An unfiltered truth about getting into real estate in Illinois today
I am told all too often that professional Realtors make our jobs look glamorous and easy. With no surprise, I am approached regularly by people who are interested in joining the profession. After 6 years in business, becoming a pre-license and continuing education instructor, and a Coldwell Banker mentor, it’s time. Here are my thoughts when someone approaches me asking about getting into the business.
I will start off by saying a career in real estate is amazing. I wake up every day loving my job. The appeal of this career is no earning cap, minimal education requirements to start, and schedule flexibility. I never miss my kids’ games, I am able to stay home with them when they are sick, and I make pretty good money. With that being said, if it were easy, every person in America would have a real estate license.
The Education
Let’s start with the basics. In Illinois, here is the current criteria to get your real estate license:
75 Hours of Pre-License Training
Pass State Exam
Pass National Exam
Be at least 18 years old
Have a High School Diploma or GED
That criteria doesn’t seem too bad compared to the potential earning possibilities of this career.
Real Estate school teaches students legalities and how to not get sued. They teach you nothing about how to get clients, how to sell a house, how to host an open house, how to show a house, none of that. Most people go into real estate school thinking they will know everything once they finish the class. That is far from the truth. You need to think about real estate school as your first step towards your real estate journey, not the finish line.
The state and national tests are extremely hard. I know very few people who pass them on their first attempt. I actually thought the testing facility messed up and gave me the wrong test. It was that hard! I do think the right pre-license course can prepare you better for the test, but I took a home study course that was not best at preparing me.
In addition to the pre-license course you will need to do continuing education every 2 years that you hold a license. License laws changed regularly. Currently in Illinois, you are required to take 12 hours of CE every 2 years. That breaks down to 4 hours of core & 8 hours of electives. If you don’t enjoy learning, real estate is definitely not for you. You will have to take education courses for your entire career in real estate.
The Cost
Now that we understand the education portion, let’s move on to the expenses of the career. Once you pass your test, you move on to finding a brokerage to hang your license. In Illinois, you are required to work under a brokerage for 2 years before you can start your own brokerage. You will have to begin your career working for someone else. Almost any brokerage will let you hang your license with them. It is important to remember you are interviewing them to see if they would be a good fit for you and your real estate goals, not vice versa. Most brokerages start new agents off at a 50/50 split. Right off the bat, you will be giving up half or your paycheck to your brokerage. Some brokerages charge desk fees. This is a fee they charge the agent every month to hang their license and provide them with an office. Desk fees are due whether you sell a house or not. Most people interested in real estate don’t realize this. It is extremely expensive to be an agent.
To get your license active, you can expect to pay around $3000 for classes, testing, and initial fees. Once you get your license, it costs about $2000 per year just to keep your license active. This is the main reason why new agents fizzle out. I am always transparent upfront about the costs. I know very few careers where you are charged thousands of dollars just to continue working.
The Marketing
You’ve completed the course, passed your tests, chosen a brokerage. Now what? You probably expect your phone to be ringing off the hook. You’re an official hot shot realtor now! Spoiler alert, that’s not what happens. The average time it takes to get your first client is about 6 months after you get your license. You’ve invested all this money and time and now you’re just sitting around waiting for clients to fall into your lap, but it doesn’t happen. Every single new agent feels this way and experiences this.
Your job now is to market yourself and convince the public to work with you. If you’re lucky enough to wind up at a brokerage with a mentoring program, this will help immensely. Mentoring programs teach you what real estate school doesn’t. They teach you how to use the resources, how to conduct yourself with clients, and how to attract clients. Mentoring programs can be one of the best things to help you learn the real estate business.
You are the only person responsible for getting yourself clients. Brokerages are not guaranteed to give you any business. If you are lucky, your brokerage may recognize your hard work and reward you with a lead. Leads are never guaranteed paychecks. It’s a chance to earn someone’s business. If you do a good job, it may lead to a paycheck. But you are investing all of your time, energy, and gas into this client hoping it does.
The most successful agents I know spend hundreds of dollars per month marketing themselves and trying to find new clients. As a new agent, that might not be feasible but you will have to get creative and spend energy and creativity to market yourself. The battle for new clients never stops. You will continue to market yourself for your entire real estate career.
The Pay
Real Estate agents are independent contractors. This means every dollar we bring into the company is given to the brokerage, split, then our portion goes to us. There won’t be taxes taken out of your check. You are responsible for setting aside money for that.
As I previously mentioned, new agents start out at a very low split, normally 50/50. Once you are able to prove yourself as an agent, you have the opportunity to increase your pay structure but it’s a marathon to get there.
As Realtors, we spend a lot of time and money on clients that pan out to be nothing. We are only paid when we close houses. If a deal falls apart, all that time, energy, money and gas, is all lost. When people ask about my pay I typically tell them this “I do a lot of work for free, but I am compensated well when I do get paid”. That is the simplest way to put it. As an agent, we are doing so much work for free, but it pays off once you’re able to get closed clients.
Getting your first client is always the hardest part of becoming an agent. Once you’re able to get one closed, you’ll appreciate the hard work put in to get there.
The Conclusion
This has been a very brief blog about what it’s like to get into real estate today in Illinois. I don’t sugar coat the truth. This is a hard job, but it is so rewarding once you’re able to establish yourself as an agent. If you’re reading this thinking you have additional questions, just hit the contact me button and I’ll answer anything I can.
-XO Dana
