April 3, 2019
I had just left the graduating class of our Cherry Hill real estate school and was reflecting on some of the comments the students had made as they prepared to take their final exam that day. My thoughts were interrupted by a caller inquiring about registering for school with the notion of becoming a Realtor® and I realized how often we hear the same questions–both prior to, and during our real estate pre-licensing classes.
1: How much will it cost for me to be a real estate agent?
The answer depends. By the time you pay for the pre-licensing course (Garden State Real Estate Academy is one of the least expensive, at only $339), the state fees for exams and licensing, and the mandatory fees for items such as errors & omissions insurance, Board of Realtors® dues, MLS fees, etc., you can expect to pay between $2,500 and $3,000 in your first year. Many of those are broken down into monthly or quarterly expenses, so you don’t have to come up with $3,000 all at once. Obviously, if you go crazy with a huge order of “For Sale” signs, etc., you will spend more. But remember, you can make way more than that $3,000 in just one sale.
2: Can I take my pre-licensing course online?
No. New Jersey requires you to attend in-class lessons at a licensed, approved school such as ours. When you are a little way into our class, you will see how challenging it would have been to not have a live instructor to answer your questions and explain complex issues.
3: How long will I have to spend in class? What if I miss a class?
75 hours. And at Garden State, we always allow our students to “make up” classes that they miss—at no charge. In almost every class, we have a student or two who had to drop out of a previous class because of a medical or personal issue, and we always welcome them back at any time to complete the course.
4: What if I fail?
First, it is our obligation to teach you so well that you will pass our final exam, even if our instructor has to stay after class to coach you on a difficult topic. If you then fail the state exam—and almost 40% of all students in New Jersey do fail it on their first attempt, you simply wait 24 hours and take it again. No broker, no client, no other real estate agent will ever know whether you passed the state exam on your first—or your fifth—attempt.
5: How much can I make in my first year as a Realtor®?
Impossible to say, because it is totally up to you. For example, we had an agent in my office whose first sale brought her a $95,000 commission. But we’ve also had agents who rarely showed up for training, ignored what their mentor told them, and quit eight months later having not earned a dime. According to a nationwide survey in Indeed.com, in 2018, the average income for a real estate agent was $82,00. As a full-time agent who generated $2.5 million in sales—not an impossible task—you could earn between $38,000 and $51,000, depending on the commission split your employing broker offers. Of course, as an independent contractor, you are responsible for paying your taxes and operating expenses from that gross income. The first thing I ask newly licensed agents is, “How much do you want to earn?” Then we design a strategy to help them reach that goal, whether it is just enough to earn some extra money, to help pay their child’s college tuition, or to be on the path to earning hundreds of thousands of dollars.
6: Can I sell commercial real estate?
Once you have a New Jersey real estate license, you are permitted to sell (or lease) any type of property for clients anywhere in the state. From a Victorian hotel in Cape May to a townhouse in Cherry Hill to a warehouse in Hackensack or an office building lease in Princeton.
7: If I buy and sell my own properties, will I have to pay the broker’s commission?
That is a policy decision of each broker.
8: Can I negotiate health insurance coverage from my employing broker?
Most brokers hire agents as independent contractors. As such, IRS rules forbid the employer to provide benefits such as health insurance, pension plans or sick/vacation days.
9: Will I have to do “floor time” when I join a brokerage?
Again, that is negotiable. My opinion is that floor time is a thing of the past. Very few prospective buyers call an agency’s main office to inquire about a property any more. They see it online, or on a drive-by, and call the listing agent’s cell phone. So, the 6-12 hours you spend every month as an unpaid receptionist directing incoming calls to other extensions could be spent much more productively prospecting within your sphere of influence and database.
10: When I have my real estate license, can I also sell in Pennsylvania?
No. New Jersey does not have reciprocity with any other state. However, once you have a New Jersey license, you might be able to take just the state portion of another state’s exam without having to sit through 75 hours of classwork again.
David C. Forward is a licensed real estate broker and instructor and was first licensed as a Realtor® 30 years ago. He is School Director of Garden Real Estate Academy, has won numerous awards for real estate sales, is a much-requested public speaker who has addressed audiences on six continents and is the author of 14 books. David can be reached at David@GSREacademy.com