In this post, we will examine in detail, the pros and cons of being a realtor, how to become one, and the importance of realtors in the real estate industry. Since the journey to become a realtor is not uniform across all the states in the USA, this guide will focus on the state of Texas only.
- What is a realtor
- Importance of Realtors in the Real Estate Industry
- The Pros of Being a Realtor
- Potential for High Earnings
- Flexibility and Independence
- Opportunities for Networking
- Helping Clients Achieve their Dreams
- Constant Learning and Growth
- The Cons of Being a Realtor
- Variable Income and Uncertain Market
- High Competition
- Workload and Time Commitment
- Emotional Stress and Financial Risks
- Continuous Professional Development
What is a realtor
Before going into the pros and cons of becoming a realtor in Texas, it is important to understand who is a realtor in the real estate industry.
A realtor is a real estate professional who is a member of the National Association of Realtors (NAR) and subscribes to its code of ethics. Compliance with this code of ethics became mandatory in 1924 while awarding membership of the body.
Who can become a member of NAR? Agents regardless of whether they work in the residential or commercial sector as real estate brokers, property managers, and salespersons can hold the title of realtor.
Strict rules are maintained by the Association on the use of the realtor trademark. Only professionals having membership as a realtor-associate or a realtor are licensed to use the realtor term against their name or their real estate business.
Further, according to NAR guidelines, when a member uses the realtor trademark, it must be in all capital letters set off against the member’s name by punctuation.
How to get a realtor license in Texas.
The prerequisites to becoming a realtor in Texas are common to all states in the USA. An applicant must be 18 years of age or older and an American citizen. Lawfully admitted aliens in the country may also apply for a realtor license provided they have been granted working rights in the country.
Once these conditions are fulfilled, the process of getting a license will start.
Check out the five steps here.
- Complete the 180 hours of pre-licensing coursework approved by the Texas Real Estate Commission (TREC). It consists of 6 30-hour modules on topics such as Principles of Real Estate, Law of Contracts, Law of Agency, Real Estate Finance, and more.
- Apply for a salesperson’s license with TREC.
- Get yourself fingerprinted at the Texas Department of Public Safety. TREC will verify it to check if you have a good moral character without any past criminal record.
- Take the state exam that has 85 MCQs in the nation section and 56 in the state section. You must get at least a score of 70% to pass the exam.
- Get a sponsoring broker to guide and mentor you.
Once all these steps are completed, TREC will issue a real estate license to you.
How hard is it to become a realtor in Texas?
Like any professional exam, it is not easy to pass the test if you do not study hard and complete the 180 hours of coursework thoroughly. Courses designed by top providers like RealEstateU have experienced real estate experts as instructors. This gives our students an edge as compared to other providers.
What is the cost to become a realtor in Texas?
There are several variables to arrive at the cost.
The cost of the 180 hours of coursework varies between providers. We at RealEstateU offer it at an incredibly low $249. Then there is the license application fee of $185, the Texas real estate recovery fee of $10, the fingerprinting fee of $38.25, and the licensing exam fee of $43. The total cost to become a realtor in Texas at a minimum is therefore $525.25.
Importance of Realtors in The Real Estate Industry
Hiring a realtor to buy or sell a home will give you the confidence that all will be well with the real estate transaction and there will be no lapses in the deal. A realtor has gone through extensive studies and continuing education and is therefore ideally placed to provide effective services.
Here are some reasons for the importance of realtors in the real estate industry.
- Pricing your home right: If you are a seller of a home, taking the help of a realtor is necessary. It is because a realtor knows about the local market trends and the selling price of similar properties in the area. You are thus assured of the best price for your home.
- Professional expertise: A home buying or selling activity is one of the biggest financial decisions you will ever make. Hence you should have a professional with the required expertise to guide you in every step. A realtor will ensure that the process goes through smoothly.
- Valuable perks: Sellers often try and put their property on the market directly to avoid the commission payable to realtors. However, to get the property moving fast off the market and to get a good price for the seller, realtors often provide additional services at no extra cost. These include getting a photographer to take beautiful photos of your property, a deep cleaning session, staging advice, and others.
- Get your home on the MLS: The biggest challenge to selling a home without a realtor’s help is to find a potential buyer. However, a realtor has access to the MLS, a system that buyers search to find updated home listings. Buyers quickly find their dream home and sellers get their homes off their hands.
Realtors have a wide network of connections that they utilize to help both buyers and sellers get the best real estate deals.
Let us now go through the pros and cons of being a realtor.
The Pros of Being A Realtor
Potential for high earnings
The sky is the limit for realtors when it comes to potential earnings because they work on commissions. A realtor gets about 2.5%-3% commission on the price of a property. This can be substantial based on local market conditions.
In most housing markets in the USA, the median home prices range from $400,000 to $500,000. Hence, a realtor walks away with $12,000 to $15,000 for a single deal. Realtors decide how many clients to work with which means, they are in charge of how much to make in a year.
Flexibility and independence
Realtors set their schedules and this makes fitting work around their lives a lot easier than professionals in other industries. They get to attend more important events for their children and get to spend quality time with family.
Even though realtors must work under a broker to legally transact real estate business, they run their business and are entrepreneurs. They get to choose how much to work and who to work with even though most brokerages support realtors with marketing and lead generation.
Opportunities for networking
The real estate industry is a business closely connected with people interaction and those who enjoy working with others rise quickly in their careers. You also get an opportunity to meet real estate professionals from other locations and exchange notes on updates in the sector.
Networking through events and seminars helps expand your business through referrals. As a realtor, be active on social media platforms to meet like-minded people.
Helping clients achieve their dreams
A huge satisfaction for realtors is that they help people achieve their dreams about real estate. Sellers get the best price possible for their property apart from help in drawing up documents and contracts. Buyers get the homes they have always wished for and achieve their life’s goals.
The opportunities provided by realtors for homeownership are endless. The gratitude expressed by buyers when they get the keys to the property can be very touching. It makes the hard work put in by realtors worth the effort.
Constant learning and growth
Realtors are on a constant learning and career-enhancing growth curve. They have to be aware of the latest market trends and new rules and regulations governing the industry. It is not only to deliver the best results to clients but also to enhance their knowledge base for a bright career.
Further, realtors do not have an option to do so. One of the ways of how to get a realtor license in Texas and renew it every two years is to go through 270 hours of coursework. Of these, 180 hours are pre-licensing courses and 90 hours every two years. Failing to do so will deactivate the license. Hence, realtors are among the best-informed in the real estate industry.
The Cons of Being A Realtor
Variable income and uncertain market
Most real estate transactions are one-time affairs. Clients typically buy or sell property once in their lifetime unless they want to move into a larger or smaller home later. As a realtor, you will face slow months when your income will be negatively affected or even dipping market conditions. This can be a real challenge unless you have enough savings to fall back on to get you through these tough times.
There are thousands of realtors in Texas and at any given location in the state, buyers and sellers will have several options to choose from. This is tough for realtors as they need to differentiate themselves from others and find a specific niche for themselves. This might be specializing in a particular market or location, type of property, or type of buyer.
To rise above the competition, tap into your sphere of influence and get referrals from friends and family or reach out to past satisfied clients. Overall, though, it is not easy for realtors in the highly competitive environment of the real estate sector.
Workload and time commitment
In the initial stages of your career, it is easy to get discouraged as you do not earn the money that you hoped for. In such cases, you have to put in extra hours to promote yourself and attract clients. You must manage your clients, transactions, showings, and listings all at once. All these require a huge time commitment. Even though you are your boss, there might be showings over the weekends as per clients’ requests and you have to follow their schedules. Hence, you must have the required passion to happily bear this workload and time commitment at all hours.
Emotional Stress and Financial Risks
Realtors have the flexibility to set their schedules. However, they cannot strictly restrict themselves to a standard 40-hour schedule and have to work around clients’ timetables.
Realtors will have showings or open houses when clients have free time and this might be in the evenings or over the weekends. This often leads to emotional stress as routines change very fast and you might miss out on time with family and friends. But there is nothing that realtors can do about it as their earnings are commission-based and they open themselves to financial risks if they are rigid about timings.
Continuous professional development
As if demands for time from clients are not enough, becoming a realtor in Texas and maintaining the license requires continuous updating of their knowledge base. TREC mandates that realtors go through 90 hours of coursework to renew their licenses every two years.
Added to the other work pressures, this is one of the cons of being a realtor in Texas.