Many aspiring real estate agents want to know if NOW is a good time to get a real estate license.
We’ve all heard that the next recession is right around the corner. We’ve certainly seen real estate growth slow over the last year or two in much of the country. Given that the housing market is getting softer, is this the right time to launch a new real estate career?
This post will answer that question.
Is NOW a Good Time to Get a Real Estate License?
The question people are asking is, “Is now a good time to get a real estate license?” But the real question is “Is now a good time for me to get a real estate license?”
Your unique circumstances are a big factor in whether or not now is a good time for you to get your real estate license. So we’re going to give you a few personal questions to ask yourself to determine if you’re at the right place in your life to get your real estate license.
Then we’ll consider the real estate market as a whole and provide the pros and cons of getting your real estate license in today’s slowing economy.
Some Personal Considerations
Time and money are the biggest personal considerations to make when you’re thinking about getting a real estate license.
1. Do you have the time to invest in your real estate career?
Every state is different, but in general, you’ll need 2-6 months of real estate education courses before you can qualify to sit your state real estate exam. This typically means investing a few hours every day in your real estate courses for the next few months.
Your required real estate courses teach you the basics of real estate principles, practices, finances, and contracts. They usually do not include any form of practical sales training. So after you get your license, you’ll probably spend the first few months of your new career learning the basics of real estate sales. It takes most agents 3-6 months to close their first sale after getting licensed.
While these months of education and training are a serious consideration, compare this to the education requirements for similar career paths. Most careers that pay as well as real estate can require 4-year degrees or even graduate degrees! When you think about it, the amount of time you need to invest in preparing for your real estate career is nothing compared to the potential upside of a successful career in real estate.
But there’s another time-based consideration: the weekly schedule. Real estate is not a 9-5 job. Most deals happen during evening hours and on weekends. This schedule can be difficult (although certainly not impossible) if you have young children or other family members who require constant care.
And because your income is entirely commission-based, you can’t really take time away from work without taking a hit on your income. This makes it tricky to get away for holidays and vacations.
2. Do you have the money to invest in your real estate career?
Compared to other careers with the income potential of real estate, it is actually fairly inexpensive to launch a real estate career. After all, you don’t need to pay for a 4-year university education or a graduate degree of any kind.
You’ll need to pay for your real estate courses (which vary greatly by state, generally totaling somewhere between $200 and $800 for all required courses), plus your exam fees and your local licensing fees.
Then there are the business expenses of actually getting started. Remember: starting a career in real estate is like launching your own business. You will need to spend a little money before you can make any money.
Common starter-expenses include:
- a website by the way, it’s entirely possible to DIY a professional-looking website with zero IT experience. Check out How to Build a Real Estate Website for completely free step-by-step instructions on building your own website. It’s easier than you might expect, and DYI-ing your site will save you thousands of dollars!
- business cards
- advertising
As we mentioned in our discussion about the time investment of a real estate career, it will probably take 3-6 months to receive your first paycheck. This is important from a financial perspective because you’ll need to be able to cover your living expenses during that time.
Some savvy new agents are including unconventional real estate services in their real estate offerings to create more immediate income streams while simultaneously building their real estate sales business.
Now that you’ve considered the time and expense of launch a real estate career, we can move into the interesting topic of whether or not now is a good time to get your real estate license as far as the housing market is concerned.
The Downsides to Getting a Real Estate License Now
Considering that we’re heading toward a likely recession (or at least the fact that the national housing market has slowed down substantially over the last year or two), there are a couple downsides to getting your real estate license right now. Let’s look at them.
1. Deals are harder to come by
Fewer sellers are willing to enter the market right now. Which means there is a lower inventory of homes available for sale. Which means there are fewer opportunities to close deals.
2. The competition is fierce
With fewer deals to be had, the competition for every listing and every buyer is fierce.
This competition is hard on new agents because you don’t yet have any referrals or repeat business coming to you. In fact, you don’t even have testimonials from satisfied clients to help you sell yourself to new clients.
So you have a couple additional hurdles to overcome in the current economic climate. The good news is that there are also some opportunities available to agents who are willing to tackle these obstacles…
The Upsides to Getting a Real Estate License Now
If you’re coming to your new career with your eyes open to the challenges of starting your career now, you’re going to be able to take advantage of a few key benefits.
1. A down-market is a gold-mine for skilled agents
Many agents who launched their careers during the strong housing market of a few years ago are ill-prepared for this natural slow-down. They’ve had leads handed to them on a silver platter, and they haven’t developed the skills to land new clients on their own. But it gets worse for them: not only do they not have the skills, but they have entirely incorrect expectations. They expect leads to fall from the sky because that’s what they’re used to. And now, many of them are unable, or unwilling, to do the work required to build their skills.
This gives you an advantage. You expect to work hard to build your skills in prospecting, negotiation, and sales. You expect to spend time landing new clients. So you’re going to beat out those fair-weather competitors 9 times out of 10!
2. You can take advantage of recession-proof income streams
Real estate agents who entered the market while it was strong think that real estate transactions are the only way to make money in real estate. But, as an agent of the buyer’s market, you’ll know better!
This market is the perfect time to use your new real estate license to offer recession-proof real estate services that create independent income streams, while simultaneously growing your database of clients for future real estate sales and purchases.
Let’s look at a couple quick examples of services you can offer in a slow housing market to provide more value, grow your client base, and keep a steady flow of income.
Property Management
During the last recession, many cities saw a jump in the single-family rental market for a couple reasons:
- Many homeowners didn’t want to sell at the bottom of the market, so they chose to rent out their homes when they had to move for any reason (job transfer, retirement, etc).
- Sadly, many homeowners lost their homes due to foreclosure and were forced back into the rental market.
This increased rental activity become a solid source of income for real estate agents who offered property management services. It just takes a little organization to stay on top of your portfolio, so make sure you invest in some inexpensive, but effective, property management software.
Property Tax Appeals
I can’t understand why more real estate agents don’t offer property tax appeal services in a down market. Well, yes I can…it’s because most agents aren’t even aware of property tax appeals.
But it’s surprisingly simple. If your county over-values your clients home for property tax purposes (which is highly likely in a declining market), you can appeal those valuations to reduce your client’s property taxes, and collect a percentage of the savings as your fee for service.
All you have to do is:
- Find the assessed values (either online or from your client’s tax bill)
- File an appeal application with your county
- Complete a CMA to show a more accurate value of the property
- Present the CMA to your county assessor (sometimes this can be done via email, and sometimes it requires an appearance at the Board of Appeals) to achieve a reduction in the assessed value
- Issue your invoice to your client, and collect your income
To learn more about property tax appeals, check out How to Make Money with Property Tax Appeals.
3. Now is the perfect time to be your own client
A down market is the perfect time to invest in real estate. It’s like every single property is on sale! In many markets, you can purchase real estate for a fraction of the cost from a few years ago. And with your new real estate license, you can represent yourself on the purchase of your new investment property.
The process of purchasing will help you see the process through your buyer’s eyes so you can provide your future clients with better service. It will also give you a chance to walk through the real estate process (the paperwork, the negotiations, the escrow period, and the closing) without the fear of embarrassing yourself in front of new clients.
If you have the funds available to invest in your own product, you’d be crazy not to!
Side note: don’t ignore real estate investing during this golden period just because you don’t have enough saved for a down-payment on a new property. Consider your options. We have some genius strategies for newbie real estate investors, and we can show you 18 different ways to invest in real estate!
4. You’ll be well-positioned when the market rebounds
Starting your new career now will give you a massive advantage as the market starts to rebound.
See, during the recession, many agents lose faith and drop out of the industry. So when the housing market rebounds, and we suddenly have an influx of buyers and sellers again, there will be fewer agents than usual to handle all this new business.
Additionally, you’ll have testimonials by this point, as well as previous clients who can provide you with referrals and repeat business. So you’ll have a leg up on the agents that enter the market during the next seller’s market (when real estate sales looks comparatively easy and attract a new group of agents).
And of course you’ll be accustomed to the hard work required to be successful in real estate sales during a slow market. So you’ll have the ability to outwork your competition when the market cyclically becomes over-saturated with new agents.
How to Get Your Real Estate License
If you have what it takes to be a savvy, hard-working agent in a slow market, NOW is a great time to get your real estate license!
The path to your new real estate career starts with education. You do not need a college degree, but each state requires specific real estate courses before you can qualify to take your state real estate exam. Choosing a good real estate school is critical.
You could have the most affordable school, the school with the nicest teachers, the school with the most fun curriculum…but if they don’t prepare you to pass your real estate licensing exam, they’re a waste of time and money.
Instead, look for the school that has the best exam pass rates in your state. Your Real Estate Commission should publish exam pass rates by school. Here’s an example from the Texas Real Estate Commission. You can see what percentage of students from any given school pass their real estate exam, as well as the number of students from that school who’ve taken the exam (so you can tell how big the sample size is).
If you’re lucky enough to live in Texas, New York, or Michigan, check out AceableAgent. They have a stellar track record of exam pass rates, and they still somehow offer some of the most affordable programs available. For all other states, Real Estate Express is one of the most reputable real estate schools with engaging curriculum and comparatively high exam pass rates.
Once you’ve passed your required courses, you can take your real estate exam. Pass that exam, and you’ll be able to apply to get your real estate license.
And then the fun begins!
Want to know more before you dive in? Check out some of our top books for new agents. Many of these are great reads for anyone even considering a career in real estate. They’ll give you the low-down on the day-to-day realities of being a real estate agent. And you can use all that info to help you decide if you’re ready to get your real estate license.
