Become a Real Estate Agent

If you’re looking into how to start a real estate business, you must do the following:

  1. Become a licensed real estate agent.
  2. Become a licensed real estate broker.

In order to become a licensed real estate agent, there are specific requirements in each state that must be met to obtain a license for real estate sales.  Generally, you would need to be a minimum of 18 years of age and meet all other state requirements demonstrating that you are a trustworthy person (e.g., no felony convictions).

For example, in the State of Texas, you must complete a state-approved real estate training course of 180 hours that teaches real estate law, contract law, real estate finance, and real estate principles. Once the course is completed, you will sit for the real estate sales exam. When you pass, you must apply to the Texas Real Estate Commission (TREC) within one year of passing the exam.  Also, the state of Texas requires each real estate agent to be sponsored by a licensed broker in order to get your license. Once you have a sponsoring licensed broker, TREC will distribute your real estate agent license to the licensed broker. It should be noted that in the State of California, a real estate agent can obtain his/her license without the need of a sponsor; however, a real estate agent cannot work in real estate until he/she obtains a sponsor. Lastly, most states will require a real estate agent to have fingerprint records on file.

Become a Real Estate Broker

Each state will have specific guidelines that dictate how long you need to be an active real estate agent before you may apply to become a real estate broker. For example, in California, a real estate agent must wait two years. However, in Texas, a real estate agent must wait for at least four years. While work experience is a prerequisite to become a real estate broker, you will generally need additional education as well.  

In Texas, the TREC will require each real estate agent to take an approved course to become a real estate broker. The course consists of a required 270 hours spent in the classroom. In addition, a prospective broker will need to meet specific education requirements. You must have either completed a bachelor’s degree program from an accredited university/college, or you must have completed 630 hours of additional coursework that is approved by TREC. Approved classes include a business course at an approved school of continuing education. However, the state of California does not allow a prospective broker to count continuing education courses toward the broker education requirements. All courses must be completed at the college level.

Start Your Own Real Estate Business

Once you have obtained your real estate broker license, you are well-positioned to form a real estate brokerage business of your own. In simple terms, a real estate brokerage business allows real estate buyers and sellers to come together to complete their real estate transactions. The brokerage will take a percentage of the transaction amount in exchange for negotiating the transaction.

While any real estate market can fluctuate drastically, a real estate agent who has amassed the necessary financial resources and industry contacts is positioned to start a real estate brokerage business that can be profitable. The process of starting a real estate brokerage business involves a significant amount of training, licensing with the state, and required coursework. As such, this process usually takes between two and four years.   

A common characteristic found in real estate professionals who form a real estate brokerage business is an entrepreneurial spirit.  As a real estate broker, you likely entered the real estate business because you find enjoyment in working for yourself. More specifically, you enjoy the freedom of creating your own business model and having a flexible schedule that allows you to create your own niche.

The real estate brokerage business affords many benefits, including increased cash flow, better tax benefits, and treatment, as well as asset appreciation. The leap from real estate employee to real estate entrepreneur will allow you to exert greater control over your work product, which is certainly one of the largest advantages of the real estate investor life. That said, you must educate yourself in the real estate brokerage business prior to investing your capital.  

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