

• Family
• Friends
• Neighbors
• Classmates
• Business associates
• Other social contacts

That means your day might regularly include meeting and speaking with many people, handing out business cards, sharing contact details, and filing away contact information to build out your SOI. After you make first contact, you’ll need to follow up with phone calls, emails, snail mail, or text messages so the people you meet remember your name for the future.

Because most people buy, sell, or rent property at some point in their lives, everyone you meet may be a client someday. Are you comfortable selling yourself? Are you willing to drum up business with family, friends, neighbors, and other social contacts?

Working With Real Estate Clients

You'll spend part of each day working directly with clients, whether they're buyers, sellers, or renters. And keep in mind that it won’t always be during business hours. That means you may have to sacrifice some of your personal time—time you spend with family and friends. If something pops up at the last minute, it may mean canceling your existing plans.

A seller's agent represents the person selling the home and you'll spend time preparing listing presentations, taking digital photographs of properties, staging homes so they show well, marketing properties, and hosting open houses.

A buyer's agent represents the person buying a home and you may spend time combing through the Multiple Listing Service (MLS) to find suitable listings and sending them to potential buyers. You'll also show the property to interested buyers and accompany your clients to inspections, meetings with loan officers, closings, and other activities for which your presence is either required or requested.

Are you comfortable working with the public? Can you maintain enthusiasm and professionalism, even when you have a tricky or demanding client?

How to Become a Real Estate Agent

There's no national real estate license, so you'll have to meet your state's unique licensing requirements. Visit your state's real estate regulatory office website for information, or check out the regulatory agency directory from the Association of Real Estate License Law Officials (ARELLO).

These are the general steps to becoming a real estate agent:

1. Take a prelicensing course
2. Take (and pass) the licensing exam
3. Activate your real estate license
4. Join a real estate brokerage

Real estate agents always work under the umbrella of a licensed real estate broker. Eventually, you may want to become a broker yourself, in which case you'll need to meet additional educational and experience requirements. When you have acquired your broker license, you can work independently and hire sales agents to work for you.

In most cases, you can expect to spend about two to five months completing school and getting your real estate agent license. And you'll need some cash, too. Between the licensing course, application fee, fingerprint/background check, and exam, you might want to budget anywhere from $550 to $1400 to get started, depending on the state. Not to mention the startup expenses such as Multiple Listing Service fees, business cards, sale signs, open house signs, website, and other miscellaneous costs, which can add up fast.

When deciding if a career in real estate is right for you, be sure to consider whether you have the time and cash to get your license and cover your startup costs.

New Rules on Commissions

Real estate agents typically work on a commission basis. That means that rather than getting a steady, regular paycheck, they get paid each time they help a client buy or sell a property.

In 2023, the National Association of Realtors reached a settlement agreement in a lawsuit against the organization related to splitting commissions.

In the past, NAR members required that the buyers' agent commision was set when a home was listed for sale. This practice has been found to limit competition and drive fees upward by setting the buyer agent's fee before the buyer could determine the quality and quantity of services provided, making negotiating fees difficult. It could also result in agents directing clients to properties with higher commissions.

Under the settlement, buying agent commissions will no longer be set and advertised when the home is listed on MLS. Sellers can still offer compensation to buying agents, but otherwise, buying agents will need to negotiate with their clients to get compensated.

Many predict that this will reduce the size of real estate commissions. Some international markets with similar rules see typical commissions of 2% or less compared to the commission of 5% or 6% that has been common in the United States.

Real Estate Agent Earnings

In general real estate agent, commissions are paid only when you settle a transaction. Ultimately, this means that you could work hard for days, weeks, or even months without taking home any money at all. Like other commission-based jobs, it can be feast or famine.

Of course, when you do close a sale, you generally don’t keep the entire commission. That's because commissions may be shared with the other agents and brokers. For example, the commission might be split four ways:

• Listing agent: The agent who took the listing from a seller
• Listing broker: The broker the listing agent works for
• Buyer's agent: The agent who represents the buyer
• Buyer's agent's broker: The broker the buyer's agent works for

Here's an example. Say a sales agent takes a listing on a $200,000 house. The seller agrees to offer a 3% commision to their agent and 2% to the buying agent.

The house sells for the asking price. The listing agent's broker will get $6,000 and the buyer's agent broker will receive $4,000.

Next, the brokers split the commissions with their sales agents—say, 60% for the sales agent and 40% to the broker. So, the selling agent sales agent receives $3,600 ($6,000 X 0.6), and the buying agent gets $2,400 ($4,000 X 0.6). The selling broker keeps $2,400 and the buying broker keeps $1,600

• Listing agent—$3,600
• Listing broker—$2,400
• Buyer's agent—$2,400
• Buyer's agent broker—$1,600

Do you have the financial reserves to go weeks or months without a paycheck? Are you OK with an uncertain income? Though many real estate agents and brokers work part time, the most successful ones are available whenever their clients need them—whether that's during business hours, evenings, or weekends. Are you OK giving up your nights and weekends? Are you in a position to dedicate that much time to your career?

The Bottom Line

If you are comfortable with these realities—and you enjoy hard work, are a self-starter, and like the idea of making your own schedule—a career in real estate might be right for you. If you sell enough properties, you can earn a very comfortable living.

A career as a real estate agent or broker can be both challenging and financially rewarding. But keep in mind that there are many different unique opportunities for anyone who wants to work in the industry. You could be an agent, an appraiser, a professional, or an investor. You might decide to work strictly with residential properties, or perhaps you're more interested in commercial buildings. Whatever you choose, be sure you meet the job requirements and understand what you need to know to achieve success.