How to Become a Los Angeles Realtor

Becoming a realtor in L.A. comes with it many benefits as the state of California has one of the strongest real estate markets, only second to Washington D.C. In fact, reports show the median home price in Los Angeles is over $600,000, up 8% since 2018, which speaks volumes in terms of potential commissions.

However, to become a Los Angeles realtor, there are a few steps interested parties must first take to reap the rewards of a real estate career, but for now, let's explore the possible earnings of L.A. realtors.

How Much Does a Realtor Make in Los Angeles?

L.A. realtors make more than the national average in terms of income; however, the exact number is dependent on various factors. For instance, full-time agents tend to make more than part-time agents due to the long hours they put in, which typically translates to more sales.

Likewise, experienced, or long-time agents in the field, tend to make more than newer agents entering the market because they have established an extensive client database as well as honed their home selling knowledge and skills, which enables them to earn more. Other factors that also contribute to a higher income include continuing education and certification.

Realtors' income also depends heavily on successful marketing, or their ability to successfully promote themselves, especially during bearish times when the demand for property is slow.

The location a realtor chooses to work also contributes to his or her income. For instance, realtors that work with listings in urban and suburban areas tend to have a higher income as properties in these areas are typically more valuable.

So, in the end, how much an L.A. realtor makes is ultimately up to him or her. The more serious and dedicated the realtor is to their craft, the more income they stand to make. In fact, it is not uncommon for top realtors in L.A. to earn upwards of a million or more in income per year if they choose to.

How Much Commission Does a Realtor Make in Los Angeles?

Realtor commissions also depend on various factors, including the number of homes the agent closes, the value of the homes the agent closes, and the commissions paid to the office, which is usually whatever ratio the realtor and broker have agreed upon.

As part of the listing agreement, the seller pays a commission fee for listings, which is currently around 6%, to the listing agent or real estate broker for their professional assistance during the transaction, which is usually a percentage of the property's selling price.

The broker then divvies the commission with any realtors and other agents involved in the transaction. This split can involve many people, including the listing broker, the listing agent, the buyer's agent, and the broker who the buyer's agent works for, or sometimes it involves fewer parties, which results in a larger commission for the realtor.

Additionally, the more homes the realtor closes, and the higher the value of the homes he or she closes will also increase the realtor's rate of commission.

Realtors with a specialty or niche also stand to make higher commissions, especially as top agents. Just as every industry has its specialty areas that generate higher earnings than more common areas of occupation, in real estate, these specialty areas include properties with higher price points, such as the luxury homes market, which includes homes with an upgraded kitchen, bathroom, and entertainment room, which enable realtors to generate higher commissions.

Sometimes sellers will offer a bonus to the realtor in addition to the agreed-upon commission to get their home off the market, which can also increase the realtor's commission. Likewise, brokers will also sometimes reward top agents with bonuses or even allow agents to keep the entire commission and instead pay a desk fee, which also provided the opportunity to earn a higher commission.

However, as a new realtor, it is not uncommon to earn minimum wage as opposed to a commission until you have established a trustworthy relationship with clients and potential clients. After about one year of experience, the commissions game is all yours and will continue to grow more each year as your skills, clients, and aptitude develops, which is why it is important to find a supportive broker and mentor who can help prepare you for success.

How Much Does the Average Realtor Make in Los Angeles?

According to reports, the average annual income for L.A. realtors is more than 19% above the national average, which as of current, is approximately $99,353 annually.

However, top realtors, or those in a specialty area, are seeing quite a bit more at approximately $300,000 or more in annual income.

Meanwhile, beginners who earn minimum wage can expect to net somewhere near the average income of Los Angeles, which is just over $60,000, assuming you work full-time.

How to Become a Realtor in Los Angeles?

Pass the Pre-Licensing Courses

To get started as an L.A. realtor, you will first need to complete the requirements for pre-licensing, which will then enable you to train/study under a licensed Los Angeles broker.

As per the pre-licensing requirements, individuals must be at least 18 years of age, with a GED or diploma, and pass three state-approved courses of pre-licensing education, totaling 135 hours.

Following each pre-licensing course, which includes Real Estate Principles, Real Estate Practices, and Real Estate Finance, the applicant is given a final exam, which requires a passing score of at least 70%.

Each final exam can be taken up to two times, during which time applicants are allowed one minute each question to complete the exam.

Pass the California Licensing Exam

Upon completion of the three courses' final exams, you will then be prepared to take the California licensing exam, which is a 3 hour and 15-minute exam that also requires a passing score of at least 70%. Questions involve subjects pertaining to fiduciary obligations, agency laws, financing, property valuation, and more.

To register for the exam, the examinee will need to submit a non-refundable license fee for a salesperson, as well as fingerprints.

Next, choose a testing date, time, and location on the application, which in California will either be L.A., Fresno, San Diego, Oakland, or Sacramento.

After you have successfully registered for the licensing exam, you have up to two years to pass the exam before the application becomes null and void.

If you fail to pass the exam, you make retake the test as often as you'd like before the two-year registration expiration date, after which time, you will have to submit another application along with the appropriate fees.

Examinees are notified as soon as they have completed the test, whether they passed or not.

Once you pass the California licensing exam, you are then ready to begin your new career as an L.A. realtor; however, you will need to work under a practicing broker or brokerage who will serve as your sponsor.

Complete a Salesperson License Application

You will also need to complete a Salesperson License Application (RE 202), which must be completed within one year of passing the exam. The application can be filled out before taking the licensing exam, or it can be completed after passing the exam.

Those who did not complete the Salesperson License Application before passing the exam will be sent the application later.

Once the application is completed, it must be returned, along with the appropriate fee, to the Department of Real Estate examination.

The license will be issued once the Department of Real Estate Examination has received all necessary requirements, including the Salesperson License Application, as well as proof of education and fingerprint information.

Choose a Brokerage or Agency

Next, choose a brokerage to work for, which can be one you already work for or choose a new broker as well as a new market. Just be sure to do your research first.

Maintain the Required Continuing Education

First-time license renewers must take 45 hours of California Department of Real Estate-approved continuing education (CE) courses, which includes risk management, trust fund handling, fair housing, consumer protection, agency, and ethics courses, every four years.

Why Become a Los Angeles Realtor?

Many sellers and buyers depend on the talent of dedicated realtors to help achieve their goals concerning one of their biggest investments-their home.

Therefore, if you have a strong knack for helping people, a winning personality, and an aptitude for complex transactions, and you think you have what it takes to make a difference, perhaps you should look into an exciting career as an L.A. realtor, especially if you are seeking a rewarding profession that enables you to meet and work with various new people and face new challenges each day. It also offers room to grow, which puts you in control of your own success.

For more questions about becoming an L.A. realtor, for recommendations on preparing for the pre-licensing and California licensing exam, or to find out if we are the home for you, feel free to contact us. We look forward to partnering with you for success!