Rock Star Realtors on What It Takes to Become a Real Estate Agent

By Anthony de Freitas | Wednesday, 08 December 2021 | Feature, Real Estate

The US real estate market in 2021 is as vibrant and dynamic as it ever was. It’s on track to hit revenues of $1.2 trillion in 2021, with almost half of that sum ($571.4 billion) profit for industry participants.

Movers and Shakers of the Real Estate Universe

Real estate brokers and agents play a pivotal role in this economic sector. Across the board, from new residential construction to resales, agents are the facilitators and market makers that power this giant industry. It takes a veritable army of them to do that. At the end of October 2021, the National Association of Realtors (NAR) had about 1.56 million members on its books.

This feature surveys the industry, including what it takes to join and insights from three top agents: Tiffany Pantozzi, Glennda Baker, and Rachel Adams Lee.

How Do I Become a Real Estate Agent?

Becoming a licensed real estate agent is a cinch. The basic steps are attending a pre-licensing course, writing the licensing exam, and joining a brokerage. But, as might be expected, there are many devils in the details. State authorities grant licenses, and requirements differ from state to state.

In most states, an applicant has to be at least 18 years of age, but in Alabama, Alaska, and Nebraska, you must be 19 or older, and in Illinois, you have to be at least 21 years old. Typically, you will need to have a high school diploma or have passed the General Educational Development (GED) tests. Additionally, you will be subject to a background check. Having a criminal record is likely to be a disqualifier.

See How to Become a Real Estate Agent for more information.

Pre-Licensing Course

A pre-licensing course will generally cover three main areas: real estate principles, real estate practice, and real estate law.

The principles portion includes the listing and selling process, property valuation, closing the sale, escrow procedure, taxes, and financing. Other topics covered under principles are land descriptions and subdivisions, how to acquire and transfer real property, liens and encumbrances, and leases.

Real estate practice covers, among other things, running an agency, pricing and listing properties, and prospecting. The legal aspects of real estate in such courses are mostly contract, agency, and compliance law. In some states, financial topics are also included. Some pre-licensing courses, as in New York, may include a final exam, not to be confused with the actual state exam. More on the hours and costs of pre-licensing courses are below.

Exams, Licensing, and Sponsorship

After that, it’s time to take the examination. In some states, you will need to be sponsored by a broker in order to take the exam, which is a pass/fail test that can vary from 90 minutes to 225 minutes. The exam is divided into a federal section and one devoted to the specific state. You must score at least 70% to pass, although, typically, the actual score is not made available. Applying for a license is the next step. At this point, if you don’t already have a broker sponsor, you’ll need to get one. State laws require a real estate agent to work under the auspices of a broker.

See How to Become a Real Estate Agent for more information.

Joining a Brokerage

Signing up with a broker is an exciting time. You’re getting very close to the point of bringing in the big bucks. As a result, your focus is on the commission split. A bigger share for you may seem better, but as in economics, there is no such thing as a free lunch. Everything has an opportunity cost.

A bigger split for you may mean higher desk fees and MLS access costs. Besides, getting the business comes first. Focus on finding a brokerage that will provide support in various forms to help you win business. The commission split only works if there is a commission to split. To paraphrase Suze Orman, 50% of something is better than 100% of nothing.

For a new agent, partnering with the right broker can make the difference between success and failure. In those early days, support and training that guides you through the sales process from start to finish can instill the confidence and perseverance required for winning business.

A culture conducive to bringing out the best in you, as well as healthy relationships with colleagues, are also advantages that may be less obvious. They are, nevertheless, a robust foundation for building a solid real estate business. Perhaps, the broker may offer a mentor program.

The support from management and back-office staff is also crucial, as are the technology and facilities available. In today’s connected world, internet access and presence are vital. More is being done through the internet than ever before. Your broker’s website must be informative and appealing. It should also have a high SEO ranking. To the extent you and your brokerage rely on the internet for prospects, that will be important.

Desk Fees and Commission Split

How much you make depends primarily on the number and value of the deals you close. That paycheck also depends on the revenue and cost structure of your contract with your brokerage. This contract determines not just how much you are paid but how much your brokerage makes. It will set out, first, how commissions are split between you and the brokerage, and second, any desk fees.

Desk fees are the charges for the infrastructure and facilities, such as office space, technology, and marketing support, the brokerage provides. In general, there is a tradeoff between the brokerage’s share of commission and the amount of desk fees. The smaller the percentage of commission going to the brokerage, the more the desk fees are likely to be.

Real Estate Agent, Broker, or Realtor?

There are three terms you have to get used to. Although they may be used interchangeably by the public, they’re completely different from a professional standpoint.

A real estate agent is licensed to act for those buying, selling, or renting housing and real property of various kinds. An agent must work under the control of a broker.

A broker is a licensed real estate professional whose training goes beyond that given to agents. State laws require an agent to have not only further specialized training but more experience, typically three years as a licensed real estate agent. A broker’s license allows a real estate professional to work independently. They can set up their own shop.

If they do, they become a principal or designated broker, with authority to hire agents and the responsibility to ensure they operate in compliance with state and national real estate laws. A principal broker can manage the office themselves, which makes them a managing broker, or they may hire someone else to manage the office and agents. A brokerage may also have associate brokers: licensed brokers who work under a principal or managing broker.

The designation “Realtor” is a term trademarked by the National Association of Realtors (NAR), meant to apply only to real estate professionals who are members of the association. However, it is sometimes used to describe any real estate agent or broker.

Multiple Listing Service

As a real estate agent, you’ll have to become familiar with the Multiple Listing Service of your particular area. A multiple listing service (MLS) is typically hosted by an association of brokers. New York's Statewide Multiple Listing Service (NYSMLS) is one such service.

The NYSMLS provides access to listings throughout the state of New York and further. By virtue of its membership in the My State MLS network, any listing on the NYSMLS can be viewed through another state MLS. Access to an MLS typically costs between $20 and $50 a month. The NYSMLS costs $40 a month or $330 a year.

Ten Major Multiple Listing Services (MLS)

A comprehensive list of MLS in the US shows that there are close to 600 MLS in operation.

How Much Does It Cost to Be a Real Estate Agent?

There are two sets of costs you’ll have to bear if you want to join the ranks of real estate professionals. First are the costs of becoming an agent. Going from real estate neophyte to licensed professional will set you back a few dollars for a number of essentials. Second are the costs of being an agent, which can also add up.

Some Costs of Attaining Licensed Status for Real Estate Agents

The journey to status as a licensed real estate agent begins with the pre-licensing course. The course varies from state to state, not just in the curriculum but in the number of mandated hours and cost. The curriculum or course content will range over federal real estate requirements, as well as those pertaining to the specific state. The courses in some states will end with a test administered by the educators that conducted the pre-licensing course.

This test is different from the official real estate sales agent exam recognized by the state for licensing purposes. In other states, there is no end-of-course test. Consequently, it is not surprising to find that pre-licensing courses typically have a certain number of mandated hours. In Alaska, Massachusetts, Michigan, New Hampshire, and Vermont, it is 40 hours. In Oregon, it is 150 hours, in Colorado 168 hours, and in Texas 180 hours.

Naturally, costs vary as well. You can get the 63-hour pre-licensing course in Florida for $119, while the 116-hour course in South Dakota could set you back $1,000 and the 120-hour course in Ohio could cost $1,425.

Other startup costs include the fees for examination entry, fingerprinting and the license itself. In the notoriously high-cost state of New York, the fee for taking the written exam is just $15. In California, it is $60. That being said, fingerprinting can cost up to $95 in New York, and in California, the license application fee is a hefty $245.

Real estate license terms vary, but in most states (33), they are biennial (two-year). However, in seven states, including Pennsylvania, licenses are valid for just one year. Terms are for much longer in the other states. Eight states have triennial (three-year) licenses, while California and Georgia have quadrennial (four-year) licenses.

Post-License Costs for Real Estate Agents

The spending doesn’t stop when you get your license. Maintaining your status and operating capacity as a licensed professional will entail an array of expenses. These include:

• Desk fees
• Membership fees to the local real estate board
• Multiple Listing Service (MLS) fees
• Charges for a continuing education course
• License renewal fee
• Business expenses, such as marketing your services, insurance, and travel expenses

Not every state imposes a mandatory requirement for real estate agents to have errors and omissions insurance, but it’s a good thing to have. Errors and omissions insurance, a type of professional liability insurance, covers claims for inadequate work or negligent actions, in case, for example, you forget to do something. Coverage may include both adjudication and settlement costs.

There couldn’t be a better time than now to become a real estate agent. Although the real estate market has slowed from the frenzied activity of the second half of 2020, it appears to be on the uptick again.

In September 2021, sales of existing homes rose 7% to a seasonally adjusted annualized rate of 6.29 million unit, according to the National Association of Realtors. In October, they rose again, albeit rather more incrementally, to 6.34 million units, a 0.8% increase. In addition, 745,000 new houses were sold in October, according to Census Bureau data.

Partly because of the increased demand, a shortage of inventory has developed. According to a CNBC report, 1.27 million existing residential units were available for sale at the end of September 2021, representing around two months of sales, a decline of 13% from the previous year. Accordingly, it’s a seller’s market, and, true to basic economic laws, prices have been going up. For September 2021, the median price of existing homes rose to $352,800, which was 13.3% higher than September 2020.

Real Estate Hotspots

Although there has been some cooling off in the residential real estate market compared to activity last year. In 2021, demand continues to outstrip supply in several states. Nationwide, between January and August 2021, the average monthly share of homes sold above their list price was 46%. 51% of listed homes were sold within two weeks of listing. And based on average sales, supply for the period was 1.57 months.

For the prospective buyer, the ten most competitive states in 2021 are California, Colorado, Nebraska, New Hampshire, New Jersey, New York, Oregon, Vermont, Washington, and Utah.

California Real Estate Market

The California real estate market has had a hot summer, with prices on the rise. In August 2021, the median house price rose to $827,940 — its highest ever, before falling back to $808,890 in September. The September median price was 13.5% more than last September's $712,430, according to the California Association of Realtors (CAR), an elevated price level that was driven by strong demand.

The same month over 62% of homes on the market were sold above listed price. Buyer interest remains at a high level. Currently, it takes less than two weeks for a California single-family home to be sold.

Paradoxically, despite the high level of demand, 2021 sales were less than the year before. This was due to a shortfall in supply. In September 2021, sales were 10.5% lower than the year before, when 489,590 houses were sold. However, the rise in prices should bring the market into balance by boosting the quantity supplied and curtailing the quantity demanded. 

California is the home state to Realtor Rachel Adams Lee, owner of the Rachel Adams Lee Group at Keller Williams Realty. Rachel is currently ranked in the 99th percentile of all Realtors in Placer and Sacramento counties. That means that in those markets, she’s sold more homes than 99% of real estate agents. For 2020, the production figure for her team was over 70 million. It’s no surprise then that for the five-year period 2014-2018, Rachel’s name has appeared on The Wall Street Journal’s list of the Top 1000 Agents in the country.

Rachel also shares her viewpoint on what it takes to succeed in social media marketing in another venture: Level Up Coaching. She took time out from her busy schedule to relate her climb up the ladder of real estate success and share a few things she’s learned over the years.

“I got licensed in 2012 after managing a real estate office unlicensed and seeing the agent making way more money than I was. I wanted a bigger life. Bigger goals. More excitement. I wanted to stop living paycheck to paycheck. I started as a licensed Realtor on January 26, 2012, and despite a lot of cold calling didn’t sell any homes the first four months. However, I was still able to sell 34 homes that first year and 109 the year after. By my third year, I had hit the top 1000 agents in the US and still have that designation today.”

Should a new agent join a team or go solo?

“It depends on the agent's goals. If you join a team, it should be because you want training and accountability and are willing to be coached. If you go solo, you must be self-motivated, willing to pour yourself into all the training your office provides, and get used to a lot of rejection.”

How should a new agent go about choosing the “right” brokerage?

“Interview. Interview. Interview. Make a list of the right questions to ask. They must have regular training and an in-house broker so you can get counsel if needed. Date before you marry. Attend a team meeting and see how you feel. Go with your gut.”

What form did your prospecting take in the beginning?

It involved lots of cold calling. On average, in the beginning, I knocked on 200 doors and did three open houses a week. Now I really focus on social media, and last year got 131 referrals from Facebook, Instagram, and YouTube. I am super passionate about adding value every day to my community and clients, and other agents around the country. I have an amazing coaching course to teach other Realtors how to blow up their business by referrals through social media. Check it out at Hello Social Discount code — RACHELS_CREW.

What was the biggest challenge you faced to gain traction?

“Rejection and embracing it. It’s hard being told ‘no’ so many times. Every ‘no’ got me closer to a ‘yes.’ Consistency and a strong mindset is what got me where I am today.”

What personal attribute(s) you possess helped the most to achieve success?

“My ‘why’ was bigger than any excuse I could come up with. I wanted to live a “life by design. To me, that means doing what I want, when I want, with who I want. I was willing to time-block, be consistent, edit my peer group, face daily rejection, be intentional in my conversations, master scripts, and never give up.”

What changes do you expect in the industry over the next year?

“I think we will still be fighting low inventory, but I see that as a challenge. It’s up to us to find the inventory. I see many Realtors leaving the industry because of unrealistic expectations of this career. It’s not easy. It’s hard work. But it can be so amazing.”

Florida Real Estate Market

Despite the pandemic, or maybe because of it, the Florida residential real estate market experienced a boom in 2020. This growth has been attributed mainly to demand from out-of-staters, particularly those fleeing cramped conditions in the North-East. But it may also have been driven by the migration of tech and finance companies from higher-cost locations, such as California and New York.

Those looking for affordable housing gravitate to North Florida, where house prices are a great deal lower than in the south. The median value of a home in Jacksonville, which happens to be the most populous city in Florida, is $158,300, for example. In the state capital, Tallahassee, the median value is $167,300, while in Pensacola, it is just $137,000.

The prices are a good bit higher in South Florida. In Miami, for instance, the median value of a home is $306,500. Moreover, the southern part of the state is where you’re most likely to find pockets of the luxury market. But big-ticket properties span the entire state.

A good example is Shaquille O’Neal’s Windermere mansion, which in October 2021 sold for $11 million. The property, which Mr. O’Neal purchased in 1993 for $3.95 million, was put on the market in 2018 and so took three years to sell.

Now, problems like that are water under the bridge. The luxury market landscape has changed. In addition to well-heeled buyers from the north, there has been an influx of international buyers. From August 2020 to July 2021, foreign buyers spent $12.3 billion on home purchases in the state. The year before, even as the pandemic raged, they spent even more: $15.8 billion. According to the National Association of Realtors, one-fifth of all international property sales in the US took place in Florida.

Current market activity reflects that elevated level. Transactions of big-ticket items are grabbing the headlines. They’re also going faster. In early November 2021, a Highland Beach mansion changed hands — for the second time in seven months — at a price tag of $30.25 million; that is $8.7 million more than its value at the start of 2021.

The Florida luxury market is the happy hunting ground of super successful real estate professional Tiffany Pantozzi and her agency Align Real Estate. Tiffany is a $20 million a year producer in Central Florida with a history of celebrity engagements. She’s a former cheerleader for the Miami Dolphins.

“I was born and raised in Miami, Florida, where I danced professionally for the Miami Dolphins and earned my Bachelor's Degree in Marketing & Advertising from Miami International University of Art and Design. Through my love of fashion, marketing, and professional sports, I created a nationally recognized collegiate and professionally licensed sports apparel company and operated it successfully before selling it in 2015.

After selling my apparel company, my family pushed me to become an agent since they were all in the real estate industry. I was never truly impressed by the real estate agent profession and was determined to elevate what it meant to be an agent if I was going to choose this career path.

I wanted to be different and be recognized as a luxury agent through social media, which very few people were doing at the time. Instagram was the most widely used app back then, and I would reach out to luxury agents to collaborate and help them with their open houses. The first luxury property I sold was in Disney's Golden Oak Resort. I came in as the fifth listing agent on this property, and with a focused creative sales and marketing approach, I sold this property within three months on the market at 95% of the list price.”

On joining a team or going solo

Tiffany believes that new agents can benefit from joining a team. “They should look for a team that has the mindset of collaboration over competition. I also highly recommend very green agents to find a seasoned Realtor who is willing to mentor them. I have allowed agents to shadow me and even work under me as an assistant, and in return, it has helped me foster great relationships with other talented up-and-coming agents.”

How to choose the ‘right’ brokerage

“The right brokerage will be different for every person. It depends on what your goals are and who you work best with. For example, some brokerages feed people leads but take a 60% split, some brokerages offer in-depth training, and some provide innovative marketing/technology to power your business. New agents should research and interview the companies they are most interested in to see the value proposition of each brokerage.”

What form did your prospecting take in the beginning?

“I started to promote my real estate business through Instagram back in 2015. At the time, most agents did not think social media would be as big in the real estate industry as it is today. Sharing my daily adventures in real estate and cinematic luxury listing tours helped me attract a large following, resulting in tons of referral business from other agents.

I'm not your cookie-cutter Realtor. I take immense pride in running my business differently and being bold in my branding and marketing. I invest in my marketing more than the average agent, and it has helped me stand out amongst other Realtors. There are laws to obey and rules to follow as a real estate agent, but there's also plenty of room to run your business as you like.”

On gaining and maintaining traction

“Growing at a rapid pace and keeping up with my business demands was an obstacle that I did not expect when I started my real estate career. I quickly realized that to keep myself afloat — I had to delegate tasks to specialists and hire the right people so that I could focus on providing my clients the best service while still being able to scale my business.”

What personal attribute(s) you possess helped the most to achieve success?

“The experience and work ethic that I gained from owning my own apparel company was vital to my success. I have a Type D personality with immense drive, ambition, and discipline in anything I set my mind to achieve. I never let a good opportunity go to waste and do whatever it takes to get the best outcome for my clients.

I also love nurturing my relationships and fully believe that your network is your net worth. Therefore, I prioritize networking with other agents, entrepreneurs, developers, and other real estate professionals.

Through my innovative social media marketing and branding strategies, I've been able to thrive in a competitive industry. I built my reputation quickly as one of the most recognized top-performing real estate agents in Florida, representing some of the top luxury listings and high-profile clientele. My expertise has allowed me to create bold campaigns that are fresh, original, engaging, and generate an international reach of millions.”

Industry Outlook

“Many agents are starting to invest more time and effort into their social media and video marketing, and I don't see that stopping anytime soon. We are able to connect with people around the world at the click of a button, and if you are not leveraging that, you will be left behind. With the advancement of technology, there will continue to be more comfort in virtual transactions, with the buyer never stepping foot inside the property or meeting their real estate agent. Technology is key in today's market and having the ability to offer more resources to create a more elevated digital experience is key to success.”

Georgia Real Estate Market

The real estate market in the state of Georgia is just as vibrant as in the rest of the nation. In October 2021, the median home price in Atlanta, the state’s largest market, was $389,000 — 11% higher than the year before, according to real estate brokerage Redfin.

The price rise appears to be the result of both demand and supply factors. Demand has risen in the past year. This October, it took just 24 days on average for a sale to go through, compared to 32 days last year. Those buyers who held off last year due to pandemic uncertainty have resumed house-hunting. Despite buyer interest, fewer homes went to contract this year, compared to last year. In October this year, 1,354 homes were sold, down from 1,496 last year.

Georgia is home to Glennda Baker, winner of the Atlanta Realtors Association Captain of the Industry Award and a lifetime member of the Million Dollar Club. Glennda has also been recognized by Zillow and was a founding member of the Zillow Agent Advisory Board, an exclusive group of 20 agents in the United States. Before taking up a career in real estate, Glennda designed and manufactured women’s clothing. She now heads the Glennda Baker & Associates Real Estate.

“My mom encouraged me to get into real estate since I had always been good at sales. With a background in retail, I loved to help people find the needle in the haystack. When I started, it seemed it would be as easy to sell big houses as small houses, so I just applied what I was learning to houses across the board. As I became more proficient at the process I focused my efforts across the board. That way, if one segment of the market went down, it was easier to pivot and focus on a different price range.”

Should a new agent join a team or go solo?

“I think a team provides an amazing foundation for a new agent. If you are considering going solo, you need to make sure that you are very disciplined and self-motivated. Real estate is optional, and if you are not careful, you can slip into the abyss.”

How should a new agent go about choosing the ‘right’ brokerage?

“The most important thing is culture and leadership. Being with a brokerage that is like-minded and an extension of your brand or the vision for the brand you are creating is critical.”

What form did your prospecting take in the beginning?

“Farming — I picked three high-end neighborhoods and started farming those neighborhoods right off the bat. Sending a newsletter, neighborhood updates, and being present in the neighborhood even though I didn’t live there. I strolled my baby through the neighborhood and became a familiar face.

I did. When I started in 1992 … way before social media, I read a book and it said to call everyone you knew, tell them you are a real estate agent that they could buy or sell. Five of the people from my SOI listed with me. The best place to start when you are a new agent is with the people that already know, like, and trust you.”

What was the biggest challenge you faced to gain traction?

“That there is a lot of noise. It is difficult to set yourself apart from everyone else.”

What personal attribute(s) you possess helped the most to achieve success?

“Persistence, work ethic, discipline, and curiosity.”

What changes do you expect in the industry over the next year?

“I anticipate that the mediocrity of the industry will become more and more extinct. Real estate agents will fall into two categories: the online box agents that offer a reduced offering and the best of the best will move into a more valuable consulting space.“

To learn more, check out this comprehensive guide on how to become a real estate agent.

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