Do you want to learn what it takes to become a successful property agent? If YES, here is a complete guide to becoming a real estate agent in USA, UK, Australia & Canada.
Real Estate agency is a line of business that many upwardly mobile, visionary and focused people are venturing into these days, as an alternative source of income – or in some cases their main source of income. The reason for this is not far-fetched; it is because investment in real estate has a high return on investment and investors can rest assured that their investments will not be lost, all things being equal.
Over the years, in countries like the USA, Canada and even Australia, the real estate sector of the economy has grown and the early comers into the business can testify of how lucrative it is investing in the real estate sector -whether as primary players or even as agents. A very good example is Donald Trump, considered as one of the richest men in America and indeed the world.
Before we go on to look at what real estate agency is and what it takes to become an agent, it pertinent that we establish here that there is a difference between being a real estate investor and an agent. A real estate investor is someone or an organisation that invests money in the provision of real estate facilities in the economy, while the real estate agent is the individual or organisation that acts as a middle man for both the investor and a would be end-user of real estate facilities.
Having established this difference, let us now look at some definite descriptions of real estate agent and the requirements for becoming one.
What is a Real Estate Agent?
We all hear about real estate agents, but do you really know who and what is expected of a real estate agent? This is a person or an organisation that is authorized to act as an agent for the sale of land or other real estate facilities.
The term originally referred to a person responsible for managing a landed estate, while those engaged in the buying and selling of homes were “House Agents”, and those selling land were “Land Agents”. However, in the 20th Century, “Estate Agent” started to be used as a generic term. Estate agent is roughly synonymous with the United States’ term Real Estate Broker.
In a broader sense, a real estate agent (or broker) is a person or company (as the case may be) who acts as an intermediary between sellers and buyers of real estate property and attempts to find sellers who wish to sell and buyers who wish to buy.
But according to investopedia.com, “Real estate agents are the people you deal with face to face when buying or selling property. These are the people on the front lines of the real estate market and perform such tasks (amongst others) as showing homes to prospective buyers and negotiating transactions on behalf of their client. Real estate agents often work on a 100% commission basis and their income is dependent upon their ability to find property suitable for their clients and closing transactions.”
Duties of a Real Estate Agent and their Job Description?
The duties basically include looking for and connecting sellers and buyers for real estate products. It could be landed property or building. Other duties are:
- Buying or selling for clients
- Study property listings
- Interview prospective clients
- Accompany clients to property site
- Discuss conditions of sale
- Draw up real estate contracts
Tools / Equipment Used By Real Estate Agents
There are several tools that a real estate agent must have at his beck and call if he wants to do well in the business. These tools are both psychological/emotional and also physical. The psychological tools include such ones as:
- Ability to talk and convince prospective clients
- A good investment in his/her wardrobe (appearance matters)
- A good understanding of real estate and real estate business and market and so on
But more importantly, physical tools will include such tools as a good office space, internet ready computers (and be sure to get back-up drives also to safe data, because computers can crash anytime.
In this regard, having a Carbonite.com account can help. Just have the app installed on your system and anytime you are online it automatically backs-up and updates your files and can be viewed from other systems anytime you log into your account. You might also want to visit other online resources for more information.
Printers, fax machines, land and mobile telephones, professional camera – still/video for taking high resolution pictures and video recording (although most of today’s phones can do that), very well designed business cards might be of immense benefit to you, when you research about these and more online.
There are quite a number of apps today that a realtor or real estate agent can also take advantage of to enhance performance and productivity that improves the bottom line of the agent. Some of these apps include, but not limited to the following:
- The Paperless Agent
- Open Home Pro
- Trulia & Zillow
- Google Apps for Business
- And many more
These Apps have their different benefits to the real estate agent’s business. Some of them are free, while you have to pay a token to get and use some others. If you are thinking of efficiency and effectiveness, you cannot play down on getting and using some, if not all of these Apps and other tools as mentioned here. The use of these tools is sure ways to stand you miles apart from your competitors who do not use them. Maybe because they don’t know that they exist.
Becoming a Real Estate Agent – A Complete Guide
The Labour Market Situation in the Real Estate Industry
- In the United States
There is a general knowledge that housing demand is on the increase in the United States, but this demand is not being compensated by price-rise. Industry watchers say this may be due in part to the numerous new buildings that are springing up and coming into the housing supply market and this helps to meet demand pressure, which in turn helps prises to stabilise and in some cases fall.
For example, the annual increase of 4.26% y-o-y in the first quarter of 2015 in the S&P/Case-Shiller seasonability-adjusted national home price index (4.34% in real terms) was the lowest since Q3 2012. There was a 4.39% price rise during the year to May 2015 (4.43% in real terms).
- In Canada
The prediction is that home prices will rise by 5 – 5.2 per cent in 2015 and by another 2 per cent in 2016 in spite of the fact that the economy is weakening. (Reuters poll). The slump in oil prices has been said to be responsible for the shrinking economy in Canada, but house prices have defied the odds, which leaves real estate agents with a good chance of still making good profits from their businesses.
Mark Hopkins, a senior economist at Moody’s Analytics calling the Canadian housing market “bulletproof” said, “It seems to not only be defying the odds in terms of surviving the large downturn in the global economy, but even now with gross domestic product contracting, it seems as though existing home prices have accelerated, which is a bit strange and counterintuitive.”
What this suggests is that the future looks really bright for those in the real estate and agency businesses.
- In the United Kingdom
It seems the situation is not different as the housing sector is also looking up in spite of challenges in various other sectors of the economy (But this does not include London, because prices are gradually dropping there. As they say, “London is falling, the rest of UK is rising.”).
Jim Mello, an entrepreneur and investor said, “London is definitely on its way down.” He continues, “You’re getting the Russians withdrawing, you’re getting a huge metal building, and I have read that there are 41,000 new units being built in London. All of which priced to £1million but last year only 3,000 properties were sold for more than a million pounds in London. So I would say it is way overbuilt, way overleveraged, and way overpriced.”
This picture does not reflect the situation in the rest of UK, as watchers have given pass mark to how well the housing sector is doing in the rest of the UK. And that should be some confidence booster to agents or would-be agents.
- What of Australia?
Is the situation good or bad there? In 2014, house prices rose by 6.8% in Australia’s eight major cities (3.34% inflation-adjusted), after a rise of 9.48% during 2013 (6.47% inflation-adjusted) (Based on figures from the Australian Bureau of Statistics). Sydney, which is undoubtedly Australia’s most popular city saw the biggest house price increase by 12.2% in 2014 followed by:
- Brisbane – 5.3%
- Melbourne – 4.5%
- Adelaide – 2.5%
- Hobart – 2.2%
- Canberra – 1.7%
- Perth – 1.2%.
Some industry critics believe that Australia’s houses are overvalued, especially in Sydney where median house price is put at about AUS 760,000 (US$ 591,962), about 33% above the national median house price of AUS 571,500 (US$ 448,313).
The above information has shown that there is still room for more would-be real estate agents to come into the sector. The need for them still exists and they can find their footings and practice profitably. But this is not without going through the necessary processes that are involved in setting up such business. That will be looked at later.
Effects of Internet Technology on the Real Estate Business
- Technology gives rise to new approaches that bring about new and fast results.
- It allows for seamless business operations
- It makes it easier to get more done within short period of time
- The use of technology gives room for multi-tasking. A person can be trained to handle the work for several people by just knowing how to use relevant apps.
- Internet/Information technology generally, especially now with the advent of social media platforms like Facebook, Twitter, LinkedIn and so on has made it easier to reach more prospective clients with minimal expenses on adverts.
And there are many other advantages of adopting technology into the real estate business at whatever level one chooses to play.
Professional/Regulatory Bodies for Real Estate Agents
- In the United States
For example, in the USA, to be qualified to practice as a real estate agent you must be a member of the National Association of Realtors (NAR founded in 1908 as the National Association of Real Estate Exchanges and in 1916 was named The National Association of Real Estate Boards, before adopting its current name in 1974).
There is also the National Association of Real Estate Brokers (NAREB). It is of pertinence to note that all the states in the USA also have various laws and regulatory requirements to practice as a real estate agent.
In US you can choose to earn undergraduate degrees related to real estate and finance, but the Bureaus of Labour Statistics (BLS) says High School diploma was the minimum requirement. There are however other institutes and professional bodies that offer courses and certification programs in real estate.
- In Canada
It is the Canadian Real Estate Association (CREA) that is the national body, though the different provinces have their own educational and licensing requirements to be licensed as a realtor. For example to be licensed in Canada, you are required to complete minimum educational level. Take supervised training, sometimes called “articling”. And must pass a written exam bore obtaining license to practice.
- In the U.K
The National Association of Real Estate Agents (NAEA) is the leading professional body for UK real estate agents. It requires a 3 Level Technical Award in Estate Agency, administered by National Federation of Property Professionals (NFoPP) Awarding Body. But there are other bodies that are involved with regulatory responsibilities like the National Federation of Property Professionals.
There is Independent Network of Estate Agents (INEA). There is also the Royal Institution of Chartered Surveyors (RICS), the principal body for UK property professionals and dealing with residential, commercial and agricultural property.
- In Australia
It seems the rules are more stringent for anyone who wants to become a real estate agent. A new agent is expected to complete a short course and other requirements set by the Real State Institute of Victoria (the REIV) that qualifies them to become an agent’s representative and then learn the ropes under such fully licensed agent.
And then the criteria to become a fully licensed agent are more extensive as outlined by the State Government. It covers courses such as Trust Accounting, Business Finance, Leasing, Auctions, and marketing practices. An intern agent must have been in such position for at least one year before going on to take the required exams for full licensing. There are other associations also.
Benefits of Becoming a Real Estate Agent
- It gives you multiple options to make money
- It helps you to save money on your investments
- It affords you opportunity to meet a wide range of people, thereby helping to build your network
- You can act as an agent to yourself, thereby saving money
- You can become the go-to-agent with/among other agents if you apply integrity with your work
Factors or Challenges Discouraging People from Becoming Real Estate Agents
- Government policies
- Over concentration of other practitioners in an area
- Troublesome clients
- In some places lack of funds to deal in business
- Pressure from colleagues to do certain things that are unlawful
- Too many policy making bodies
How Long Does It Take to Become a Real Estate Agent?
- In the United States
The different states also have their own laws and requirements that must be met to become an agent. Florida requires a 63 hour approved classes before you can take the exams, while in New York 75 hours of classes are required. California requires three 45 hour long courses before you can take the exams and in Colorado it is 300 hour of classes.
- In Canada
Apart from the exams you are required to write and other related degrees, you are also expected to serve at least a year intern term with an already licensed real estate agent.
- In Australia
Different requirements guiding the different parts of the country, Sydney, Melbourne, South Australia and so on. They have exams and certifications that you must take and obtain in order to qualify to practice. So within a year to a year and half (apart from taking degree courses), you may be ready to be fully licensed.
- In the U.K
The National Federation of Property Professionals is the Awarding body and has a basic Level 3 Technical Award in Sale of Residential Property, which is set as a minimum requirement to join NAEA as a full member and the Level 4 Certificate qualifies you to join NAEA as a Fellow. The Level 3 exams have to be completed within one year while the Level 4 exam has a stipulated time of 18 months for completion.
How Much Does It Cost to Obtain Real Estate Certification or Degree or the Equivalent Training?
In the USA there are different requirements depending of which state you reside or desire to practice. However, an agent only becomes a Realtor when he/she becomes a member of the National Association of Realtors and subscribes to its Code of Ethics.
Different colleges and other educational institutes offer courses in real estate and their prices range from $100 to as high as $5,000 depending on which course you are taking and which school. For example, the Los Angeles City College offers real estate education approved by the California Department of Real Estate for agents and brokers for about $600 for in-state residents.
One could also take advantage of correspondence or online real estate licensing courses which cost between $100 to $1,200 or more depending on state and the depth of study.
How Much Does it Costs to Take Courses in Real Estate Agency?
- In the UK
The Birmingham City University offers BSc course in Real Estate for a period of 3 years for Full-time students, 4 years for Sandwich and 5 years for Part-time students. The course could cost you up to £4,000 or more. Aside getting a degree, you are also expected to take professional courses and exams.
The National Association of Estate Agents different trainings for beginners and those who want to upgrade their knowledge base. Some of the courses include:
- Effective Selling Skills
- Effective Estate Agency Part 1 & 2
- Essential Law for Residential Estate Agents
- Consumer Protection Regulations
- Conveyance Practice and Procedure and many more
Most of these courses and trainings are hourly based and fees could range from £50 – as high as £500.
- In Canada
Ontario to be precise; aside degree courses, there are other necessary courses you must take to get licence to practice as a real estate agent. They include:
- Course 1 ($500)
- Course 2 ($520)
- Course 3
Course 3 is divided into Course 3 general ($330) and Course 3 advanced. Course 3 is further divided into 2 thus; Course 3 advanced residential ($400) or you could take Course 3 advanced commercial. Pre-registration courses cost $1,820 while Articling Courses cost $1,360. These courses are also available to correspondent students.
- In Australia
The Real Estate Institute of South Australia which is an approved delegate of the Australian Skills Quality Authority is the industry leader in real estate courses in Australia. The Institute has course in Real Estate Sales Agent ($4,000), Property Management ($990), Own Your own Real Estate Agency ($5,800), Home Sustainability Assessor ($295) and so on… These courses could be taken on part-time or full-time basis. Online options are also available to students abroad.
Most of the schools have options available for correspondence students. This is a good idea for busy people who want to further their education and improve their knowledge base in real estate. It affords them the opportunity to work and study at their own pace, though (there is still a required time limit to complete whatever course program one is undertaking).
Can You Become a Real Estate Agent By Doing Courses Online?
Taking online courses can help you avoid all the hassles that come with having to travel abroad or leave one’s place of regular abode and work. Anyone who desires, but does not have the time to attend classes as a full-time or part-time student can take the online option. The beautiful thing is that your certificate will not read “Online Certificate” upon the completion of so and so course.
One may be concerned about not having physical interaction with lecturers and fellow students, but many schools now inculcate forum on their sites so that online students can also interact and share ideas. The platforms also allows for student-teacher interactions, so there is no fear with interaction, only that it is not physical.
Career Options for Realtors or Real Estate Agents
- Office assistant
- Licensed agent assistant
- Rent agent
- Assistant in a department of a large real estate organization
- Work in the mortgage division of a bank or lending institution
- Residential realtor
- Commercial real estate agent
- Real estate appraiser
- Property manager
- Property developer
- Urban planning
Skills and Personal Traits You Need to Become a Successful Real Estate Agent
- Inter-personal/relational skills-: This is probably the most important skill/trait a real estate agent or someone who wants to go into the profession needs. Your ability to connect and get along with associates and prospects and maintain a cordial relationship with them can bring you a lot of business opportunities.
- Communications skills-: It is not enough to know your product/service, but having the power of gab to be able to communicate its value to your prospects is also critical. The product may be very good and what the prospect needs, but if you cannot communicate that value, then you may just have lost a valuable client.
- Perseverance-: This is otherwise referred to as tenacity. Your ability to stay dogged and hold on even in the face of challenges. When business does not seem to be on the bullish mode or clients are defaulting on their part and things are looking down rather than up, at such time you must learn to dig deep and tell yourself, it is only a phase and it will pass.
- Financial management skills-: Money is really tempting; so when your business begins to boom and money is flowing, it takes a lot of discipline and financial discipline and management skills to know how to manage and channel the funds for growth of the business. So, if you don’t have the skills of financial management, it will do you a world of good to go enroll in a financial institution where you can be taught.
- Self-restraint-: One of the basic truths about business is that you will have clients that will get on your nerves and make you angry. But maturity demands that you learn to control your emotions and keep calm even in the face of provocation. The same self-restrain is also applicable in the management of finances.
- Local knowledge-: How much do you know about the area where you primarily want to locate your business? And how much of the knowledge of the real estate business do you have as it relates to that area. The more knowledge you have the better your chances of success in your business. You must know what works and what does not work.
- Organizational skills-: When your business begins to grow, and you are not well organized it will tell eventually on how you attend to your clients and the total outlook of the business. If you are not a naturally organized person, you may need to hire someone who can help you organize things effectively.
- Presentation skills-: Just like communication skills, you must have a good sense and knowledge of presentations. You must be able to package your presentations very well. Whether it is in video format, PowerPoint of Hard copy document. The way you do it shows how detailed and serious you are as a business person. Presentation skill will also come in handy in your sales/marketing process. This sample real estate agency marketing plan template can show you what needs to be done.
- Well groomed-: You must keep in mind that people see you first before they hear And in almost all cases they make up their minds whether or not to do business with you based on your appearance, hence you must be well groomed always. Remember that the way you dress is the way people will address you.
- Honesty/integrity-: This is the bedrock of every human relationship, be it personal or professional. Let your yes be yes and you no, no. Don’t promise what you can’t deliver and make sure you deliver what you promise. When people can take you for your words, then they can repose confidence in you and trust you to do business with.
- Self-motivation-: There will be times that government policies will be stringent. There will be times when you feel like throwing in the towel because of challenges. At such times, it is your personal resolve to go on and not give up that will make the difference. Encouraging yourself to hold on and go on, when everything else is saying give up.
By and large, the success of any business as well as yours, depend on many factors, both within and outside of your control. But ultimately, it is your own personal resolve that will ensure you succeed or not. How badly do you want to succeed in this business? Are you prepared to go all the way in this profession or at the slightest difficulty you are going to just give up and move on to some other things? Think on these things!
Real estate agency as a line of profession and business holds many opportunities and many people who are practitioners can tell you that they would rather do this than do something else.
Those who have made billions of dollars would say that all that is required to be a real estate agent is the ability to be hardworking and the zeal to take initiative at all times. Therefore; you can go beyond just being a mere real estate agent for someone else’s company by starting your own real estate agency business and succeed. To do this, you need a real estate agency business plan. If you can do this, there are no limits to how far you can go. The only limits are the ones you set for yourself.