If you're considering a real estate career, plan to study before seeking your first customer. In every state, prospective real estate salespeople must take a basic real estate course. And all states require you to pass a real estate licensing exam before you start selling homes.
Hit the Books
How many classes will you attend, and what will you learn? It depends on the state. Texas requires 180 classroom hours, and New York thinks 45 hours is enough. A Maryland real estate license requires 60 hours in the classroom, says Bill Frost, director of the Coldwell Banker Residential Brokerage in Columbia, Maryland.
California allows home study via the Internet. Mark Chamberlin, owner of Chamberlin Real Estate School in Campbell, California, says a fast reader can finish the California course online in two-and-a-half weeks. His online study program includes a crash-course weekend at a hotel to help you prepare for the state's written real estate exam.
Community colleges in many states also offer the necessary courses. In Fall River, Massachusetts, Bristol Community College's real estate practice course meets for three hours once a week for eight weeks.
Shop around before you decide where you'll take your real estate course. Consider the location's convenience, the cost and the passing rate on the state exam among graduates -- if you can get that information.
How Hard Is the Test?
Why do states require real estate exams? Sandrina Taraszki, former president of The Association of Real Estate License Law Officials says exams and licenses prove an agent has mastered a minimum amount of necessary information about the real estate process. They also give states something to revoke if an agent isn't honest.
Robert Jackson, an agent with Long & Foster Real Estate in Frederick, Maryland, said the training course his broker offered helped him pass the real estate exam. He also studied on his own for a few days. "I passed the test on the first try, but a lot of the credit goes to the person who taught the course," he says. "You do have to read the questions carefully and pay attention to detail. My advice is take the test as soon as you finish the course while everything is still fresh in your mind."
Extend Your Reach
If you live near the border of several states, Taraszki recommends seeking more than one license. A portion of most states' tests include national real estate law, so to pass an exam in more than one state, the extra studying would involve state law only.
Once you pass the exam, you must pay a license fee and find a broker willing to sponsor you. Texas regulators charge $20 to evaluate your real estate education, $79.50 in license application fees and $20 to record your broker sponsorship.
That's just the start of the cash you'll spend to kick off your real estate career. "Your initial cost to get your hours and take the state test is $300," says Shirl Aronson, former director of training for Prudential Olympia, Realtors in Olympia, Washington. "Then, each state has a fee for a license, and you'll pay dues [to national and state real estate associations] and MLS [multiple listing service] fees. It'll be about $1,000 out of pocket and four months until you see anything that looks like an offer. You'll spend money every one of those months to promote yourself and create credibility."
According to Paul Bishop, vice president of research at the National Assocation of Realtors, member income rose for the first time since 2002 to $34,900 in 2011. A rookie Realtor could easily spend $5,000 on business cards, direct mail, advertising and other overhead expenses his broker doesn't cover. And, since you likely won't be paid when you don't have deals to close, you'll need enough savings to cover six months of living expenses while you get started.
It's a bonus if you enjoy school, too, because you'll probably be back again for the continuing education you'll need to renew your license.
Learn about the requirements for getting your real estate license by state.