What it takes to work in real estate

Becoming a real estate professional means getting licensed to buy, sell, or manage property on behalf of clients. The path is straightforward: pass a state exam, join a brokerage firm, and follow your state's renewal rules. Most people can complete the requirements in two to four months, though the timeline depends on how quickly you study and when your state offers exams.

Real estate work is commission-based, so you earn money when deals close. You'll need to decide whether you want to sell residential property, commercial property, manage rental units, or some combination. Each path uses the same license but leads to different day-to-day work and income patterns.

Key Takeaways

  • You must pass your state's real estate salesperson exam, which requires pre-licensing education (usually 60 to 120 hours) and a passing score on a standardized test.
  • After passing the exam, you join a brokerage firm—you cannot work independently as a new licensee, and the brokerage takes a percentage of your commissions.
  • Your license must be renewed every one to two years depending on your state, and renewal requires continuing education hours and a fee.
  • Real estate income is entirely commission-based, so you earn nothing until a transaction closes, and you should plan for irregular paychecks and slow months.
  • Some states allow you to work toward a broker's license after gaining experience, which lets you open your own firm or manage other agents.

Pre-licensing education and the state exam

Before you can sit for the exam, you must complete pre-licensing coursework approved by your state. The number of hours varies: most states require 60 to 120 hours of classroom instruction covering property law, contracts, ethics, financing, and fair housing rules. You can take these courses online, in person, or through a mix of both, and many real estate schools offer them in evening or weekend formats.

After finishing the coursework, you register with your state's real estate commission and schedule your exam. The test is multiple-choice and covers state-specific laws plus general real estate principles. Passing scores range from 70 to 80 percent depending on your state. You can usually retake the exam if you don't pass, though you may have to wait a set number of days and pay another fee.

The exam itself takes two to three hours. Some states offer it at testing centers year-round; others schedule it on specific dates. Check your state's real estate commission website for the current exam schedule and fee, which typically ranges from $100 to $300.

Joining a brokerage firm

Once you pass the exam, you cannot work as an independent agent. You must join a brokerage firm, which is a company licensed to conduct real estate business. The broker is responsible for your conduct and compliance with state law, and in return takes a percentage of every commission you earn—typically 50 to 80 percent for new agents, though this varies widely by firm and location.

Finding a brokerage involves researching firms in your area, asking about their commission split, training programs, and support for new agents. Some large national firms like RE/MAX, Keller Williams, and Century 21 have thousands of offices; others are small local operations. Larger firms often provide more training and marketing support but may take a bigger commission cut. Smaller firms may offer a higher split but less infrastructure.

When you join a brokerage, you sign a contract that spells out the commission split, any desk fees or technology charges, and how long you're committed to the firm. Most brokerages require you to maintain your license and complete continuing education while you work there.

Licensing fees and ongoing costs

Beyond the pre-licensing course and exam fee, you'll pay to maintain your license. Renewal fees vary by state but typically range from $100 to $500 every one to two years. Most states also require 12 to 36 hours of continuing education per renewal period, which you must pay for separately—usually $50 to $200 depending on the provider.

Your brokerage may charge additional fees: desk fees (monthly rent for office space), technology fees for their MLS access or client management software, or transaction fees per deal closed. These can add up to $100 to $500 per month depending on the firm. Some brokerages bundle these into a lower commission split instead.

You'll also need to budget for your own business expenses: a reliable vehicle, professional clothing, business cards, a website or social media presence, and possibly advertising. Many new agents spend $2,000 to $5,000 in their first year on these items, though this varies based on your market and how aggressively you market yourself.

Understanding commission structure and income timing

Real estate agents earn money only when a transaction closes. A typical residential sale generates a commission of 5 to 6 percent of the sale price, split between the buyer's agent and the seller's agent. Your brokerage then takes its cut, leaving you with your portion. On a $300,000 home sale with a 6 percent commission, the total commission is $18,000; if your brokerage takes 70 percent, you receive $5,400 for that transaction.

The catch is timing: from the moment you list a property or take on a buyer, weeks or months may pass before the deal closes and you get paid. During that time, you've spent time, gas, and marketing money with no income. Many new agents go three to six months without a paycheck while they build their client base.

Income is also seasonal. In most markets, spring and summer are busy; fall and winter are slower. You need to budget carefully and build savings to cover slow months, especially in your first year.

Residential versus commercial real estate paths

A single real estate license covers both residential and commercial work, but the two careers are quite different. Residential agents sell single-family homes, condos, and small apartment buildings to individual buyers. The transactions are smaller, the sales cycle is faster (typically 30 to 60 days), and there are more potential clients. Most new agents start in residential because the barrier to entry is lower.

Commercial agents handle office buildings, retail spaces, warehouses, and larger apartment complexes. Deals are bigger and commissions are higher, but the sales cycle is longer (often 90 days or more), and you need deeper knowledge of financing, zoning, and business operations. Commercial agents typically spend two to three years in residential first to build experience and a client network.

Property management is a third path: you oversee rental properties for owners, collecting rent, handling maintenance, and managing tenants. Some states require a separate property management license; others allow you to do it under your real estate license. Property managers earn a percentage of monthly rent (typically 8 to 12 percent) rather than a one-time commission, so income is more stable but usually lower than sales.

Building your client base and staying licensed

Your first six months to a year are about building relationships and getting your first few deals closed. Most successful agents rely on referrals from past clients, sphere of influence (friends, family, former colleagues), and consistent marketing. Social media, open houses, door-knocking, and farming (focusing on a specific neighborhood) are common strategies.

Once you're licensed, you must renew your license on schedule—typically every one to two years depending on your state. Renewal requires paying the renewal fee, completing continuing education hours, and submitting the paperwork to your state's real estate commission. If you let your license lapse, you have to retake the exam to get it back.

Many agents also pursue additional designations like the Certified Residential Specialist (CRS) or Accredited Buyer's Representative (ABR) to stand out and command higher commissions. These require extra coursework and experience but are optional.

Moving toward a broker's license

After you've worked as an agent for a few years and built experience, you can pursue a broker's license. Requirements vary by state but typically include one to three years of active experience as an agent, additional coursework (often 60 to 120 hours), and passing a broker's exam. A broker's license lets you open your own firm, hire and supervise other agents, and keep a larger share of commissions.

Becoming a broker is a significant step because you're now responsible for compliance, trust accounts, and the conduct of your agents. It requires more capital to start (you need an office, insurance, and operating funds) and more administrative work. But it's the path to building a larger business and scaling your income beyond what you can earn as a solo agent.

Frequently Asked Questions

How long does it take to get a real estate license?

Most people complete pre-licensing education and pass the exam within two to four months. The timeline depends on how quickly you finish the coursework and when your state offers exams. Some states offer exams weekly; others schedule them monthly or quarterly.

Do I need a college degree to become a real estate agent?

No. Most states require only a high school diploma or GED, completion of pre-licensing education, and a passing score on the state exam. Real estate experience, sales background, or a college degree can help you succeed, but they're not required to get licensed.

Can I work part-time as a real estate agent?

Yes. Many agents work part-time while keeping another job, especially in the first year while building their client base. However, real estate is commission-based and unpredictable, so part-time agents often earn less than those who work full-time and can be available to clients on short notice.

What happens if I don't sell any homes in my first year?

You won't earn any commission, but you'll still owe brokerage fees, continuing education costs, and license renewal fees. This is why most agents need savings or another income source to survive the first year. Some brokerages offer training stipends or desk fee waivers for new agents to help with this.

Can I switch brokerages after I'm licensed?

Yes. You can move to a different brokerage at any time, though your contract may require notice or have a waiting period. Your license stays valid; you're just changing which broker supervises you. Many agents shop around for better commission splits or support as they gain experience.