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How to Become a Real Estate Agent

What do I have to do to become a real estate agent in North Carolina? First, you must obtain a real estate license in North Carolina. To obtain a license, you must enroll in and successfully complete an approved course of study through a licensed real estate school. There are courses available through the Mingle School of Real Estate, the official school of the Charlotte Regional Realtor® Association. The first course you will take is called "Fundamentals of Real Estate." There is an exam at the end of the course. You must pass the school exam in order to be certified to sit for the state salesman licensing exam.

What does the course teach?
The 67 hour course of study covers real estate licensing law, finance, types of real property ownership, contracts and leases, agency law, taxation & math, transfer of title, land use controls, real estate brokerage practices, basic contract law, sales contracts, environmental issues, landlord/tenant issues, real estate management, closing the real estate transaction, real property valuation, basic residential construction, fair housing & ethical practices, property insurance, etc. While the course itself covers all of these areas, the student is responsible for all the information contained in the textbook and student syllabus, some of which is not specifically covered in classroom discussion. There is considerable study and reading outside of classroom work required.

When is the course taught?
Mingle School of Real Estate offers different schedules for the Salesman Fundamentals course. There are accelerated day and weekend programs as well as weeknight and weekday programs. Because the accelerated courses compress a great deal of complex information into just a few weeks, it is recommended that the student who has other responsibilities not enroll in the accelerated schedules.

Who teaches the course?
Instructors must be approved by the Real Estate Commission and must demonstrate real estate experience and a minimum number of real estate education hours. Mingle's instructors are highly trained and constantly striving to improve their teaching skills. Mingle's faculty consists of permanent and guest instructors. Many hold the prestigious designation, Distinguished Real Estate Instructor (DREI.) Only about 110 instructors hold this designation worldwide.

What help is available to prepare for the exam besides the actual course?
Mingle offers a live review at the completion of each schedule or a student may choose to purchase an on-line review. Mingle also offers a tutoring service.

How will I know if I passed the exam?
If taken by the paper/pencil method, exam results are mailed to candidates approximately ten days after the exam, which is given monthly. A successful candidate may then affiliate with a broker and begin to practice real estate. If taken by the computer method, you will receive results immediately following your computer exam.

Is there a different license for commercial and residential real estate?
No. In North Carolina, there is only one real estate license. There are certain activities pertaining to real estate practice which require a license to perform. It is critical that a licensee be familiar with these activities and perform them only when he/she holds an active real estate license.

How do I activate the license?
Your broker in charge will complete a form which notifies the Real Estate Commission that you are being supervised by him/her. This form also serves to activate your license.

Is the license good forever?
No. A real estate license must be renewed annually, by July 1. At the second renewal, the licensee must take eight hours of approved continuing education in order to renew the license on active status. Failure to obtain the CE hours will result in a renewed license being placed on inactive status. The licensee may not do anything which requires a real estate license while on inactive status. Procedures for reinstating and re-activating the license are available from the Commission. Any deficiencies in CE hours must be corrected before the inactive license can be activated. The number of CE hours required will vary according to each licensee's situation. You should consult the Commission staff for accurate information on reinstatement of an inactive license. CE courses are offered from July 1 through June 10 each licensing year.

How do I find a broker with whom to work?
Research the local market and learn about the various firms. There are large and small firms, some with many branch offices, and some with just one office. Some have highly structured training programs for new agents and some operate on a more informal, learn-as-you-go basis. There are firms which operate as buyer brokerage firms only and others which provide full service brokerage. A practical plan might be to contact the sales managers of at least three firms, preferably representing a variety of size firms, and ask about the training and support for new agents available.

What are commission splits and what will a new agent make?
The "splits," as they are commonly called, are the percentages of revenue earned from a sale and paid to the firm representing the buyer or seller. The firm establishes how this revenue will be shared with the agents and there may be a variety of options available to the agents in a single company. Often, splits are higher where fewer services are provided by the firm. Top producing agents generally earn a higher percentage of the revenue generated by their efforts. Some, so-called, 100% arrangements pay a majority of the commission to the agent, and charge back fees for items like franchise fees, desk and office space, office supplies, advertising, lockboxes for listings, etc. It is important to calculate the net earnings of various plans to arrive at a true comparison. For a newer agent, a lower split with a company which provides full services, comprehensive training and support may actually be a better value.

Is it true you need six months worth of income to start in the business?
This is a widely quoted "rule of thumb," due to the lead time required to get established and begin listing and selling real estate. One of the most common causes of agent "fall-out," is under-capitalization, that is, starting without a sufficient reserve to pay normal living expenses before sales commission income begins. A real estate career is an entrepreneurial venture, requiring individual discipline, motivation and a business plan, just as any other business a person might start.

What skills and characteristics are important for success?
A desire for success, a willingness to work hard, and a healthy self-esteem. Real estate, especially residential real estate, is a relationship-building business. The successful "top producer" builds his/her business on repeat and referral business. It is a contact-intensive business. Generally speaking, the successful real estate professional has a sincere desire to consult with people in what is usually the largest purchase or sale they make, a home. It requires problem-solving skills, excellent communication skills and an even temperament. Buying or selling a home is a stressful event in a person's life; the individual with "a short fuse" will probably have difficulty weathering the high's and low's of the business.

A good business sense is also important. An agent relying on a commission income needs to be able to budget successfully and plan for a sometimes erratic income stream. Of course, by working a well-laid out business plan, a more stable income expectation is supported.

What is a "Million Dollar Producer" and what do they earn?
Most companies refer to a "Million Dollar Producer" as an agent who has closed a total volume of $1 million in sales. That is, the total value of the homes sold is $1 million. The actual income derived by the agent who sells this volume total will vary depending on the commission sharing agreement they have with their company. On average, it would represent income in an approximate range of $15-20,000.

How much is an "average" sale?
CMLS statistics cite the average price house in the Charlotte area in 2001 was $177,959.

How does a real estate agent get paid? Is there a salary? Who pays their expenses?
Most real estate agents are independent contractors. They pay their own expenses, including taxes, Social Security, etc. Because of this, it usually requires a higher gross income as an independent contractor to equal the same net income as a person who is an employee of a firm.

Do I have to join the Realtor® Association?
That depends. Some firms require their associates to be Realtors®. Realtors® are distinguished from real estate licensees in that they subscribe to a Code of Ethics which requires that members practice according to a code of ethical conduct which demands ethical standards higher even than those required by many state licensing laws. The National Association of Realtors®, along with the state and local versions thereof, provides valuable services to its members through education, lobbying, advocacy, professional standards and grievance resolution. The term Realtor® is generally recognized by the public as representing high standards in the industry in terms of professionalism and ethical conduct.

What is the difference between a Salesman and Broker license?
In North Carolina, a salesman licensee is only allowed to practice under the supervision of a broker-in-charge, who is legally responsible for the salesman's actions. A broker is allowed to work more independently, on his or her own. Some brokers operate a real estate business out of their home, with little or no formal "trappings" of a business setting, yet they are quite successful in their own niche markets. Some work with home buyers and sellers, some manage rental property for others, still others provide relocation services to transferees.

What other occupations are available in the real estate industry?
There are many ancillary service industries which are directly related to the business of working with buyers and sellers of residential property. For example, home inspectors provide the critical service of inspecting the home to determine the condition of the home prior to the closing and the buyer taking possession. Inspectors who perform this service for a fee must also be licensed. While no formal pre-licensing education is required, Mingle offers an exam prep course for candidates.

Few people can purchase a home without outside financing. The mortgage lending business is an integral player in the sales process and the savvy Realtor® usually works with several lenders who can offer a variety of mortgage products for specific lending situations. Institutional lenders employ loan originators, loan processors, underwriters, as well as support staff. Appraisers, also licensed to practice their profession are employed by the lender to validate the price being offered for the property. Mingle offers all appraisal pre-licensing and CE courses for these professionals.

When Realtors® build their business to the point that it is bigger than they can manage alone, many hire professional assistants, both licensed and unlicensed, to assist them in managing the day to day operations of a large individual practice. Some top Realtors® have many "team members" who are important parts of the service delivery system, allowing the lead Realtor® to literally be in several places at once, working with many more clients and customers, with equally excellent results, than the Realtor® could handle alone.

Equal Housing Opportunity

REALTOR� -- A Registered collective membership mark that identifies a real estate professional who is a member of the National Association of REALTORS� and subscribes to its strict Code of Ethics.