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The most recurrent question to which each individual is dying to find the answer is the shortest pathway to success. Every human being desires a life of eternal peace and rich wealth.
As many well-known influencers dictate, one of the only discovered and Sureshot ways to lead an enthralled retirement life is generating passive income. The earlier you take charge of your passive income sources, the better results await you in the later end.
There are a plethora of choices to opt for in the vast field of the Real estate that can prove to be a golden treasure for people willing to exert themselves. House flipping, Commercial Real Estate agent, Buyer’s Agent, and Property Management are a few of those opportunities.
But how to make money as a real estate agent? That is a buzzing and exciting ask. Is Real estate even worth your endeavor, or is it just another hoax of self-proclaimed trendsetters? Let us excavate the truth!
Who is a Real Estate Agent?
Can you actually occupy a position or post with impartiality, having no knowledge of its duties and responsibilities? Before you even think about entering the domain of Real Estate, it is imperative that you understand its true essence.
A Real Estate Agent is a professional and qualified personnel with the license to carry out real estate-related transactions. He is the person you look for when in demand of any house or land or when you wish to supply property for rent or selling.
But how does a real estate agent make money? He either itemizes properties for the seller or probes a house or land for the buying party. In doing so, he charges a predetermined percentage of commissions from the involved party.
A Real Estate Broker is an authority superior to the agent. A broker is responsible for investigating the legal formalities and technical operations that take place behind the formation of contracts.
A broker is, no doubt, more qualified and thus governs the actions of an agent. It is mandatory for an agent to work under the apprenticeship of a broker.
See Also: Top 10 Fastest Ways to Grow Money in 2023
3 Steps to Become a Real Estate Agent
After exploring the expansive dimensions of a real estate agent, you must obviously be interested in understanding the procedure involved in becoming one. Be assured that the process, though quite time-consuming, is simple in reality.
The pace of undergoing this path of action solely depends on your interest and willpower to achieve great heights in the area. Let us now proceed with the planning.
Before diving deep into the subject, it is vital to understand the requirements demanded by the state for becoming eligible to work as a real estate agent or broker.
Completion of required courses
Interest alone cannot earn you the degree, and you must also have a thorough understanding of the subject to develop your skills and learn new tactics.
Most states have a 60-hour course that imbibes various topics like law practices, contract formulation, financing, evaluation, etc. One has to complete these courses with respectable comprehension necessarily.
Passing the exam
Yes! After completing the state’s course and modules, you must also give a test. Some states ask you to take state-level as well as national-level exams to become a full-fledged real estate agent.
Also, the charges may differ between the states. One state may charge $65 for the same test, while the other may ask $85. Regardless, you have 3 chances to pass the exam with acceptable grades or start with course modules again.
See Also: 10 Best Certified Financial Planner Courses in 2023
How to make money as a Real Estate Agent?
Let us, at long last, point out the real issue you have been patient to know about. How exactly do you make money as a Real estate Agent? And let me relay to you that these are pretty effective ways.
1. Becoming an agent of the buyer
A buyer’s agent is the individual who provides guidance to promising buyers and takes them to visit various sites that may intrigue them. He is responsible for understanding and comprehending the requirements of the customers.
Based on their preferences, the agent makes available the best property for the buying party. The agent earns his share of income as a commission for all the search and paperwork he does.
2. Enumerating the property for the sellers
If dealing with clients is not your forte, you can try hands on the other side of the desk. The seller’s agent is the other side of the dealing, making great money working for the selling party.
Unless specifically mentioned, the agent earns his commission based on the number of deals he closes with a certain percentage attached to them. This percentage range between 7%-8%. The agent has to list all the property seller is interested in giving on rent or sell off.
3. Conducting short sales
A big hurdle in real estate dealings is the shortage of finance from the buying party. The buyer is always keen to pay the least possible amount, while the seller expects to extract maximum money for his sale.
But sometimes, the seller is unable to make enough money to pay off the loans acquired from the bank against his property. In such cases, the real estate agent strikes a deal with the bank to accept a cash deficit payment for the property.
Easier said, the process usually takes weeks and even months to finalize. Therefore many agents avoid this job, but the commission rates here are pretty lucrative for those who stay.
4. Completion of BPO (Broker Price Opinions)
When working in this field for quite a time, you start to have an idea of the exact value of the property just by analyzing the exteriors and the interior setups.
The work of a BPO maker is to draft reports of different homes and properties so that they are appropriately evaluated as per the market standards. The job is more suitable for those who take an interest in number games and statistical analytics.
5. Managing the properties
Well, maybe you are unable to sell houses to potential buyers and even fail to scrape out the best deals on property for the customer. But there is still hope for you.
You can work as a property manager who is the caretaker of houses, bungalows, and other such properties on behalf of the owner. He looks after maintenance, renovation, tenant searching, and rent collection.
6. Working as a broker
Why not give a boost to your dull job? Apply to become a real estate broker and earn higher commissions for less effort, at least physically. A broker is a superior who trains and educates novice agents in the skills of the market.
A broker usually indulges in behind-the-desk jobs and looks after formal and legal work. He takes around 35% o the total commission received by the agent. In many states, it is the broker who accepts the commission and delegates a fixed percentage to the agents.
Frequently Asked Questions
How long does it take to make money as a real estate agent?
It takes time in the beginning when you start working in this field. You also need to factor in the time from when a house goes under contract to when it closes, which may take a month or longer. Real estate agents don't get paid until after closing. The longer a sale takes, the longer you'll have to wait to get paid.
Who can become a real estate agent?
Any individual above 18 years of age who has cleared the concerned state's real estate license examination can become a real estate agent.
Do Real Estate Agents Get Paid Weekly?
Most real estate agents do not get paid weekly. Instead, they work without pay in anticipation of earning commissions on the sales they make. These commissions are paid at closing and split between the brokers and the agents.
There are a lot of ways one can earn money as a real estate agent. After exploring these different fields of real estate, one can become the buyer’s agent, enumerate property for sellers, conduct short sales, work as a property manager, or even as a broker.