How do you make money with a real estate license? It’s actually hard NOT to make money with a real estate license. A home is typically the most expensive asset one will purchase in life. And with family home ownership at 65%, buying a home is something most will eventually do.
A real estate license is one of those easy to attain degrees that offer payoffs throughout life! Whether one decides to own, rent, invest, or even become a salesperson, having a real estate license can be extremely valuable. Whether you use the knowledge as an owner, investor or advisor, there are few licenses that can generate so much for so little. Learning about real estate involves learning about valuation, negotiation, marketing, sales, economics and much more.
In most states, becoming a licensed real estate salesperson requires approximately 75 hours of course work (can do online) at the cost of a few hundred dollars. Achieve a score of 70%+ on a multiple-choice standardized exam, and you are done. The test cannot be taken online. Tests are typically a few hours at a proctored location.
If coursework and a standardized test seems a bit daunting, think again. Are you peppered with post cards from different brokers telling you about recently closed sales in your neighborhood? Does it seem like you know at least ten people who are in real estate? One reason is because it is so easy to get a license! Now that is much different from saying it is easy to make a living as a real estate broker.
We are not saying that at all. But you don’t have to do much for a license investment to pay off for you. And you certainly don’t have to be a professional real estate agent/broker for the license to have a meaningful value for you and your family.
Approximately 65% of Americans own a home. Buying a home is the largest investment that the vast majority of us will ever make, so it is worthwhile learning how buying and selling a home works. Whether you plan to buy, rent or invest, understanding the basics is critical. Below we outline just some of the obvious benefits:
- Understand the process of buying and selling a home.
- Learn different ways to value a home or investment property.
- Compare different types of mortgages.
- Prepare a home for sale.
- Take a slice of the sales commission, even if you aren’t acting as the primary broker on the deal. Yes, you can split the salesperson’s commission fee if you agree to that up front. Assume a purchase or sale where you negotiate a split with your broker. Home value of $600K, 6% commission. Your broker takes $18K (50% of the $36K commission). You split the salesperson’s fee of $9K and already your license has paid off.
- Refer a friend to a broker and split that sale or purchase commission.
- Identify home specifications relative to the comps that you can use to negotiate pricing.
