There are several reasons you might consider getting your real estate license. For many, it can be their primary source of income. Other’s might be looking to create an income stream or use it as a side hustle. Obtaining a license would also be beneficial to those looking to have an advantage over others when investing in real estate. No matter your reason, there is a lot to consider when getting your realtor’s license. Before jumping into anything, you should know the process involved in becoming a licensed agent.
How to Become a Real Estate Agent in New Jersey
Be at Least 18 Years of Age
To obtain a real estate license in New Jersey, you’ll have to be at least 18 years of age. You’ll also need to be a US citizen or permanent resident alien and have graduated from high school or have a high school equivalency.
Enroll and Complete Your Required Education Course
You’ll need to attend a qualifying licensed school for 75 hours and successfully complete the real estate course. The real estate school will need to be licensed by the New Jersey Real Estate Commission. For more information on approved education courses, look here.
Pass Your State Licensing Exam
Taking the State licensing exam is the next step in obtaining your real estate license. You’ll need to do so within a year of completing your education. To register, go to http://candidate.psiexams.com/. Exams aren’t easier either, like any major exam, there are exam prep courses you can take as well.
Fingerprinting and Sponsoring Real Estate Brokerage
Before you apply to become a licensed real estate Salesperson, you must have your fingerprints taken and be sponsored by a licensed real estate broker. To avoid problems and make a timely filing, submit your fingerprints as soon as possible after passing the State examination. For information on fingerprinting, please visit: http://www.state.nj.us/dobi/division_rec/licensing/fingerprint06.html.
Submit Your Application
Once the above is completed, you’ll need to submit your application to the Real Estate Licensing Services Bureau. This again needs to be done within a year of completing your education. Send in your application fee and proof of your fingerprinting to make sure your application is accepted.
Worth it for Real Estate Investors?
Whether you’re already in the real estate investing game, becoming a licensed realtor will certainly have its advantages. You certainly won’t be the only investor out there with a license, but it will put you on par with others that do and give you a leg up on those that don’t. Here are a few of the main arguments for getting your real estate license from an investor standpoint:
Access To The MLS: Even with all the websites available to potential investors, the MLS is still the best source for available properties. Acquiring your license will give you access to this tool. It will provide you with an advantage over other investors that do not have access. Yes, other investors will have their agents with access, but cutting out the middle man is always a time saver. You’ll be able to act more quickly on any potential deals when it’s only you involved.
You Will Save Money on Your Investments: Probably the most common reason investors want to become a licensed agent is to make their investments a little more lucrative. This is done by saving on the realtor fees and commissions. By being your own agent, you are essentially wiping out the commissions you’d be paying your real estate agent when buying or selling a property. This will likely save you thousands of dollars on both ends of each transaction.
Network with Other Agents: You should never overlook networking no matter your profession, and real estate is no different. Becoming a licensed agent will give you more opportunities to meet either like-minded investors or professional agents. Not every contact will pay off, but there could certainly be an opportunity or two that comes your way because of new connections you’ve made in the industry.
Other Tools & Resources: Getting a real estate license will give you access to tools and resources that aren’t available to those who don’t have a license. As with anything else, the more tools and information available to you, the better. The MLS mentioned earlier will still be king, but more information never hurts.
You’ll Be Easier to Work With: Having fewer people involved in the sale of any home is always easier. For one, information will have to be passed along that much less, making everything move much faster. With that in mind, you won’t be playing a game of telephone, so what information does get passed along isn’t misconstrued. What you want or need will be conveyed to the other parties involved more clearly, which could also save days on any transaction. Having your license could also show other parties involved your serious and have done this before. Working with an experienced investor rather than a novice can be seen as a positive to others.
Education: As mentioned above, you’ll have to go through about 75 of schooling to get your license. Most of this information might be available to others, or they will learn from experience, but never underestimate the value of formal education. There will be information you have that others don’t. Even if other investors eventually learn what you know, you have that much of a head start. You will be adding to your knowledge as you go along as well.
In the end, it’s up to you to decide if the time and money involved in becoming a licensed realtor is worth it for you. If you are planning to make several real estate investments, it would certainly seem that it would be. However, the time commitment isn’t just getting the education. Remember that now you’ll be on the hook for a lot of paperwork, showings, and all the other functions your agent would typically handle behind the scenes for you. There are also many costs of doing business your agent would typically cover(lockboxes, marketing, etc.) that will be on you now. It’s not as if you’re pocketing the commission savings with no additional cost. If you are ready and willing to take all that on, then a license might be best for you.
Worth it as a Side Hustle?
You might be interested in making money from real estate, but solely as an agent and not an investor. With the interest seeming taking care of everything these days, you might think it’s just clicking a few buttons and “poof”, a house is sold, and you make a commission. Although there is a lot more that doesn’t need to be done in person these days, selling a home is still a lot of work for the agents on both sides. Before getting your license as a side hustle, there are a lot of things to consider.
Getting Licensed Needs Time and Money: You won’t simply walk into the realtor’s exam and ace it without your proper training first. In fact, as mentioned several times already, you’ll need to take about 75 hours of formal education first. That’s a lot of time, and formal education doesn’t typically come without a cost. You’ll need to decide how serious you’ll be working this as a side hustle as you’ll need to invest your time and money before you start making anything from it.
It Requires A Lot of Your Time: When most people think side hustle, they think of something quick, easy, and can do on their schedule. Well, being a realtor won’t let you do any of those things. If you have a client, you can’t tell them you’ll get to the paperwork in a week or that you don’t feel like doing a showing that day. They are expecting you to be responsive to their questions and other needs. Real estate is a full-time job for most, and it will require more than just a few hours of your attention per week if you want to be good.
You’ll Be at a Disadvantage: Gone are the days of people walking into a realtor’s office and getting the first available sales agent, but that doesn’t mean you’ll be on a level playing field with full-time agents. While you’re out there working your regular 9-5, they’ll be dedicating all their time to finding more clients and making more sales. At best, you’ll be playing catchup most of the time as you won’t have nearly as much time to dedicate as full-time agents.
Not only that but if potential clients know you are only working the job as a side hustle, they might be turned off. People will want your full attention, and knowing that you could be unavailable from 9-5 every day could be a big turn-off.
Getting your realtor’s license can be a way to add another income stream to your arsenal, but it’s by no means an easy way of making money. If you are willing to put in the time and the effort, you can certainly make it worth your time with only a few sales per year. You’ll need to be available to your client, do hours of paperwork, and be ready for all the responsibilities that come with being an agent. All this while having a full-time job, family, and other responsibilities can be difficult. Ensure you understand what you are getting yourself into before investing your time and money for real estate training to become a licensed real estate agent.
There are certainly advantages from both an investing and side hustle standpoint when becoming a licensed broker. Neither comes without its disadvantages as well. Investors will have additional work and costs with their transactions and won’t simply be pocketing the commissions. There could also be restrictions in what deals they can work themselves based on what brokerage they are associated with. For both investing and side hustles, there are costs and time commitments such as continuing education courses and renewal fees you’ll need to take into consideration as well. In the end, you’ll have to decide how much it’s worth it to you to do all these functions yourself and how much money you’ll be making\saving in the process.
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Jeff is a fan of all things finance. When he’s not out there changing the world with his blog, you can find him on a run, a Mets game, playing video games, or just playing around with his kids.