Whether you have dreams of being the next star of Million Dollar Listing, want to help family and friends sell their homes, or are just looking for some extra cash doing something a little different, becoming a part-time real estate agent is a great place to start.
Many agents successfully pursue real estate part-time, but how can you get started? We’ve put together a step-by-step guide that will take you from getting your real estate license all the way to the closing table.
A Super Quick Overview of How The Real Estate Business Works
Before we jump in up to our knees, let’s talk for a second about how the real estate business actually works.
In order to sell real estate, you must become either a real estate agent or a real estate broker. What’s the difference? An agent focuses primarily on selling real estate, while a broker focuses primarily on managing agents.
Brokers can still buy and sell, but most of their time is spent recruiting, supporting, and managing the agents within their brokerage. Think of brokers like the managers of a baseball team in the 1920s. Those guys were wearing uniforms, so technically they could play if they wanted to, but they were better at facilitating the other players’ success.
As a Realtor®, (the official title of members of NAR, the National Association of Realtors,) you work with buyers and sellers to facilitate their home buying or selling needs. In exchange for this work, you’re paid a commission on each sale you facilitate. There is no set commission, but typically, that rate is about 3% for a buyer’s agent and 3% for a seller’s agent.
From that 3%, you give a piece to your broker as a compulsory thank-you for allowing you to be a part of their brokerage, a chunk to Uncle Sam for taxes (you’re an independent contractor, so nobody is taking taxes out of what you make for you), and the rest goes to you as the agent of record.
With us so far? Awesome, we knew you were smart.
15 Steps to Becoming a Successful Part-Time Real Estate Agent
Now that we’re all on the same page about how the business works, let’s dive right in to what it takes to get you to your first official day as a part-time real estate agent.
1. Decide on a Brokerage
As mentioned before, you need a broker to work for. In the business, we often call this a “place to hang your license,” a saying derived from the practice of Realtors literally hanging a paper copy of their license on the wall of their office.
When deciding on a brokerage, your market will almost certainly have a LOT of options, but finding a place that is great for part-time real estate agents is key.
Major national brands like RE/MAX, Coldwell Banker, Keller Williams and the like offer a lot of benefits in terms of brand recognition, while smaller independent brokerages might have a particular connection to the community that is valuable.
Different brokers will offer you different options as far as your split (what percentage of your commission you pay to the broker every time you close a deal), your cap (the max amount you’d pay to the broker over the course of a year), desk fees (what, if any, monthly fees a broker charges to be a part of the organization) and the like.
For most part-time real estate agents, having a brokerage that doesn’t charge that much (if any) in the way of up front fees is key to success. Talk to a lot of brokers, compare and contrast their different offerings, and find something that works for you.
Brokers are almost always looking for new agents to join them (the more agents they have closing deals, the more commissions they get,) but be prepared to pitch yourself. Brokers want to make sure they are only bringing people on that represent their brand well, so dust off those interview skills, you’re gonna need them.
If you want some help deciding the best fit for you, check out our article on the Best Real Estate Companies to Work For.
2. Find Out and Complete Your Pre-Licensure Requirements
Most states require real estate agents to take some sort of class prior to sitting for their licensing exam. This class gives you a good idea of the sort of things you will see on the test itself, but also is a valuable tool for acquiring knowledge base necessary to being successful in this industry.
Since you are going to be a part-time real estate agent, usually the most convenient way to take this class is online. Our favorite spot for this sort of online learning is a website called Real Estate Express from McKissock. Select your state, choose your course, they make it super easy to get exactly what you need.
Different states have different requirements for pre-licensure. Real Estate Express’s home page has a drop down menu where you can select your state and get all the info on what you will need to do to get ready for the test.
3. Sit For (and Pass!) Your Real Estate License Exam
Okay, now that you’ve got your brokerage figured out, you just crushed your class with Real Estate Express, it’s time to put the rubber to the road and take the test.
There are usually a few different testing locations in each state, all of which you can find on your state’s website (normally in the area that deals with licensing and regulatory affairs.) If you’re having trouble figuring out where to go, your broker or whoever you did your pre-licensing class with can direct you to who you need to speak with.
Pro-Tip: Don’t skimp on the studying the Fair Housing material. It is an important topic that we should all know about, and we’ve heard from agents across the country who have taken the test in the last couple of years that there has been an emphasis on this area.
4. Join Your Local Board
Hey, before we go any further, congrats! By now, you have your official state license to buy and sell real estate. But, you aren’t quite over the finish line yet. First, you need to join your local MLS.
An MLS, or Multiple Listing Service, is the centralized service that all Realtors in your area use to list properties for sale, view statistics from previous sales, and gather information for their buyers about homes currently on the market.
Most MLS options will admit you as a member as long as you have an active license in your state, but they sometimes will also require you to sit through a class or attend some sort of training on their system before you have the green light to proceed.
Your broker will have all the information on how to join the board and their requirements.
You’re Licensed and Ready to Sell, Is That All You Need to Do?
Remember, the title to this article isn’t “How to Become a Real Estate Agent”, it is “How to Become a Successful Part-Time Real Estate Agent.”
Though you may be tempted to quit reading right now and just jump ahead to your dreams of real estate stardom, trust me, that would be a huge mistake.
The next couple of steps are all about doing this part-time.
5. Protect Your Full-Time Job and Decide What You Can Devote to Real Estate
Real estate, even as a part-time gig, can be quite demanding on your schedule, and if you aren’t careful, can eat up your entire day or week. Since you are pursuing this as a side hustle, it is best to start by getting a really good idea of what your time requirements are going to be at the job that pays the rent.
In fact, we go as far as suggesting that you tell your boss you are pursuing real estate part-time. They could be your first client!
Block off the time you are going to need to make sure you continue to succeed in your full time position; don’t let real estate seep in there.
Also, you need to make sure you can pay all your bills with this job. Real estate is a very lucrative field that you are going to do wonderfully in, but it is not an overnight success sort of profession.
Be prepared to work hard for a while without seeing a commission.
6. Pick Your Real Estate Schedule
A lot of people become part-time real estate agents because they want the flexibility of a second job that allows them to work when they want. We agree, this flexibility is awesome, but when you’re first starting out as a part-time real estate agent, you’ll do better by choosing a schedule and sticking to it.
Before you begin day one, get your calendar in front of you, take a look at the following four weeks. Block off the time you are spending at your full-time gig, then block off the time you are going to spend on real estate.
You know how you function best. Are you going to work in the evenings? Early mornings? Weekends? Set aside your best opportunities to be productive.
Remember, successful part-time real estate agents are ones that make themselves available when their clients need them. Nights and weekends are important for showing property, visiting open houses and getting deals done, so make sure to block out some of this prime time for real estate work.
Though we’d love to tell you that you can be successful with just a couple hours a week, when you’re starting out, this normally isn’t the case. We suggest devoting no less than 15 hours a week to real estate when you’re brand new.
How do you spend those 15 hours? Don’t worry, we’ll get to that.
7. Set Aside Some Intentional Non-Work Time
If this is your first time attempting a side hustle, you need to know, time gets to be a precious commodity. You are going to be excited about the progress and success you are making in real estate, but if you don’t take at least a little time each week to NOT work, eventually, your real estate pursuits will suffer because you are burning out.
This may seem silly, but it will help your real estate game in the long run: Choose some time each week when you aren’t allowed to work.
OK, You’ve Got The “Part-Time” Part Down, Now What About “Successful”?
Time to get down to brass tacks here. You’re licensed, you have your schedule all planned out. How do you make yourself not just a part-time real estate agent, but a successful part-time real estate agent?
When we hear the word “successful,” most of us are thinking of financial success. Are you making a profit as a part-time real estate agent? Will you make a reasonable return on the hours you are dedicating to it?
To help make sure the answer to these questions is a resounding YES, we’ve come up with some questions of our own that you need to answer, as well as a handy-dandy calculator you can use to see what sort of results you can expect.
8. What Are the Costs at the State Level for Maintaining Your Real Estate License?
Just like your driver’s license, your state will require you to periodically renew your real estate license. There is a cost to this. How often do you have to do this, and what is the cost per year? It varies quite a bit by state. For instance, in the state of California, a license renewal is $245. In the state of New York, the renewal fee is only $50.
9. What Are the Costs for Maintaining Membership in Your Local MLS?
Most MLSs have a yearly fee Realtors have to pay in order to maintain an active membership. Some even have a monthly access fee as well. How much will it cost to maintain access to this critical tool annually?
10. What Are Your Broker-Related Costs?
Ok, slow down and read this one carefully. This question isn’t asking you what your broker SPLIT on your commissions is, it is asking you what (if any) fees your broker is charging you to be a part of the organization, regardless of whether you are closing transactions? Hint: Most brokerages call these “desk fees.”
11. How Much Are You Going to Spend on Marketing and Lead Generation?
Success in real estate on any level has a lot to do with getting your name and services in front of the right people at the right time.
This involves marketing and lead generation, which come with a cost. As a part-time real estate agent, you don’t need to be thinking about a massive budget, but there is a critical mass.
We’d suggest an initial number somewhere between $150 and $300 per month.
For creative marketing ideas, we’ve got a great piece that is chock full of approaches to promote your new business. Give our article 21 Real Estate Marketing Strategies (Hint: None Are Facebook) a read, tell us what you think!
12. How Much Are Your Going to Set Aside for Operating Costs?
As a Realtor, you are essentially a small business owner (at the moment, very small). As such, you are responsible for your operating costs. You need to pay for things like yard signs, a refill on business cards when you run out, cups of coffee with prospective sellers.
Though this number is going to vary widely depending on your market and cost of living, we like to suggest starting at around $50 a month and seeing how that feels.
13. What is the Median Sales Price in the Area You Are Operating In?
This one’s easy. Head over to Zillow and check out their Neighborhood Home Values area.
Zillow tracks the sales of all the homes in your area, and gives you lots of valuable insight into the sales history and trends in a particular area.
What we really want to know is, what is the median sale price? When we know that median price, we can use it to get a good estimate on the sort of commission you can expect from each sale.
14. What is the Average Commission You Expect to Receive?
There is no salary for part-time real estate agents, this is a 100% commission based business.
We should stress here, there is no established or required real estate commission rate. You can observe the best practices of others, and you can look in the MLS and find out what most property listings include as a commission, but nobody can tell you how much you can charge a seller for commission.
For the purposes of your success, it is helpful to have an estimate. A total commission (for both buyer and seller agent) for a property is typically 5-6%, so we’d suggest estimating at 2.5%, just to be conservative. That means if you represent a buyer on a home in an area where the median price is $400,000, your gross commission on this sale is $10,000.
15. What is Your Split With Your Broker?
When you receive a commission, your broker is going to get a percentage of it. What is that percentage?
With some brokerages, this split is negotiated per office or even per agent. However, some brokerages like Keller Williams (the brand that took the top spot in our Best Real Estate Company to Work for in 2019 article) have a universal split. With Keller Williams, your split before cap is 64%. So, that transaction with the 2.5% commission on a $400,000 sale price from before? At Keller Williams, your pre-cap cut as an agent would total $6,400.
Part-time Real Estate Agent Success Calculator
OK, take the answers you came up with for questions 8-13 and plug them in below. Obviously, the more deals you close, the more profit you make!
Surviving Your First Month as a Part-time Real Estate Agent
Now begins the hardest and best part of being a successful part-time real estate agent: doing the work.
Often times your broker is going to have an onboarding plan that will launch you into hunting for your first transaction, but if they don’t (or maybe you just want something different), we’ve sketched out a brief roadmap on how you spend your time for each week for the first four weeks of your new real estate business.
In our plan, we’ve set aside 20 hours a week for real estate.
Week 1: Get Systems Set Up, Get The Word Out
- Set Up Your Systems (3 Hours): Set up all the systems you are going to use to tell people about your business. Set up a Facebook Page, create a little content, invite your friends to Like you. Set up a Zillow account and complete the profile so you can be searchable there. Set up the website that comes free (usually) with your brokerage so it has your information.
- Sphere of Influence (8 Hours): Reach out to as many people in your personal sphere as possible and let them know you are now a Realtor. Your personal sphere is going to be a major source of business for you as you are starting out, so make this a priority. Mix up your outreach depending on the audience.
Try handwritten cards, text messages, phone calls, Facebook messages, any form of communication that is going to get you talking with the people you know about your new venture. Let them know how excited you are to take on this new challenge, let them know you are ready to take on any real estate task they need help with.
Don’t forget: real estate isn’t just about selling homes, it is about selling YOURSELF to your potential clients. Don’t be afraid to ask (politely and graciously) for your friends’ and families’ business, you’ll be surprised how many people will respond positively.
Often times Realtors will turn to a CRM to help them manage their contacts and automate outreach to the right person, with the right message, at the right time. If you aren’t familiar with CRMs and what they have to offer, check out our article on the Best Real Estate CRMs for 2019.
- On The Job Learning (2 Hours): Set a coffee date with another Realtor and ask them all the questions you have been dying to ask someone who is working in your market today. In real estate, your competitors happen to be your colleagues, and as long as you aren’t asking someone to spill State secrets, most Realtors are happy to discuss strategy with a new agent.
- Market Familiarization (2 Hours): Spend time on the MLS, familiarize yourself with the market. If you can get some of your outreach conversations to real estate topics, often times you are going to be asked, “How’s the market right now?” Have an answer for them. Also, take some time and go to an open house or two. See what other Realtors are doing to market properties, borrow the best ideas.
- Remaining 5 Hours: These hours are reserved for the appointments you set and fruits of your labor that now require a little more time before you can harvest them. Agents who aren’t prepared to be successful miss a lot of opportunity. You will need time to show buyers homes, pitch potential sellers your services, write and respond to offers.
Week 2: Agents, Start Your (Marketing) Engines
- Sphere of Influence (3 Hours): Get back to your personal sphere and keep working it. Chances are you didn’t reach out to everyone last week, so pick up where you left off, and also follow up with another point of contact for anyone who expressed even a modicum of interest in your new venture. This would be a great time to dig into that CRM and start setting up regular follow ups with your most valuable contacts.
You are now a communication chameleon. If your contacts like to text, you text. If they want to talk on the phone, you talk. If they want to user messenger pigeons, go get some birds.
- Marketing Outreach (8 Hours): Start building your marketing effort with relevant content your audience is going to find useful and interesting. Use Facebook’s scheduling feature and schedule out content all week long. Write a blog post for your website about what’s happening in your real estate world.
Choose a geographic area and start working it (we call this “farming”.) Often times, the most successful farming campaigns start in an area you already have a connection. For instance, how about your own neighborhood?
Send a letter to every single person in your neighborhood, regardless of whether you know them personally or not and let them know there is a real estate expert living just down the street. If you need some help on writing these letters, we’ve got some great prospecting letter templates you can check out.
- On The Job Learning (2 Hours): Find someone else and take them out to lunch, learn another perspective on the business. Maybe someone in your office has a business you admire? Maybe your broker? If you really want to get some good info, find an admin person who has been in the industry for a while and pick their brain over soup and sandwiches.
- Market Familiarization (2 Hours): Make sure you are dedicating time every day to look at the MLS, follow what is happening in the local market. If one of your personal contacts happens to mention in jest that they would move if their “perfect house” ever hit the market, you need to know if that house becomes available.
- Remaining 5 Hours: Set appointments, reap what you sow. Save this time to meet face to face with potential clients. If you don’t have any meetings, use this time to keep reaching out.
Week 3: Go For Low Hanging Fruit
- Personal Sphere Outreach (2 Hours): By this time, your personal sphere has had a pretty good once through. Set aside 30 minutes a day to continue to do targeted outreach to people who seem like they may be interested now or in the future in your real estate offerings. Be on the lookout for personal contacts that could be good referral sources too.
- Marketing Outreach (8 Hours): Your marketing efforts outside your personal sphere are taking on a new dimension this week. Do what you know needs to happen to continue to build your brand (social media content for the week, a short blog post, etc), also hit another part of that farm area (maybe with a phone call this time?)
This week, when you are cruising the MLS, make note of the properties listings that have just expired. These are properties that didn’t sell for one reason or another, and sometimes these sellers are ready for a change in Realtor. Reach out to them and tell them why you can sell their home when another couldn’t.
As you are adding new dimensions to this outreach, you may find yourself short on time. Some CRMs offer automation on marketing that allow you to set a plan an forget. We really like Ixact Contact’s Social Stream feature for working with our Facebook Feed to get good stuff there without a lot of time and effort from us.
- On The Job Learning (1 Hour): Stop by the most successful agent in the firm’s office and strike up a conversation. Ask good questions, learn from them. This sort of activity gets you good insight into how they’ve become successful, but it also puts you on that agent’s radar as someone who they could work with one day.
- Market Familiarization (2 Hours): Back again on the MLS and out in the field to make sure you are up to date on everything happening in your local market.
- Paid Lead Options (2 Hours): Spend some time researching different options for buying real estate leads. Zillow Premier Agent is often the most talked about in this space. Though budgets on this sort of effort can range from just a few bucks a month all the way up to $100,000 per month (or more!), we suggest you start with a budget around $150. If you want more suggestions, we’ve written a helpful guide on the 5 Smart Ways to Buy Real Estate Leads.
- Remaining 5 Hours: Get those appointments, work those leads. This is the time you’ve set aside to convert maybe into yes.
Week 4: Get Out of Your Comfort Zone
- Personal Sphere Outreach (2 Hours): Pick a couple people each day to interact with. Just that interaction brings you top of mind with this person.
- Marketing Outreach (8 Hours): Cement the good habits you’ve already established. Create a week’s worth of Facebook content, a short blog for the website, maybe hit your farm area with some of the latest market stats for your neighborhood.
Send a handwritten letter to each expired listing in the MLS.
The final piece of the puzzle is spending some time looking for properties that are For Sale By Owner and directing outreach to them. They’ve already decided they want to sell, it is just up to you to convince them to do it with you. Why not knock on their door and strike up a conversation?
If you are looking for a centralized place to find Expired Listings and FSBOs, there are some pretty nifty services out there that aggregate that data for you. One that we’ve reviewed before is called REDX, which makes it easy to contact new leads.
- Paid Lead Launch (2 Hours): Take what you learned last week about your paid lead options and send a campaign live. If you’re doing it right, you should set aside time to deal with the incoming lead traffic. Remember, the leads are no good if you don’t follow up, so make time to do so. According to Zillow, more than 70% of leads will go with the first agent they talk to, so being available to pick up the phone makes a big difference.
- Market Familiarization (2 Hours): Take time to make sure you know the ins and outs of the market this week. Why not take this a step further by looking for a recent sale in a neighborhood where one of your personal contacts lives so you can discuss with them on your next call? This is a great conversation starter about home values and can spur conversation around a listing.
- Take a Mortgage Lender to Lunch (1 Hour): You’d be surprised how many leads you can get from a mortgage lender. Start with the bank you personally do business with and find someone you connect with and talk about how you can mutually support each other’s business.
- Remaining 5 Hours: All your hard work is paying off, by now, these 5 hours are full of listing appointments and buyer showings.
Some Final Words of Encouragement For Part-time Real Estate Agents
If you’ve made it this far, you’ve given yourself every opportunity to succeed in this exciting new adventure, congrats!
Real estate can be an extremely rewarding career, and the life of a part-time real estate agent is exciting and varied with lots of opportunity for success.
If you find yourself getting discouraged here and there, focus on the number of transactions you need to be successful, not on the number of callbacks you are getting.
And, when you get your first closing, make sure you take yourself out to celebrate, you are now an experienced successful part-time real estate agent.
We’d love to hear from you on what is drawing you to the real estate field, and where you are coming from. Are you currently a part-time realtor? How is your experience so far?