This is the time of year when i get a lot of email about becoming a real estate agent and the first step in that process is getting a license. To some folks the cost of classes and getting a license is a big enough obstacle to keep them out of the business even though in most cases they will spend less than $1000.
Most real estate agents are independent contractors who work on a 100% commission basis which isn’t anything like being an employee or working for XYZ real estate company. Not only do we need to sell something in order to get paid we only get paid after a successful closing.
In my experience the people who fail as real estate agents are those who come into the business with little or no money. It costs money just to be a real estate agent weather we sell any real estate or not. Not a lot of money but enough to pay monthly real estate bills in addition to monthly living expenses.
There are always plenty of licensed real estate agents in the metro area, in fact there are too many. Most have a “passion” and they love houses and people but that alone doesn’t seem to be enough to keep the money rolling in or set an agent apart from the fierce competition in the market place.
Here are the basic steps to getting a license.
Being licensed is a State of Minnesota requirement for people who sell real estate for others for a fee. Persons wishing to buy or sell their own real estate do not need a license. Real estate is local and regulated at the state level. Persons interested in licensing in other states should check with their own state department of commerce for information.
The rules and requirements can be found on the Minnesota Department of Commerce web site because they regulate the real estate industry but reading it is kind of like getting information from an IRS web site.
The first step in getting a real real estate license is to take a 30 hour class in preparation for the real estate exam and then take the exam. After the exam there are two more courses each is 30 hours long. There are 90 hours of required training, split into three 30 hour courses known as course 1, 2 and 3. They can be taken in a class room or online and prices vary. I went to the local real estate school to take mine. Currently they charge $259 for each course. As an alternative there is also MN Realty School.
It is now possible to take all of the pre-license classes online which is a wonderful alternative for some. They will cost about $199 per class. See ContinuingEdExpress.com.
It costs $75 to register for the licensing exam and $135 for the license once the courses have been completed. Agents have to join a brokerage to get the license and to start selling real estate. After attending the classes most agents will not be able to fill out a basic purchase or listing agreement but will generally charge as much as a seasoned pro.
Getting a real estate license does not make a person a Realtor®. Realtors belong to the National Association of Realtors. Most local brokerages require that their agents belong to NAR.
Amazingly this article will get a lot of traffic, comments and questions from people who are looking for general information. I am always happy to help. . . .which is why I publish this or something similar to it every year.
Some new agents keep their daytime job as they start up and those agents also have a high failure rate. Being a real estate agent is expensive and it is a full time job. I sometimes suggest working as an real estate agent full-time and having a part time job on the side.
Also see The Future of Real Estate Agents