Oh, a lot of your expenses are front loaded by the way. There are some excellent ways to get into this business, acquire great knowledge and become smarter than the average rookie Realtor.
1. Get a salaried, or hourly clerical job as a transaction coordinator, excrow assistant, listing assistant, mortgage loss mitigator, REO asset management company processor.
2. or a salaried or hourly job in property management, loan processing or commercial real estate,
These kind of jobs provide you with A: valuable on the job training. B: A paycehck every two weeks while you are learning C. contacts of people that you might do business with after you take the big leap into commission only sales.
I'll be the spoiler, I think it's a horrible time to get into real estate, for two reasons.
1. There are more real estate agents than every before, as lots of people jumped into the industry chasing big profits based on easy sales.
2. Sales are at the lowest level in years, as the poor market conditions only worsen.
Combine these two factors, and you have a cutthroat market: more agents competing for fewer sales than ever before.
The good news is that I expect a lot of agents to get shaken out of the marker over the next year or two. See my recent blog post for more on this topic: http://portlandrealestateoutsider.blogspot.com/2008/01/sales
Speaking from my own experience, I spent a year as a salesman in 2001 for a fiberoptics company as the optical networking bubble was bursting. It was the hardest thing I even did, and I made very few sales, and almost nothing in commissions. If I had been relying purely on commissions, I would have starved.
If you are set on real estate my advice would be to find a position that allows you to learn the market and wait a year or two until the order takers are shaken out. Good luck whatever you decide to do!
The business climate in resale residential real estate will require new and current agents to be savvier and make better decisions than the recent years. More consumers are not placing a greater emphasis on interviewing Realtors and choosing their agent based upon skill, ability, track record and commitment.
While I highly respect Jim Walkers input, I will take a different approach to his answer on this thread. Depending upon your ambitions and your current financial situation, the right path might be to move forward in a commission sale position at this time.
Are you approaching this as a business? As in any business, profits are not necessarily available in the entry and builidng stages. If you have the ability to sustain yourself financially until you build a client base, consider that.
You might affiliate w/ a team, and funciton as a buyers agent working the leads produced by the listings of that team. You might also work as a commissioned based agent who co-lists w/ another agent. It will give you a portfolio of istings in addition to the contats and experience.
While I do not disagree w/ the merits of a salaried or clerical job to learn the biz, if you are willing to make a full biz commmitment to this profession, and can weather unstable income, the learning curve may move faster in a direct plunge.
Although I am an avid supporter of reducing the overall number of Realtors in the NAR, I am still supportive and receptive to new entrants who exhibit commitment to excellence.
Depending on where you plan to work, it is a good idea to specialize in one particular zone. If you are in a metro area, say Portland for instance. It is extremely crucial that you work the same area over and over and over. Learn the schools, demographics, distance to the airport, distance to the beach, back roads to every square inch of that area. Know a good lender or a few of them to be safe. Know a good home inspector or have a list of them to provide your clients. Know a good handyman or contractor with their contractors license. Know where the libraries are and daycares are. Don't try to sell homes all over Portland. It will never work, it's too large of a City to try and cover yourself. This way, you can market yourself as a "West Hills Specialist" or whatever area you choose.
Bottom line...Don't just TRY real estate. You must have a passion and incredible patience. Nothing in this job is instant and be prepared to go 4-5 months without making any money at all. Concentrate on your sphere of influence at first; your family, friends, people you are familiar with at your local grocery store etc. Let them help you, if they aren't able to personally purchase or sell real estate through you, ask them if they know of anybody who is. Ask them to always think of you as the local real estate professional...more importantly CONSTANTLY REMIND THEM! You must always remain in the top 5 people they think of as you will see in Gary Kellers - "Million Dollar Agent".
If this is simply a trial run to see if you like it...DON'T EVEN THINK ABOUT IT. This can be extremely competitive and the agents who are nonchalant about it get run over by the producers. Even within the same company.
A long time broker once told me..."It's not about doing things right, it's about doing the right things." That means, don't be afraid to pick up the phone and completely bomb trying to obtain expired listings. Pick the phone back up and continue trying others. You will find your comfort zone and pretty soon you will be "doing the right things, right".
If you find that becoming an independent agent may not work for you, there is a chance that an agent looking to expand his/her team, may be looking for an administrative assistant with their real estate license. You may be able to find a paying position. These are rare right now though.
I wish you well...
Other than the advise below, if you want to get into real estate, then you have to do it wholeheartedly. To be honest with you, this is not an easy time to get into the business, but you also have successful rookies.
This young lady in my office, with less than 1 year of experience just put a $1.2M, all cash, offer in; this is not counting quite a few other deals she closed so far.
However, she works day and night; whatever you read or head in the book or classes, she does that. She farms the neighborhood, holds open house every weekend, writes notes, talks to people, writes newsletter; the whole thing. She gets discouraged sometimes, but she does much better than some of the long time agents in the office.
Real estate is a difficult career to get into and be successful at; there is a lot of commitment and sacrifice on your part.
Other than the exam, which is easy to pass, unfortunately, for serious Realtors; there is a lot to learn. You need to know the contracts in and out, the real estate law and practices, how to market both you and the properties, how to follow through when there is a transaction, on and on.
You need to have at least six months reserve for your living expense and marketing expense. As an independent contractor, your company will do some advertising for you, but you are responsible for most of the others. Find the right brokerage to work for - a successful one and the one that will give you proper training and support, you will need that to get started.
But it can also be very rewarding in very many ways. That's another article to write.
Now is the best time to get into Real Estate.
Real Estate Agent 2.0 the next Generation Realtor, has been taking off for about 18 months. It is the Virtual interactive agent of the future. I think less than 1% of the agents out in this country have moved to embrace it. You will never know what it is like to waste money on paper and ink.
People need Realtors more than ever today.
To much info, many homes to choose from.
Go to work for a full service company, A company that believes you should get paid what your worth.
A company that offers the best training. Read Gary Keller's Millionaire Real Estate Agent. The book is the very best place to start.
If you make it to your first year anniversary, and are not on food stamps.
You will be a STAR.
P.S. Do not do any, discount anything....your worth top dollar. Bring Value to the game, and get crazy.
If you are just thinking of taking the exam in November, I am not sure that you really want it badly enough. If you have a passion for real estate and dealing with people, nothing can stand in your way of taking that test no matter what we have to say. I would do some soul searching about why you want to become a real estate agent and then ask yourself how badly you want it. Maybe you should spend some time shadowing an agent for a few days and see if it's what you thought it was.