Are you considering a career in real estate? If so, are you wondering if it is the right choice for you?
Data from the Bureau of Labor Statistics shows the job outlook in this field to grow slower than average, but overall have a rate of pay above the national median. As a result, you might find more competition for jobs in this space, especially since most real estate professionals tend to be self-employed, creating lower barriers to entry than for other fields.
On the other hand, a countervailing factor might be limitations like licensing and state-level requirements. Despite these challenges, the appealing hours, pay and flexibility of the field might make it attractive enough to make it worth the effort.
This article will cover all of the considerations you need to make when deciding whether or not to go into real estate as well as some alternatives that may interest you instead!
What is a Real Estate Professional?
A real estate professional consists of individuals like real estate brokers and agents, investors, landlords, developers and more.
These people all work to scope, build, buy, sell and rent properties in the residential, commercial and industrial real estate spaces.
In this field, your role is to work with a client and help them find their ideal property or one that adequately meets their needs.
Nowadays, the real estate industry has become so large, it divides into many different types of roles:
- Real Estate Broker – licensed professionals who are able to negotiate deals between buyers and sellers on both sides of the transaction.
- Real Estate Agent – licensed professionals who are able to represent buyers or sellers during a real estate transaction by helping them find and purchase/sell property.
- Property Manager – oversees all aspects of renting, leasing and managing residential properties for their clients.
- Real Estate Appraiser – is someone who assesses the value of real estate to help clients determine a fair price for a property.
- Mortgage Broker – helps people find loans to purchase real estate while working with lenders in order to make financing more accessible and affordable.
- Property Inspectors – are experts who are able to ensure buyers are getting what they pay for when inspecting homes, condos or other properties.
Real Estate Broker vs Real Estate Agent vs Property Manager
These roles don’t carry skin in the game as an investor or developer would. Instead, these focus on transactions or maintaining a property on behalf of a property owner.
If you’d like to avoid the major capital commitment, financing and other ownership-related concerns in the real estate sector, but you’d still like to be involved, a big decision you are going to have to make early on in this career path is whether or not you are interested in being a broker, agent or property manager.
Real Estate Brokers
Real estate brokers are licensed professionals who are able to negotiate deals between buyers and sellers on both sides of the transaction and work for themselves.
They are allowed to do this because they have experience, knowledge and skill as it pertains to real estate laws in their state which is demonstrated by passing a test after completing courses at a school accredited by the National Association of Realtors.
Real estate brokers must be licensed to work in each state they operate and pass requisite background checks. These are regulated on the state level. Each additional state requires a new license or a reciprocity agreement between states.
Real Estate Agents
Real estate agents are also licensed professionals who are able to represent buyers or sellers during a real estate transaction by helping them find and purchase/sell property. Agents cannot work for themselves initially and must first work for licensed brokers by “hanging” their license in the office of a real estate broker.
They are allowed to do this because they have experience, knowledge and skill as it pertains to real estate laws in their state which is demonstrated by passing a licensing exam in their state.
Real estate agents receive a commission based on the sales price and have these figures negotiated with their client prior to commencing a property search. Typically, agents don’t get paid unless they can source and deliver purchase and sale transactions to completion.
Property Managers are people who oversee all aspects of renting, leasing and managing residential properties for their clients. They are not licensed or certified in any way, so they are able to work for property owners willing to hire them because of experience or willingness to hold the position.
Becoming a Real Estate Agent
In order to become a real estate agent, you will need to complete the following:
- Take an accredited pre-licensing course – many schools offer these courses which can be completed online or in person. Courses are usually taken from a local college and are designed to give you an overview of the real estate industry. This is also where students can be required by law to take classroom instruction on state laws as it pertains to real estate in your state.
- Get licensed – In order for a student to receive their license, they must complete pre-licensing education, pass a state licensing exam and complete any required continuing education.
- Get experience – most states require that you work as an agent for two years under the guidance of a licensed real estate broker. Further, most state will need to “hang” their license in the office of a real estate broker—someone responsible for managing or employing agents in an office. Depending on the state, after a certain period, some agents can begin to work for themselves and not for a broker.
After completing these steps, you are now able to represent buyers or sellers during a real estate transaction by helping them find and purchase/sell property.
The Roles and Responsibilities of a Real Estate Broker
A real estate broker is someone who:
- Works with clients to identify their needs and wants when it comes to buying or selling real estate.
- Understands the market conditions in their area which allows them to provide realistic expectations to their clients.
- Negotiates deals between buyers and sellers on both sides of the transaction.
- Oversees real estate transactions between buyers and sellers. Their duties can include drafting and negotiating contracts between parties in a transaction, leading a team of agents and more.
Is Real Estate a Good Career Choice?
Whether or not to pursue a career in this industry can be quite difficult. So many people are interested in real estate these days that there are more jobs available than ever before.
However, with this great opportunity also comes challenges like finding your niche and dealing with competition from other potential employees.
Real estate can be a highly lucrative career that can provide substantial income to those who are able to break into the industry. However, there are many challenges and obstacles involved in earning this type of high-income potential.
Consider the requirements for becoming a real estate professional and weigh this against your desire for success in the industry.