How to Work in Real Estate
The first real job I got straight out of college was in real estate. It’s an awesome industry to get into, especially for those of you interested in side hustles. So I’d like to offer RVF my datasheet on how to get involved in the real estate industry as a salesperson/broker and why it’s a great idea for everybody to know something about it.
Real estate is awesome because you can do it full-time or part-time. It’s totally up to you and your broker/company. So let’s go over some of the very basic rules. Only applies to Americans (sorry rest of the world)
The VERY VERY BASICS (or PART 1):
The first real job I got straight out of college was in real estate. It’s an awesome industry to get into, especially for those of you interested in side hustles. So I’d like to offer RVF my datasheet on how to get involved in the real estate industry as a salesperson/broker and why it’s a great idea for everybody to know something about it.
Real estate is awesome because you can do it full-time or part-time. It’s totally up to you and your broker/company. So let’s go over some of the very basic rules. Only applies to Americans (sorry rest of the world)
The VERY VERY BASICS (or PART 1):
- You must be at least 18 years of age to be able to get a license.
- You must be a legal US resident.
- You must have at least a high school degree or something equivalent (GED)
- It is HIGHLY RECOMMENDED that you don’t have a criminal record. (This is because you are essentially APPLYING for a real estate license, which means it can get denied. Misdemeanors are usually not a big problem. Don’t have felonies on your record.)
- You must pass a course with a predefined number of hours for the state you want to get a license in. There are caveats to this (like if you majored in real estate in college) but if the caveat applies to you, you most likely don’t need this datasheet. For the majority who have never done anything related to real estate before, you will need to take a course.
- After the course, you must pass a state exam. You can take this as many times as you need to.
- Each state has different requirements for licensing. All of your specific inquiries can be answered by even the simplest Google search.
- There are 2 types of licenses: Salesperson and Broker. You’ll want to focus on the Salesperson for now.
- As a Salesperson, you must work for a Broker first.
- No previous experience is required.
- Some states, but not all, have Reciprocity rules. Reciprocity is what allows you to practice RE in another state without having to get licensed there.
- Reciprocity USUALLY only applies to brokers, but in some cases can apply to salespersons.
- There is no rhyme or reason as to why certain states do or do not have reciprocity. New York has reciprocity with Connecticut (makes sense) and Alabama (doesn’t make sense) but not with neighboring New Jersey (also doesn’t make sense).
- California, famously, has no reciprocity with other states.
- Some states, but not all, require you to be a resident of that state in order to get a license there.
- Brokers will almost always be required to be residents. For salespersons, you usually just need to be a legal resident of the US.
- The exam is not difficult. Most states have a pretty low pass standard. In New York, I believe it was somewhere around 70% and for New Jersey it was even lower…like 65% or so.
- If you fail, you will see your score. If you pass, it will just say PASS. Therefore, if you pass, you’ll never really know how you did.
- You will need to RENEW your license every year/2 years/whatever according to your state’s rules. This requires taking another multi-hour course, but it’s usually fewer hours than the first time around. For example, to renew your license in NY, the course is only 30 hours compared to the 75 pre-licensing course.
- Each state has different rules about where to take the course and how long they have to be. In NY, it was 45 hours when I got licensed (now 75). NJ is 75. Connecticut is just 60. Delaware is 99. States will differ in this regard.
- Most states have approved certain community colleges and private institutions to teach the pre-licensing course. I myself took a night course at a community college. I believe California even allows you to take classes online.
- I preferred the classroom feel of the night course because my instructor was cool, had loads of very interesting and funny experiences, and only had us focus on material that was likely to show up on the test. The rest of the stuff we would learn on the job. When I finished my course, I bought him a nice bottle of wine, which is not necessary or anything. I just genuinely liked the guy.
- The actual licensing procedure is pretty straightforward in all states. Your course will definitely inform you of all of the following:
- You register to take the test either online or on a form that you can mail in and pay a (usually) nonrefundable license fee. This fee varies greatly depending on your state. It could be as low as $50 or as high as $150.
- You complete a fingerprint check at any police station that has the capabilities. I forgot how much I paid, but it was very low.
- You also submit a background check, the fee for which is usually around $75 +/- 25 depending on your state.
- You pick a test date.
- Bring 2 photo-bearing IDs. (Driver’s License, Passport, Military ID, Citizenship certificate, etc… Gym membership cards and such don’t work. Don’t be retarded.)
- Bring whatever proof of registration that you are told to bring. If your registered on a website, you’ll print it out. If you mailed something in, you’ll get something in the mail.
- You may (and should) bring a calculator. There are math-based questions on the exam.
- No cellphones/food allowed.
- You’ll have anywhere between 1.5 to 2 hours to finish the exam, depending on the state. I finished in 40 minutes, but that’s cuz I’m friggin awesome
- And that’s it. If you fail, it shows you your score. If you pass, it’ll just say PASS.
- If you fail, you can retake it so don’t panic.
- My advice to pass the test: When you take the course, take notes/highlight what the teacher emphasizes and then memorize it later when you get home. A week out from the test, go back over all the things you memorized or highlighted.
- CONGRATS! If you pass, you get your license immediately as long as you’ve done your background check and fingerprinting. Now all you need is to find a broker who will employ you!
- Brokers will have no problem hiring you. It requires very minimal investment on their part and they stand to profit if you turn out to be good hire.
- Now, here’s the big secret that nobody will tell you but is kind of obvious: the salespeople with the largest networks and best connections make the most money.
- That means you could be a snot-nosed kid fresh out of college, but let’s say you were a Division 1 athlete and everybody in the neighborhood knows you. Every broker will want to hire you because they know you can attract clients.
- Or let’s say your dad is well-known. Or you just know a lot of people.
- Brokers will hire you and most but not all will offer some sort of training using their own proprietary material. But what brokers are really looking for are people who already have networks that they can bring with them to the firm.
- Looks matter. I didn’t think it was just coincidence that my firm hired a lot of tall good looking former jocks and women who could be models.
- But even looks are nothing compared to your sales prowess. We had one guy there who we affectionately called Oddjob, cuz he was short, Asian, and stocky, but that guy was closing deals left and right even in the middle of the housing market collapse when people were losing jobs.
- It’s the least 9-5 job I’ve ever worked in my life. Oddjob, and some of the other top producers, were very seldom seen at the office. If you were doing your job right, you were out networking and lining up potential clients. Yankee games were a popular client-meeting spot for a lot of the guys there, as were any celebrations/parties/openings.
- Two other guys had this unusual arrangement worked out where they agreed to go 50-50 on every deal either of them came across. Even my boss said he was initially taken aback by how trusting they were of each other but it’s been going strong for the last 10 years. So if one guy is on vacation in Spain, and the other guy closed on a $10 million deal, he’d split his commission with the dude on vacation. There were literally a thousand and one ways you could set up your own commission structure, your work schedule, and your lifestyle.
- Lawsuits happen all. the. time. It’s usually not personal. It’s corporations suing corporations while other branches of those corporations continue to do business with each other.
- Commercial real estate is different from residential real estate. Residential, I feel, is more about helping clients find a good emotional match. I myself worked in commercial, where it was mostly corporations hiring us to lease properties on 20, 50, and even 99-100 year leases for office space. Or some rich Saudi Arabian oil prince who wanted investment properties in NY now that prices had fallen flat, back in 2009.
- Commercial RE is a full-time job, meaning that you may not want to work a second job because it will be too time-consuming. Residential RE, on the other hand, is much more flexible in this regard because you can finish your 9-5 job then show some properties afterwards. With commercial RE, there’s a lot more paperwork than in residential and you work closely with RE lawyers and accountants to create presentations to make pitches to investors.
- The market’s (partially) rigged. And not to the average joe's benefit. Take the real estate lawyers, for example. The ones who’ve been in the game 10-20 years know everything about everything. They’re the ones who sit in the back during sheriff’s auctions, when the city is selling off distressed properties or foreclosed homes. These guys know which homes to buy and which not to, which to flip quickly, which to hold onto, etc… If you’ve ever been to one of these and think you’re going to get rich flipping homes like this, you’re in for a rude awakening. Those RE lawyers probably smile and wink knowingly at each other when they see someone like that come in. Like Ygritte likes to say often: “You know nuthin, Jon Snow.” They, on the other hand, already know everything.
- Having a real estate license means that you now carry a fiduciary responsibility to act in the best interests of your clients. This will teach you very important negotiation skills when you’re trying to work out a good deal for your client.
- I now feel more confident about getting into real estate investing than most people out there. Whether it’s to buy your own home or some investment properties, I know enough that I won’t be taken for a ride. Also, if you are engaging in a RE transaction as the buyer, you are required by law to tell your agent that you have a real estate license. I’m not sure why. But it certainly makes it less likely that they’re going to try to yank your chain.
- I would highly highly recommend real estate to kids in college as a part time job. Probably residential, as commercial usually requires having finished your college degree. If you’re 18 or 19, what an exceptional education you’d receive in sales. Instead of getting hammered every Friday night or doing kegstands, I’d much rather be watching how someone closes on a $400,000 townhouse.
- Time investment on your part is quite minimal. When I was getting licensed in NJ, I took a train over to a community college for a few hours every other night and finished the 75-hour course in 3 weeks over a summer. Or I could’ve done just a few hours 2 or 3 times a week over 2 or 3 months. It’s really not a huge amount of time and at any rate the time you invest in getting this kind of knowledge is an investment more than an expenditure.
- I love working with people who work on commission. There’s a spirit there that you just can’t find among the salaried workers. Even I couldn’t wait to get to work because I always felt like I could possibly miss out on something.
- I also loved the stories they had. You meet some very interesting people in this line of work.
- I also made a lot of interesting connections. Chinese millionaires. Brazilian entrepreneurs with 2 or 3 wives and condos all over Florida and New York. Sons and daughters of dictators and politicians who attended the most hoity-toity private schools in the area, the Brearleys, Choates, Trinities, Daltons, etc…
- This job taught me more about life, women, and society in 1 year than all my previous 20+ years of life experiences did. That’s either really sad or inspiring, I haven’t decided which.
- The basic requirements you need to get a real estate license: like be over 18, a US citizen, have at least a HS degree, don’t have felonies, etc…
- Take the course either at local community college or private institution so you can take the test.
- Take the test. Retake if you fail.
- What the real world is like: RE is all about who you know. Hustle your ass off, learn as much as you can, make solid connections, make money hand over fist.
- I’d recommend everybody, regardless of situation, to invest some time in learning about real estate. If you’re in college, you’re in the best situation because your school might offer courses for free or you could apprentice at an agency.