Real Estate license, how to get one?

scottmandue · 06-20-2011, 12:10 PM

Just curious... I know the market sucks and silly to think of getting one now.

However a lot a people I know have a day job and a real estate license too.

One of them gave me a CD years ago with "the test" on it to study... can't find the CD.

So, what does it take and/or cost to get a real estate license (In Calif.)?

911Freak · 12:44 PM

Department of Real Estate Home Page

Start here:
Examinees/New License Applicants

You will need a broker to sponsor you or you can get licensed as NBA No Broker affiliation.

In CA, first you'll need PE (pre license education) I used United R/E license services and it was quick and easy.

Then a background and DOJ check, fingerprint file etc.

Pay a bunch of fees,

Once your PE is complete and you've submitted to DRE your fingerprint and DOJ application forms you'll schedule a test (do this 90 days out as the wait times are long)

If you have any specific questions PM me.

Test was piece of cake

Edit: all in $800 +/- (PE course @ United was 200, DRE fees 400, misc DOJ check etc 75)

scottmandue · 06-20-2011, 01:24 PM

Thanks!

Jim Bremner · 11-09-2012, 09:42 AM

Thinking about this as well.

How many months of working does it take to start earning a living?

ZAMIRZ · ZAMIRZ's Garage

^If only it were that simple.

Jim Bremner · 11-09-2012, 10:19 AM

Quote:

Originally Posted by ZAMIRZ

^If only it were that simple.

yeah, some can some can't I manage 20 salesreps and I see it. I've hired "A" list reps that have failed and "C" list reps that have been my best sales people.

WIL84911 · WIL84911's Garage

I hope you can devote the time outside of your day job as that is what you will need. I got licensed a month ago but because I'm so busy with family of 3 kids it's become more than a challenge. Here in NY/NJ it's a 75 hour class then school & state (as long as sponsored by a broker) exam. Good luck!

notfarnow · 11-09-2012, 05:23 PM

Quote:

Originally Posted by Jim Bremner

Thinking about this as well.

How many months of working does it take to start earning a living?

How long's a piece of string?

I got licensed it april 2009. I got my first listing & sold it within 2 weeks of starting, and within a couple montsh was doing around 2 "ends" (a house bought or sold) per month. I worked like an animal to get rolling though... I was doing around 80hrs/wk, and that was with a newborn baby, so getting up every 3 hrs for feedings. It was insane. I would door-knock 150-250 homes a week to get listings... if you do it right it works. My first 2 years were built on that.

I have a more sane schedule now, 60 hrs/wk in peak periods (spring/fall) and maybe 30-40 in summer-winter. I have a full-time admin which has made all the difference. I'm doing about 5 "ends" per month now, and really enjoying myself now.

It's a great business, but it is all consuming. In some aspects it's like the restaurant business. Everyone has a romantic notion about what it would be like... it seems so fun. Looks great on TV and in the movies... but it's an absolute LIFESTYLE business, and to build a business you have to sacrifice A LOT to make it work... and it's not easy, and it's not romantic, and frankly it doesn't pay enough to justify the effort. SO, the other consideration is that you need to be supported by your spouse, because if they're not onboard 100%, then they will have LOTS of good reasons for telling you to drop out.

HOWEVER, if you can fight your way up into the top 20% of the producers, past subsitence real estate where you are living deal to deal, it is GLORIOUS. I absolutely LOVE it.

Jandrews · 11-09-2012, 06:36 PM

Good info notfarnow. Can you give us a little idea of what an "end" pays, without revealing too much about your personal situation? Is an end the 3% portion of a full 6% listing charge? 5 of those a month would be REAL money, no? Just trying to get an idea of how a realtor really gets paid, and what expenses do to that pay.

Thanks,

JA

notfarnow · 07:57 PM

Quote:

Originally Posted by Jandrews

Good info notfarnow. Can you give us a little idea of what an "end" pays, without revealing too much about your personal situation? Is an end the 3% portion of a full 6% listing charge? 5 of those a month would be REAL money, no? Just trying to get an idea of how a realtor really gets paid, and what expenses do to that pay.

Thanks,

JA

An "end" would be one half of a deal... either the buying or selling side. So, if I "double-end" a deal, I count that as two ends. So, 2 homes where I had the buyer & seller would give me 4 ends.

Commission varies. As the market has receded, there has been a lot of downward pressure on commission. Last year my average "end" gave 2.65%. Focusing on LISTINGS has put me more in control of my commission (and my time) so this year, I'm pushing up around 2.8% average.

In terms of expenses, it varies a fair bit. When I started, I figured that I needed the 2 "ends" per month to pay my bills and stay afloat. After my expenses were paid, my pre-tax paycheck was usually about 50-60% of the gross commission.

Expenses include (keep in mind these vary tremendously)
- "Split" with brokerage: usually 25-40% at the "entry level" while you are getting started
- advertising
- signs (I pay $40 to have signs put up)
- real estate board fees

SO, if you wanted to figure what you NEED to make:

Take the AVERAGE price of a home in your community:
180k locally

Multiply by the average commission:
180k @ 2.65% = $4770

substract your fees and expenses, figure 50% to be safe, to figure your AVERAGE NET INCOME PER END
$4770 x 50% = $2385

Take the pre-tax slary you want to achieve or replace, and devide by you avarage net income per end

$50,000 / $2385 = 20.96 homes you have to sell per year.

The "split" with the broker is something you always watch. When you are starting out, an agent usually wants to be on a low split where the broker is paying more of the out of pocket expenses.

As you sell more, you raise your split, but cover more of your own expenses, and usually end up paying a desk (flat) fee. I am on a high split, but I pay everything right down to my photocopies PLUS a pretty high desk fee. At 5 deals per month, after I pay my expenses I'm doing around 65-70% pre-tax. The first 3 deals or so get eaten up by expenses, the 4th one is decent and the 5th is sometimes a bit nutty.

The more listings you have, the more you are in control of your time. Excluding time at open houses, the average listing will take 5-8 hrs of my time. The average buyer takes 15-20. It takes a $hitload of work to build a reputation (and a business) as a listing agent, but once you do, you have a LOT more control over your time and income.

A strong, diverse inventory of listings will also let you cherry-pick the buyers you WANT to deal with. I qualify buyers based on how motivated they are, but also whether they are looking at homes I enjoy showing (older homes, or waterfront are fun for me), but I also like to grab buyers who just seem like fun. Then I don't care if they take a while to settle on a house... if we spend a few weeks, or even months shopping, I'm enjoying myself and it's all cool.

I try to watch the numbers pretty carefully, and chart out goals based on where I want my business to go. It's a bit of a rodeo, but once you get a feel for it you can really have a lot of fun & success. It really is a lifestyle career though, there is no such thing as "free time", ever again.

Jim Bremner · 11-09-2012, 10:18 PM

My average house in my town runs $450k some condos down to $150k and top of the hill estates are 2.5mil

The agent that helped me buy sell my place earned commission on a sell of 680k and a buy of 695k the 680 was in November and the 695 was in December. She closed 5 in December all above 500k

I've sold 40mil worth of bicyccle parts in 30 years time. I don't see too many 50 year old or older sales reps. I think that it's time to give up the toy business.

notfarnow · 06:10 AM

Quote:

Originally Posted by Jim Bremner

My average house in my town runs $450k some condos down to $150k and top of the hill estates are 2.5mil

The agent that helped me buy sell my place earned commission on a sell of 680k and a buy of 695k the 680 was in November and the 695 was in December. She closed 5 in December all above 500k

I've sold 40mil worth of bicyccle parts in 30 years time. I don't see too many 50 year old or older sales reps. I think that it's time to give up the toy business.

Try to get some stats from the local RE board, to see what the average is selling for. It's too easy notice sales in your neighborhood, your price range.

Starting out, you really shouldn't depend on doing business in the middle/upper-middle class range. Do NOT depend on selling homes in YOUR neighborhood, or even among YOUR friends & acquaintances. They will be supportive, but may not feel comfortable trusting you with their most valuable asset. That's OK.

You want to focus on homes that sell quickly, and homes where the buyers and sellers may not yet have established relationships with real estate agents. Starter homes. Townhouses, 25+ year old 3 bedroom bungalows, entry level stuff that sells in 2-3 months. They are also the homes that will get you BUYERS that are less likely to already have a realtor. A well-priced starter home could get you 2-3 really good buyers. You just have to make sure you are giving the buyers 2-3 good reasons to work with you to buy a home. If you do that, they will ASK you if you will help them.

As you build up a listing inventory, and people start noticing that you are actually selling homes, then your friends & family will start recommending you. That's when you can start to work your way upmarket.