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What are liquidated damages? Most real estate transactions follow the same structured procedure to meet the needs of the home seller and the homebuyer. If everything goes well, both parties walk away happy.
However, there are instances where something erupts in the transaction causing disparity between the parties and damage could be dealt. The good thing is, real estate agents and the real estate transaction process has procedures in place to compensate for damages dealt to a party.
In this article, we explore the power of liquidated damages and the role they play in the real estate transaction.
A liquidated damages clause is a contract provision where the buyer and seller agree in advance to a specific dollar amount (or a cap) that may be owed if one party breaches the contract—especially when the actual financial impact could be difficult to calculate. In many real estate transactions, this is commonly tied to the buyer’s earnest money deposit (the money placed into escrow to show good faith).
So, now that we know what liquidated damages are, let’s explore when and how liquidated damages come into play during a real estate transaction.
When a real estate offer is made and accepted by both parties, the seller will require the buyer to make a deposit (often called an earnest money deposit, and the amount varies by market, contract, and state) into an escrow account as financial security.
In California, you’ll often hear “up to 3%” discussed in residential transactions because California law creates a framework around liquidated damages for certain 1–4 unit residential purchases (and the enforceability can depend on how the agreement is written and initialed). This is not a universal nationwide rule, but it is a common California reference point.
At first glance, the damages caused with backing out of a deal might be hard to discover. But, let’s dig deeper to see the full picture and how these expenses add up for the home seller.
So, why is the liquidated damages clause important? Let’s lay out a scenario. A buyer and seller have entered a contract on the sale of a one million dollar home. As part of the contract, the buyer deposits $30,000 dollars into an escrow account.
While waiting for the deal to close, the buyer requests some repairs on the property. The seller deems the requests reasonable and performs the repairs. In the meantime, the seller is preparing to vacate the property (scheduling moving services, making large purchases, etc). At some point in the process, the buyer calls off the deal.
What happens now?
The seller has already spent money making expensive repairs and preparing to close the sale. At this point, all of the contingencies have cleared. The seller has jumped through all the hoops. Does the seller just lose out on all the money promised in the sale?
This is where the liquidated damages clause comes in.
Depending on the contract terms and the facts, the seller may seek to keep some or all of the buyer’s deposit as liquidated damages (often as compensation for taking the property off the market and other losses that are hard to measure). Liquidated damages are generally a pre-agreed amount/cap, not automatically “the exact amount of damage caused.
However, it’s not a simple process.
Neither party is automatically entitled to the money in the escrow account. The buyer and seller must negotiate and agree on what to do with the money. Sometimes, the two parties can’t come to an agreement. What happens at this point?
In many disputes, the escrow holder can’t release funds without mutual written instructions or a legal direction (such as a court order). Depending on the contract, the path forward might involve mediation, arbitration, or litigation
Liquidated damages clauses can be an important protection tool in a real estate contract, but whether they should be used (and how they’re enforced) depends on the property type, the state, and the specific contract language. In many common scenarios, if a buyer defaults after key deadlines/contingencies are removed, a seller may try to claim the deposit as liquidated damages—often as a streamlined remedy that avoids proving every dollar of loss.
What is Mello-Roos?
For those who have never heard of this real estate term, Mello-Roos is an additional special tax in California that shows up on a property’s annual tax bill, separate from the base property tax rate. Who is subject to Mello-Roos? What are the taxes used for? How is it beneficial to homeowners? Let’s explore this fascinating tax and how it affects the way you interact with clients.
Quick Answer (2026): Mello-Roos is a Community Facilities District (CFD) special tax created under the Community Facilities District Act of 1982 to help fund public infrastructure and services (often by paying off bonds).
Some communities are brand new or rather new. These communities might have Mello-Roos or that additional tax or special assessment.
When these districts were first built (or expanded), they needed their own fire stations, schools, roadways, and other services. They would need people in these new communities to help pay for them. How? Many districts finance these improvements through bonds and repay them using the CFD (Mello-Roos) special tax.
This bond would usually last anywhere between 20–40 years (terms vary by district), although not all districts handle costs the same way and some may continue a smaller charge for ongoing services.
Paying more taxes to live in a neighborhood might sound like a turn off but this could be a preferred feature for some people.
This is what buyers search most often—because Mello-Roos can change affordability.
On the surface, you wouldn’t think that people would want to pay more in taxes or on anything else for that matter. But in a way, Mello-Roos comes with some advantages and benefits.
Think of Mello-Roos as investing in a seat upgrade on a plane flight. Everyone on the flight will get to the destination but your upgrade to 1st class just made everything a little better. A larger seat, more legroom, better food, and free drinks make it worth spending a little more on the ticket.
Now, let’s think about what that means in the new community you just moved into. Mello-Roos allows for better schools, new roads, perhaps more police and other government services. That being said, as a buyer you have to ask yourself if you are willing to pay that extra Mello-Roos to live in a district where you’ll get those benefits.
The answer to the question “Is Mello-Roos Worth it?” lies with the individual buyer and what’s most important to them in their new home.
In some cases, buyers are more than willing to pay the Mello-Roos tax for that perfect property—especially if it gets them in a community that may be more modern, well maintained, or in an exclusive area. They could see the benefits that a Mello-Roos brings to the community and see it as a worthy investment for themselves or–potentially–their family.
For some, the answer is clearly no. For example, let’s say the buyer is single and a new school district is not the driving force for where they would like to purchase a home. Perhaps for them, the overall benefits of Mello-Roos aren’t enough to justify paying the extra taxes. In this case, the homebuyer would be interested in a different neighborhood that meets their wants.
How does Mello-Roos affect you as a REALTOR®️? Let’s say you have a buyer with a budget of one million dollars. The lender has approved your buyer and the maximum monthly payment your buyer can afford is $5,000. You’re able to find the perfect property within the budget and your client is excited. But then you find out the house has Mello-Roos.
So now your client’s payment has gone from their maximum $5,000 to–let’s say–$6,000. Now we’re beyond what they can afford. So they no longer qualify for this house because Mello-Roos has tipped the scale over their maximum allowed by the lender.
As a Real Estate Agent, it’s important to understand what Mello-Roos is so that you can better serve your clients and prevent any unnecessary drama. Before showing properties to your buyer, find out ahead of time if any of your listings are subjected to the neighborhood tax. You can often check the tax bill/parcel lookup or confirm by contacting a local title representative. If they are, your buyer may not qualify, and you will know that going in.
Pro tip for clarity: Convert Mello-Roos to a monthly number when you explain it (annual CFD ÷ 12). That makes it easy for buyers to understand how it affects their total payment.
How long does Mello-Roos last?
Many CFD taxes are tied to bond repayment and often run about 20–40 years, but it depends on the district.
Can it increase?
Some districts allow increases (often with caps), so buyers should confirm the district’s rules rather than assume it stays flat.
Can a buyer prepay it?
Some CFDs allow payoff/prepayment, but terms vary by district—confirm through the CFD/tax collector or title.
Is Mello-Roos tax deductible?
It depends. Some special assessments/fees may not be deductible like standard “ad valorem” property taxes. Buyers should ask a tax professional.
Taxing is an effective method for newly formed communities or districts to finance improvements to create an appealing area for homebuyers. Oftentimes, the money goes to fund schools, hospitals, police stations, road construction, and sewer maintenance. As a result, these amenities help attract families or individuals who can not only afford to pay the Mello-Roos but actively seek out these characteristics.
A Mello-Roos tax can pose a potential issue for some home buyers. If the additional tax is high enough, it could make the property unaffordable for the buyer. That’s why it’s important to know what your homebuyer wants in a property. The last thing you want to do is to pull the rug from under their feet with the Mello-Roos tax when they find their dream home but can’t afford the tax.
Overall, it’s important to know the pros and cons of this tax before searching for a home. This will allow the buyer to make the best decision for their lifestyle and finances.
Landing your very first real-estate client is a milestone, not just a transaction. It’s the moment that proves, “Yes—I can do this.” New agents everywhere ask the same question: How do I secure that first client, fast? Think of it as the launchpad for your entire career—the deal that sets everything else in motion.
Most new agents have the same realization at the start of their career. They realize they don’t know how or even where to start to get their first real estate client. If you have been an agent for several months and still have not gotten a client, don’t panic.
It is normal for most new real estate agents to go long periods of time at the start of their careers without a client. That’s why the first year is the hardest.
There’s good news. You can practice the fundamental methods of getting your first real estate client. These methods are not flashy or revolutionary. They are the fundamentals that, when put into practice, are proven actions you can do right now to get your first real estate client.
Prospecting is a necessary part to growing your business–especially when you are a new real estate agent. At first, these methods are hard. They put you, the new agent, into a vulnerable position because you will experience failure through rejection.
Coping with rejection is hard. Moreover, the fear of rejection keeps us from action. But, overcoming this fear is paramount to building a successful career.
So, let’s get started. Here are the top 5 most effective ways you can get your first real estate client:
Prospecting does not get more fundamental than this. Door knocking is the oldest prospecting method in the book. Every real estate agent has been told, at some point in their career, to practice door knocking. Door knocking involves knocking on homeowners’ doors to see if they would like to sell their home or buy a new home.
Door knocking is a common prospecting method because it is an effective way to find new leads in a targeted neighborhood.
Surprisingly, most new real estate agents door knock ineffectively because they miss one important ingredient. They should always bring value. When you give value, the interaction becomes worthwhile even when they are not interested in your service.
Contrastingly, if you do not offer value, the homeowner will not have gained anything from the interaction if they are not interested in your service.
Value can be anything that will benefit the homeowner’s well-being. One effective gift you can provide is the gift of knowledge. You can show homeowners what their home is worth. This might not convince anyone to make the decision to list their home in the moment. However, this knowledge can incentivize them to list in the future.
At the very least, the lead will now have a document that tells them how much money they can earn. Therefore, they will contact you when they are ready to list.
Oftentimes, homeowners are surprised to see how much money they can make from selling their home. They might be in the midst of thinking about upgrading houses or downsizing to a smaller house. That is why giving them the gift of knowledge can inspire them to take action.
Cold calling is like door knocking but done over the phone. It involves contacting leads, often without a rapport (hence the term “cold”). The goal is to see if they would like to sell their home or buy a new home. Cold calling can be done from your home, office, or your favorite coffee shop.
Note: Verify prospects against the National & State DNC lists and secure 1-to-1 written consent before any automated dialing or prerecorded message
Just like door knocking, cold calling is quantity driven. The more people you call, the more likely you will find a prospective first real estate client. Cold calling is a common method to discover clients from a list of leads. The reason why this is common, just like door knocking, is because it is an effective method to find interested home buyers and home sellers.
Similar to door knocking, the chances of building a rapport increases when you give value. Value piques the interest of the lead. You contact leads cold and without warning. Therefore, you should give value to warm up to the conversation. You giving the contact value–in the form of a gift–is a great way to incentivize them to list. This value being the gift of knowledge.
The contact will know how much their house is worth and how much money they can make, therefore incentivizing to sell their home. The contact might not sell their home right away, but they will have your contact information when they are ready.
However, you might get lucky. You could contact someone who is already thinking of selling their home and this gift is the extra encouragement for them to sell their home or buy a new one.
Your sphere of influence is another fundamental method of finding your first real estate client. Most agents recognize this term because your sphere of influence has a high success rate. So, what is the sphere of influence and how does it work?
The sphere of influence is your immediate network of people you know. You might think “I don’t have a network–I’m new!” This is a common fallacy. Everyone has a sphere of influence, but not everyone knows what it looks like.
Your sphere of influence consists of family members, friends, people in your volunteer group, people who you are acquaintances with, etc. Every person you know can be in your sphere of influence. Therefore, you already have an advantage to work with them when they need a real estate professional’s opinion or help.
When someone in your sphere of influence needs help selling their home or they are looking to buy a new home, you have a warm connection to them. This connection increases their likelihood of hiring you.
Here is an example of using your sphere of influence. You contact acquaintances, friends, and family members to tell them that you are a real estate agent working at the local brokerage. When an acquaintance hears your career update, they inform you that they want to sell their house and buy a new one. You offer your services and they sign with you.
This is just one example of how the sphere of influence can work in your favor. You never know what people in your sphere of influence need until you put yourself out there. When you do, you may find that some people in your sphere are interested in listing or buying a home.
In an interview with Richard Schulman, Keller Williams real estate agent and top producing KW agent in the country, he explained “as humans, it’s our natural instinct to work with someone we trust.”
He continued to explain, top producing agents will always lose business to their client’s friend, no matter their qualifications. The people in your network will have more trust with you than someone they don’t know. Therefore, you can use this advantage to bridge a connection with them.
That’s what makes the sphere of influence such a powerful way to prospect for new leads.
If you want to learn how to get more real estate clients, close more deals, and earn bigger commissions, then learn more about our real estate training program, From Rookie to Rockstar.
This is an online video program designed for new real estate agents. It helps them learn fundamental components of being a real estate agent and how to get their very first client.
Creating a digital presence helps agents find their first real estate client passively. A digital presence creates familiarity and a sense of connection through content distributed on social media. Such social media channels include Facebook, Instagram, Twitter, LinkedIn, YouTube, and their own personal website.
Some agents discredit the importance of having a strong digital presence. They think a better investment of your time is to interfacing with leads face-to-face. Interfacing examples include door knocking or cold calling. Interfacing with leads is always effective. However, they overlook the power of social media ads and creating a digital connection.
Using social-media advertising is a smart way to get in front of home buyers and sellers. It’s the digital equivalent of spotting a local agent’s ad in the Sunday paper—only now one tap can drop their contact info straight into your CRM. On the organic side, these 15 Facebook tips for agents cover page setup, posting, and groups.
Because housing is a protected category, every U.S. real-estate campaign must be created under Meta’s Special Ad Category → Housing. When you check that box Meta automatically:
With precision targeting gone, your creative has to carry the day. Short reels of a just-sold home, selfie testimonials, or quick neighborhood spotlights will stop the scroll. Point each ad to a Meta Lead Form or Messenger button so the platform can auto-fill the prospect’s name, email, and phone.
Informing the user that you can help them sell their home or find a new home to purchase. Coincidentally this has been on their mind. Because of their need, they can click on the ad and have their contact information forwarded to you. This creates a warm lead that you can contact in the future.
Therein lies the power of social media advertising that people overlook. Taking time to focus on developing a strong funnel system for warm leads increases your lead to client conversion rate.
A digital presence is a creative approach to booking more clientele. The result of creating a digital presence is brand recognition and credibility in your sector. At the core of creating a digital presence, real estate agents are simply building a personal connection with their sphere of influence.
You can maintain your sphere of influence by interacting with people on social media. The simple idea behind this is an earnest one. Social media makes communication easy. When your goal is to make new friends and be a good friend, retaining clients no longer becomes a concern. People will naturally work with you when they need an agent.
You can take social media a step further by building a brand around your name. This is an effective way of letting your sphere of influence know about your career, achievement, and progress without contacting them one at a time.
Additionally, this will remind people in your sphere of influence that you are a real estate agent doing great things with your career. When they need an agent, they will think of you because they will associate anything real estate related with you.
Let’s discuss the power of content marketing. The reason why YouTube and real estate agent celebrities are closely connected is because celebrities know the influence of creating content. Creating content increase your reach and influence to people who are outside of your sphere of influence. When the content created is high quality, people will share it. This is how your reach and influence grows.
Let’s see an example of this in the real world. Ryan Serhant is a popular name among real estate agents because he’s a known celebrity. Part of his following includes people inside and outside of the real estate industry. There are thousands of people who know this specific real estate agent because of the content he creates.
The reason why so many people know about Ryan Serhant is because he has created copious amounts of content. He has done this with videos, television interviews, broadcast shows, social media posts, tweets, instagram posts, and more. He has attracted more people to his brand and style, which is evident in everything he creates. Therefore, he has created a reputation, also known as a brand name.
So, how does this translate to finding new leads? Content marketing will help you build an audience of people. A few of these people will seek out your services. This is passive lead generation.
People who see your content will seek you out because they are in need of a real estate agent. They saw your content and turned to you for professional help. Again, when they think of real estate, they will think of you.
Although attaining celebrity status is unlikely, you can build local recognition through content marketing.
Agents can use lead generating websites and online directories to passively find their first real estate client. The great part about using websites and directories to market your services is that it does not require extraneous attention. Lead capturing websites and online directories passively give you leads. In other words, they exist as a funnel to your website or lead capture.
Lead generating websites can exist in many forms. Websites such as Trulia, Redfin, and BoldLeads let you set up your presence online with little effort. Each offer a different advantage for agents. These websites are widely accepted as a method of lead generation because digital prospecting is a necessity for agents.
Online directories are a passive way to find leads online. Directories such as Google Business Profile (GBP) or Yelp serve as a review aggregator. In other words, people review your business.
The more high quality review, the easier you are to find online and the more likely people will work with you. Although using online directories effectively will be hard when finding your first real estate client, they serve as a powerful tool to grow your business over time.
You should encourage clients and to review you online after working with you. The earlier you start, the greater the growth.
Artificial-intelligence tools are the new Swiss-army knife for rookie agents, but they work best when paired with human judgment and strict compliance.
Handled thoughtfully, AI becomes your tireless assistant: writing first drafts, qualifying leads while you sleep, and freeing you to do what bots can’t—build trust face-to-face.
Now, more than ever, people are turning to the internet and social media to find services. A lack of digital presence or lead generation is neglecting a fundamental of finding your first real estate client.
At first, prospecting may seem daunting because it has such a low success rate. The great part about prospecting is you will not run out of leads. Therefore, the low success rate translates to a few clients over a large pool lead.
The hardest part of prospecting is not the act of prospecting. It is more subtle. The hardest part of prospecting is surmounting self-doubt. Most new real estate agents experience self-doubt when they encounter constant rejection.
This feeling festers and manifests into phrases like, “this won’t work…” or “why don’t I try another career” or even “I’ll never find a client.”
To ward off these negative thoughts, new real estate agents should develop a sense of awareness. This is to identify hurtful thoughts that could sew doubt. You will prevent thought spirals from festering when you reinforce your attitude with healthy self talk. This prevents the creation of mental barriers that hold you back from success.
Also, always remember one simple thing: you have to keep prospecting to find your first real estate client. The good news, if you keep doing it, you will find them. Every rejection gets you closer to the one client that will work with you.
Finding that first real estate client is hard. That's why we created our program, From Rookie to Rockstar. This is an online video training program to help you earn more clients, close more deals, and make bigger commissions.
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Escrow is commonly associated with real estate but it’s not exclusive to it. Escrow is a neutral third party used to hold and distribute money or property once contractual obligations are met. Escrow is used across many fields of business such as banking, the buying and selling of intellectual property, and in mergers and acquisitions of large companies. But let’s talk more about how it’s used in real estate.
Now maybe you have heard the term but you’re not exactly sure what escrow does in a real estate transaction. In simple terms, escrow in real estate is a neutral third party that protects the integrity of the transaction.
Important note: The exact closing process can vary by state. In some states, an escrow company commonly handles closing. In others, a title company and/or a real estate attorney may run the closing (sometimes still referred to as “escrow” or “settlement”). Either way, the core purpose is the same: a neutral party helps ensure the agreed-upon terms are completed and funds/documents are handled properly.
So what does this mean? Let’s explore how escrow in real estate plays a part in that.
It starts with you as a real estate agent getting a buyer and a seller together. That can be to either acquire or sell a property depending on who you are representing. When everyone is happy and in agreement, both parties will enter into a legal and binding purchase agreement (this may be called different names depending on your state—such as the RPA (Residential Purchase Agreement) in California).
The purchase agreement is integral to the transaction because it covers all the terms, conditions, and stipulations that have to be met according to what the buyer and seller have agreed upon. It acts as the blueprint for escrow (or the closing/settlement team) to carry out.
When you have a fully executed contract that’s when escrow steps in. A “fully executed” contract means that the buyer, seller, and their respective agents have all signed off the purchase agreement as well as any other addendums or amendments that include the conditions of the sale.
The main purpose of the escrow/closing team is to now take the contract and make sure that all the conditions are met in the transaction. As a matter of fact, escrow will not close until that happens. Not only will they make sure that all the stipulations are met, but they are also responsible for keeping everything on schedule and accounting for every penny.
In most transactions, the buyer submits an earnest money deposit shortly after the contract is accepted. Those funds are typically held in an escrow account (or trust account) by the escrow holder, title company, or attorney—depending on the state and local custom—until the deal closes or the contract is canceled according to the terms.
So what happens if you’re going through escrow and a condition has not been met? What happens then? Does escrow still close? As we just discussed it’s escrow’s responsibility to make sure that all conditions are met. Let’s talk about how escrow handles the situation when they aren’t.
So, let’s say we have opened escrow and so far everything has been on schedule. All items have been accounted for, we’re nearing the close and everyone is happy. Escrow is reviewing their final paperwork to make sure all stipulations have been met and they happen to notice that the seller agreed to give the buyer a termite report (or another required inspection/disclosure). It was never ordered.
Or do we?
A missing report could be considered a minor issue. This is not an expensive report and can be obtained fairly easily. Should escrow worry about it or just close the deal?
Knowing what you do up to this point, what do you think needs to happen? If you said, “Get the report done,” then you are right! Why? Because it’s in the contract. So even though you may have been near the end, everything has to stop. It’s a stipulation and all stipulations need to be met before escrow can close.
Remember, escrow will uphold the integrity of the transaction regardless of whether the stipulation or condition is small or large. This is escrow’s primary purpose. So what else is escrow responsible for?
Let’s talk about the other aspects that escrow is responsible for in a transaction. Aside from the stipulations that have to be met, they are involved with other areas of the transaction such as:
What is the property title? The property title is the transfer of ownership from the seller to the buyer. Escrow is in communication with the title/closing side of the transaction to get the property information and to make sure that all the information is accurate.
The deed is the document used to transfer ownership from the seller to the buyer. The exact type of deed can vary by state (for example, a grant deed or warranty deed may be common depending on location). The closing team coordinates preparation and signing of the deed, and at close, they ensure it is properly recorded according to local requirements.
During escrow, they will receive and hold funds related to the transaction and coordinate with the buyer’s lender to ensure everything with the loan is on track. This also allows escrow to be aware of any issues that may arise to prevent the closing of escrow.
They prepare the final closing/settlement statements for the buyer and seller. This is an accounting of funds to the seller (including proceeds) and to the buyer (costs and credits). This is prepared before the transaction formally closes and the closing funds are distributed.
Escrow is an excellent resource for both you and your client. All you have to do is reach out to your escrow officer (or closing/settlement contact) and they can let you know everything they can do for you.
As you can see, escrow is a vital part of the real estate process. Because they are a neutral third party, you can be assured that everything is on the up and up in the transaction. Escrow makes sure that everything in the contract is honored and frees up the real estate agent to do what they do best: getting more deals!
Addendum vs amendment–what’s the difference?
The addendum and amendment are two important tools related to the Residential Purchase Agreement (RPA). Use an addendum to add or clarify terms that weren’t in the original contract. Use an amendment to change terms that are already part of the signed agreement.
We’ll cover what each does and when to use them.
They are similar but knowing the difference between an addendum vs amendment will help you to use them correctly.
Let’s start with the contract also known as the Residential Purchase Agreement. The Residential Purchase Agreement is used to create a legally binding agreement between the buyer and the seller. Within the RPA are all the terms, conditions, and stipulations agreed upon by all parties in the transaction.
Occasionally, these terms may have to be changed or modified. Sometimes the negotiation of terms will continue even after you have a fully executed contract and have opened escrow. This is when the addendum and amendment come into play. Let’s get a little more detailed about what these terms mean and when you would use them.
In some cases, you are adding conditions to the contract. When the contract exists and we add something new to the terms, we want to use the addendum. This addition could be the inclusion of real property or the addition of an inspection or report. Just remember, when we ADD to the contract, we use the ADDendum.
For example, let’s say during the escrow process there’s some damage to the carpets done by the pet or child of the seller. The seller agrees to then add a $5,000 credit for new carpet at the close of escrow. Because you’re introducing a new seller credit, document it in writing. If it affects price or net proceeds, many brokerages (especially in California) record it on an amendment; some use an addendum for truly new clauses. Follow your broker’s practice.
Other times, you may be amending terms within the contract. Amend means to change or modify. Let’s talk about the RPA again. So we’re starting with the agreement of terms and conditions. Now you want to take something out or change something within the terms. In this case, we’re going to use the amendment.
So, a good example of when to use an amendment would be if you wanted to take something out of the agreed terms. Maybe the seller originally agreed to include the living room furniture in the purchase. The original agreement included the sofa, coffee table, love seat, and recliner. But, now, the seller has second thoughts about the recliner for sentimental reasons. You would then use an amendment to change the terms omitting the chair.
California note: Use C.A.R. Form ADM (Addendum) when adding terms, and C.A.R. Form AEA (Amendment of Existing Agreement Terms) when modifying terms in a signed agreement. Your brokerage may have specific guidance—follow that.
There may be situations where you may not be sure whether to use the addendum vs amendment. There could be times where you’re both adding as well as changing conditions that already exist. How do you categorize this? It seems to get tricky at this point.
What form do you use?
Use an addendum when you need to add or clarify terms that weren’t in the original agreement (it supplements the contract). Use an amendment when you’re changing terms that are already part of the signed agreement—like price, dates, included items, or contingencies (it modifies the contract). If your change both adds and modifies, document the modifications with an amendment and, if needed, add a short addendum for truly new clauses.
Use an addendum to list new inclusions or exclusions that weren’t addressed in the original agreement (for example, adding a home-warranty clause or specifying personal property that wasn’t mentioned).
If you need to remove or change something the parties already agreed to—like taking out an item that was included—use an amendment. Being specific avoids misunderstandings.
Simply writing in, “Buyer wants all the real property in the home” is too vague. This could cause potential issues between parties so get specific and clearly outline all the buyer wants.
For instance:
As you can see, this is clear and more detailed leaving no doubt what the buyer is requesting from the seller.
Now that we know more about the differences between the addendum vs amendment and how to use them, what do we do with these changes?
Escrow implements signed written instructions. If you’re changing the purchase agreement, memorialize those changes on a contract amendment and have all parties sign. Escrow may also prepare amended escrow instructions, but those changes are effective only when all principals sign.
After the amendment or addendum is fully executed, provide it to escrow so the file reflects the updated agreement and instructions.
The addendum and amendment are great sidekicks to the Residential Purchase Agreement. In real estate, you never know what’s going to happen during a transaction and the most well-written contract may need to be changed or modified. Even the Constitution has amendments!
So, remember that when you add to the contract, use the addendum. When you’re removing from or changing the contract, use the amendment.
When you’re not sure which document applies, confirm with your broker or a real-estate attorney—don’t default to one or the other. Escrow will follow signed instructions once the correct form is executed.
As an agent, what’s the most creative item you’ve had to put on an addendum in a transaction? Share it with us!
Your buyer's termite report just came back with Section 1 items in the kitchen and a list of Section 2 notes. Before anyone panics, you need to know what those labels mean, because one of them can hold up the loan and the other one can't.
This guide explains how a California termite inspection works, what each section of the report means, who pays for what, what lenders require, and what it costs.
A termite inspection is an examination of a home by a licensed structural pest control inspector who looks for termites, dry rot, fungus, and other wood-destroying organisms. A wood-destroying organism, or WDO, is any pest or fungus that eats or breaks down the wood structure of a building.
The inspector checks the interior, exterior, attic, and crawl space, then files a written report that sorts every finding into one of three sections. In California, those reports are filed with the Structural Pest Control Board, and anyone can look up a property's inspection history on the board's website.
The inspection usually happens early in escrow, alongside the buyer's home inspection. In a wood-and-stucco state like California, skipping it is a gamble no agent should let a client take.
Section 1 means the inspector found an active infestation or existing damage, like live termites, dry rot, or fungus that's already in the wood. This is the part of the report that can affect the loan.
A clear Section 1 report is called a termite clearance, the document showing the property is free of active infestation and untreated damage. In California, a clearance letter is treated as current for 90 days. If escrow runs past that window, the lender will usually order a quick re-inspection.
Section 2 means the inspector found conditions that could lead to infestation or damage if nobody fixes them. Nothing is actively wrong yet. These are the hotspots.
Picture wood siding that a sprinkler head soaks every morning. The wood still has its structural integrity, but left alone, that moisture invites dry rot. The inspector flags it as Section 2. If it's ignored long enough, it graduates to Section 1.
Section 2 items rarely block a deal, but your buyer should know about every one of them. Each item is a future repair bill with a date nobody knows yet.
Section 3 flags areas the inspector couldn't fully examine, like a crawl space blocked by stored boxes, an attic buried under insulation, or heavy vegetation against a rear wall. No problem has been confirmed there, but no problem has been ruled out either.
The usual fix is access. The seller clears the obstruction, the pest company returns, and the finding moves to wherever it belongs: a new infestation becomes Section 1, and a conducive condition becomes Section 2. Clearing Section 3 items early keeps the deal on schedule, because lenders want their Section 1 clearance after the hidden areas are checked, not before.
Who pays for a termite inspection is negotiable and gets decided in the purchase agreement, not by California law. There's no statute that assigns the bill.
That said, custom carries weight. In much of California, sellers customarily pay for Section 1 repairs because the lender requires that work for the buyer's loan to fund. Section 2 items are wide open to negotiation, and buyers often accept them as-is or ask for credits. The inspection fee itself runs either way depending on county custom and how the offer was written.
One loan-type exception worth knowing: on VA loans, the VA's Circular 26-22-11 (June 2022) allows the veteran buyer to pay the pest inspection fee, which used to be prohibited.
Whatever the split, write it into the contract. Sellers should also remember their disclosure obligations: a known infestation is a material fact whether or not a new report exists.
Lenders require a termite inspection only when the loan program or the appraisal calls for one, and the rules differ by loan type:
The pattern: Section 1 is the lender's concern. No lender holds up funding over a Section 2 sprinkler note.
A real estate termite inspection in California typically costs $100 to $200, with the official clearance letter for escrow adding roughly $75 to $100 on top. Size, location, and competition drive the spread.
Metro pricing trends lower in Los Angeles and Orange County thanks to heavy competition, while coastal and rural Northern California counties often start closer to $150.
Section 1 is now, Section 2 is later, and Section 3 is unknown. If you can explain those three words to a nervous buyer in one sentence each, you'll keep deals calm that other agents let spiral.
Termite sections, clearances, and contingencies all show up in exam questions and in week one of real practice. Get the US Realty Training exam prep package for unlimited practice exams that drill exactly this kind of material.
Real estate is not just the business of buying and selling homes—it's a business of dealing with people.
As a real estate agent, you will work with many different personalities throughout your career, and eventually, you will come across an indecisive client. So how do you help someone who struggles to make decisions?
In this article, we'll discuss several tactics and strategies to help you effectively work with indecisive buyers.
Indecisive buyers struggle with making decisions throughout the home buying process. Buying a home is one of the biggest investments a person can make, and while it is often an exciting time, it can also be overwhelming, confusing, and emotional. This combination of emotions can lead to indecisiveness, making it essential for agents to use effective strategies to help their clients navigate the process.
Indecisiveness can be caused by doubts, fear of commitment, or discomfort with the unknowns. Understanding the underlying causes of your client's indecision is crucial to guiding them through the process. Your role as a real estate agent is to help alleviate these concerns by offering support, clear information, and patience.
Patience is key when working with indecisive clients.
You might feel that part of your role as a real estate agent is to help your client make decisions more quickly, but pressuring them can have the opposite effect. It can deter them from making any decision at all. Instead, take a step back and allow your clients to move at their own pace. Buying a home should be an enjoyable experience—like savoring a fine dining experience rather than being rushed by a waiter. Let your clients take the time they need to feel confident.
Active listening is one of the most important skills for a real estate agent.
Being an active listener will help you better understand what your client is truly looking for in a home. Pay attention not only to what they say they want, but also to the underlying needs that may not be explicitly stated. For example, if your client changes their preference from a two-bedroom to a three-bedroom home, it may indicate they need flexible space—such as a loft or bonus room. Learning to read between the lines can help you offer options that meet their needs.
Indecision may also stem from fear or doubt. By actively listening, you can pick up on these emotions and address them directly. Invite your clients to ask questions, and offer thorough explanations to empower them with information. This will help alleviate anxiety and build confidence.
Clear explanations can help indecisive clients feel more comfortable with the home buying process.
One of the most effective ways to help an indecisive client is to explain the entire process in detail. Fear often comes from the unknown, and the more your clients understand, the less intimidating it will be. Address any questions they have and provide information on the steps involved in purchasing a home.
If financial concerns are contributing to your client's indecision, involve their lender in the conversation. Having the lender explain details about the loan process, payments, interest, taxes, and insurance can help alleviate some of the uncertainty. The more informed your clients are, the more comfortable they will feel moving forward.
When working with indecisive clients, too many choices can lead to overwhelm.
After listening carefully to your client, narrow down the properties that best meet their needs. When it comes time to show homes, limit the number of options. Presenting a smaller, curated selection of properties makes it easier for your client to make a decision. For someone who already struggles with decision-making, focusing on quality rather than quantity will help simplify the process.
Indecisive buyers are simply clients who need a bit more guidance. As a real estate professional, your knowledge and patience can help empower them to make decisions confidently. By being patient, listening actively, explaining the process, and limiting options, you can help your clients overcome indecision and enjoy the journey of buying a home.
In review, the following tactics can help with indecisive clients as well as all of your clients: be patient, be an active listener, explain the process clearly, and limit options.
If we think of a smooth, uneventful real estate transaction as a sunny day, then anything that hinders the effortless transfer of title, would be deemed a cloud. “Clouds” are any claims, unreleased liens, or documents that appear on a property’s title record.
Property buyers prefer clear titles and clouds make property title transfer more difficult. Additionally, clouds can create doubt about ownership or make a title difficult to insure or transfer until the issue is resolved. A clear title is a record that does not have material defects or adverse claims that would discourage a buyer or lender. (Note: many properties still have recorded items like easements/CC&Rs—those don’t automatically mean the title is “cloudy” if they’re expected and disclosed.)
The presence of clouds diminishes the value of the home. In many cases, clouds may deter potential buyers. Some clouds involve liens that must be satisfied or released; others are not “debts” at all (like clerical errors, boundary disputes, or unknown heirs).
Some common clouds on title records are as follows:
property is misfiled, misplaced, or omitted. For example, mechanic’s liens are common liens that are filed against a property’s title.
If a contractor is hired to complete work on a property, and they are not paid in full upon completion of the project, contractors can file a mechanic’s lien on a property through the county recorder’s office (rules vary by state). This lien allows the contractor to recover the unpaid balance.
Recent update: in addition to “classic” clouds, more real estate professionals are watching for deed/title fraud (forged deeds, seller impersonation, quitclaim deed fraud). These scams can create serious title problems that take time and legal work to unwind.
Clouds get discovered during a property title search. This generally occurs after accepting a real estate offer. Title companies will search many sources for documents related to a property. Examples include deeds, county land records, divorce cases, and bankruptcy records. This search will show all unresolved claims and encumbrances on the property title.
Title companies check that the seller has the legal right to transfer a property’s title. It is also a necessary step to determine the title company’s ability to insure the transaction.
Important clarification: there are two common title insurance policies—lender’s title insurance (protects the lender) and owner’s title insurance (protects the buyer/owner). Lender’s coverage is usually required with a mortgage, but it does not protect the buyer’s equity the same way an owner’s policy can.
Title insurance generally covers covered losses up to the policy amount for certain pre-existing title defects—coverage depends on the policy and its terms.
Properties with cloudy title records may not be insurable until the issues are cured, or the title insurer may require the issue to be resolved before issuing coverage. Additionally, mortgage lenders will halt the lending process until the title issues are resolved.
There are a few things property owners can do to avoid future clouds on title.
First, buyers should consider purchasing separate owner’s title insurance. During the closing process, lenders need buyers to purchase title insurance for the property. But, these policies usually protect the lender’s financial investment. If a title claim is successful in court, the owner, without an owner’s title insurance policy, could lose their down payment and accrued equity.
Additionally, an owner’s policy may help cover costs associated with resolving certain past title issues that weren’t discovered through the title search (depending on the policy terms). Real estate agents should encourage their buyers to buy a separate policy to protect their assets.
Property owners can enjoy creating detailed project contracts with contractors. Outlining project timelines, payment schedules, and payment records give both parties a clear paper trail of the agreement. This can reduce the occurrence of missed payments and mechanic’s liens.
Finally, property owners can avoid surprises on their titles. Checking the title record at the county recorder’s office keeps owners up-to-date on their status. This allows them to catch and resolve title defects as issues arise. (Some counties also offer deed/recording notification programs—worth enrolling if available.)
The process of removing a cloud on the title varies. Some are easier to remove than others. For example, to resolve a mechanic’s lien, the homeowner must contact the contractor to pay their balance. Then, the lien must be released (and typically recorded) so the public record reflects that it was satisfied. Similar liens, such as mortgage and tax liens, can be resolved this way.
Real estate agents need to be proactive when working with homes that have clouds on the title. For buyer’s agents, be sure to address the clouds on the title. Leverage this as a negotiation strategy.
For example, informing the seller, “I have a buyer who is interested in your home but they noticed there are clouds on the title. If they are removed, I have a buyer for you!” may motivate them to clear the home’s title in order to secure the sale.
For seller agents, be proactive and take a look at your client’s title report early on in the process. It is possible that the owner is not aware that their property has clouds. Therefore, checking with the title company is very helpful. If there are clouds on the title, agents can work with sellers to make a list of the fixable clouds. Together, they can come up with a strategy to resolve them.
Clouds on title are any unresolved issues that appear on a property’s title record. There are many types of clouds and their presence can make it more difficult to sell the property. That's because it can impair marketability or create doubt about ownership until resolved.
Title companies play an important role at this stage of the real estate process. They conduct title searches to ensure that the property in question has a clear title.
There are ways that property owners can avoid clouds on title. They can create clear worker contracts, check title records, and buy owner’s title insurance. Resolving clouds on title can be as simple as paying taxes or costly and time-consuming. Agents review the title record of a property with clients to help them make informed choices.
Quick answer: Becoming a real estate agent in California costs $622–$885 to get licensed, $600–$900/year to stay active, and $6,830–$12,880/year in business expenses once you're working full-time. License renewal runs about $422 every four years. All fees are tax deductible as business expenses.
The fees to become a real estate agent stack up. If you don't pay attention, the costs and fees will get away from you and burn a hole through your debit card. This article is meant to prepare you for your future real estate career — and at the end, you'll find 3 plans to help you afford these fees.
The cost of a real estate license varies from state to state. This is an estimate for California. There are 4 main fees to get licensed, totaling between $622 and $885.
Real estate school is a pre-licensing program that gives students the required educational material to take the real estate license exam. California has many pre-licensing courses. So, the cost of these programs vary. Online programs may cost less than in-person programs. But, they both come with different perks. To know which program to choose, ask yourself what you need to excel.
When you graduate from an accredited real estate school, you must apply to take the state exam. A real estate exam application fee is the cost to schedule your exam. In the state of California, this cost is $100. This fee will vary from state-to-state. So, check the Department of Real Estate’s website to know your state’s application fee. Our rundown of real estate exam fees by state lists what each state charges.
Live‑Scan fingerprinting: $49 state processing fee + $20‑$30 provider fee
One requirement for the State Exam is a fingerprint live scan, also known as a background check. People with a criminal history will have trouble passing the background check. Always be honest and clear when asked about your criminal history. As the saying goes, honesty is the best policy.
The real estate license fee is the final payment to get your license. This final fee may seem hefty, but the cost of a real estate license pales in comparison to the money you will make as an agent. After this payment, you will have your license in your pocket for whenever you want to use it.
Real estate agents pay annual costs to keep their active status. These fees come from two main sources: brokerages and membership dues. They give you tools, resources, and — with some brokerages — training. Expect to pay $600–$900 per year to stay active.
Brokerage fees, also known as desk fees, are the costs to hang your license at a brokerage. The reason why brokerages charge fees are because they give resources, tools, and training to agents. This includes insurance, legal resources, office supplies, internet, training, leads, and even coffee. Desk fees can vary based on your location. They can become more costly in populated areas.
A big part of your annual fees will go to your local real estate board. So, you might be wondering, “what is the purpose of the local real estate board?” This is where you get access to tools, resources, and other perks to doing your job well.
This includes membership into the National Association of REALTORS® and your state’s association of REALTORS®. You will also have access to the Multiple Listing Service (MLS). Finally, you get invitations to holiday parties and social events to expand your network. Your local real estate board connects you with the world of agents.
NAR membership costs approximately $201 per year ($156/year + $45 assessment). When you join, you adopt the designation of REALTOR®, showing clients that you are committed to a code of ethics and a higher standard of professionalism. If you do the full local-state-national package in CA, the combined fee is often $800–$900/year.
MLS access costs $500–$1,000 per year and is a vital resource when learning about and researching properties. The Multiple Listing Service is a data-driven database containing shared information from agents and brokerages about real estate listings across your market.
Business expenses vary from agent to agent — nobody knows how much you should spend on your business better than you. To calculate your total expenses, create a business plan to identify where your budget should go. The costs below are derived from the average agent's expenditures, totaling $6,830–$12,880 per year.
Advertisements come in different shapes and forms. They can be ads on social media, newspapers, and search results. Advertisements are effective. They can boost your leads with speed and ease. Because of that, they can be expensive. Weigh your options and understand your market, because they can be a worthwhile investment when used right.
From starting your website to the occasional maintenance cost, your website can come with a hefty price tag. Not all websites need complexities. You will realize the more intricate your site is, the more expensive it is. Some agents can do a lot with little. Before you make a website, know what you want and build around this.
Business cards are how people remember your services after a meeting. The classic card stock is cheaper in comparison to a ritzy gloss stock. So, when it comes to deciding on business cards, know the message you want to send. Business cards help people remember you, so the style, design, and integrity of the card should compliment you.
One unspoken cost for real estate agents is the travel. Agents drive a lot. So, they will have to afford car insurance, gas, and car maintenance. If they don’t own a car, then they have public transit expenses. Additionally, there are plane tickets or other modes of transportation for national events, if applicable.
Open house expenses include signs, drinks, snacks, and other nice amenities. This budget category can be wide or small depending on what scene you want to set for open house visitors. Consider the cost of signs, though. Signage can burn a hole in your budget because of their unexpected price.
If you turn your house into your private office, then expect to pay office expenses. These vary from the internet bill to folder dividers depending on your office (and organization skills.) Some agents can avoid the recurring office expenses by working from their brokerage. Offices and work areas are sometimes provided to agents through their desk fee payments.
Every 4 years in California, you must renew your real estate license by completing a continuing education course and paying the renewal fee. This is because practices change in real estate — the renewal requirement keeps agents current with the industry. Total renewal cost is approximately $422.
A real estate agent continuing education course is required to renew your license. The curriculum requirements are 45-hours of studying and you must pass the online quizzes and final exams. CA Realty Training offers an online continuing education course that you can complete in as little as 6 days. Other programs vary in their accessibility, cost, and program.
To renew your license, you must provide proof of completing the continuing education course and pay the $350 fee for salesperson in California. Afterward, you don’t have to think about renewal for another 4-years. If you are late for the renewal, you could have your license suspended and the fee will increase. The late renewal fee is $525.
Without business expenses, the immediate fees to become a real estate agent in California range from approximately $1,486 to $2,099. Here is the full breakdown:
The cost of entry in real estate is a challenge for some people — jobs don't usually expect you to pay thousands of dollars to work. But this price tag pales compared to how much you can earn. With California's 2025 median home price around $786,107 (Zillow), an agent earning a 2.5% commission makes approximately $19,653 on a single transaction — more than enough to recoup all startup costs.
There are several ways you can finance the costs and fees to become a real estate agent. The real estate licensing charges is a small price to pay for the money you will earn as a real estate agent.
One reassurance is that these costs and fees are tax deductible. These fees will also pay for themselves within the first transaction you make. Also, you can supplement your income with a part-time job or you can save up the money working another job. Here are the way you can afford the fees to be a real estate agent:
As a real estate agent, you run your own business. You are an independent contractor. In other words, you are the CEO of yourself. So, the expenses you accrue to help you do business become business expenses.
Oftentimes, you can offset the fees and costs to be a real estate agent during tax season. Your business expenses become tax write-offs. They do not exist as expenses you financed once and forgot.
So, what qualifies these tax write-offs? They can be your pre-licensing education, brokerage fees, and business expenses.
The money you earn from your first commission check will make up for the money spent to become an agent. According to Zillow.com, the average home price in California for 2025 is $786,107. An agent, who earns a side 2.5% commission, will make $19,653.
The first transaction will finance the entry costs and then some. You can also put that money towards the business expenses that you start to accrue. The more real estate deals you close, the more your finances compound.
Learn more about how a real estate agent commission works.
Supplementing your income with a part-time job is a common way people become real estate agents. People who work as a part-time real estate agent have a guarantee of income. When you are a full-time agent, your only income stream is your ability to close deals. So, you can lessen the burden and the entry costs with another job.
The downfall of this is the time investment. As a part-time agent, you will have to focus on the quality of your hours over the quantity of your hours. In other words, you have to make the most of your time.
Now that you know the cost to be a real estate agent, you can make a savings goal. Anytime you make money, you can tuck away a bit as a nest egg. This will let you “go all in” on your education and career.
But, if you plan on working full-time, you should save money before pursing a real estate license. The recommended amount to save is at least 3-months worth of living expenses in addition to finance the fees to be a real estate agent. This will give you a healthy cushion that will finance your lifestyle in case you do not find a deal right away.
Money is a big conversation topic. The entry cost to be a real estate agent is high and the cost of a real estate license is only the start. From the outside looking in, it can seem the cards are stacked against you. The best thing to do is take it slow and be smart.
How you manage your money will determine your success. You can make this job work–even as a part-time agent. Be honest with yourself and make a business plan.
Now that you know the fees to be a real estate agent, the only thing left to do is to become one.
How much does it cost to get a real estate license in California?
Plan on about $622–$885 total: $150–$400 for pre-licensing school, $100 for the state exam application, $69–$79 for Live-Scan fingerprinting, and a $350 four-year license fee.
What are the yearly costs to keep a real estate license active?
Expect roughly $600–$900 per year — around $100 in brokerage desk fees plus $500–$800 for combined local board, state association, NAR dues, and MLS access.
How often do I renew my real estate license and what does it cost?
California salesperson licenses renew every four years. Budget about $422: a 45-hour continuing education course (~$72) and a $350 renewal fee. Late renewal costs $525.
Are real estate licensing fees and business expenses tax deductible?
Yes. As an independent contractor you can generally deduct pre-licensing education, exam and license fees, dues, marketing, travel, and other ordinary business expenses on your tax return.
How much should I budget for real estate business expenses in my first year?
Full-time agents often allocate $6,830–$12,880 for marketing, website, travel, open-house staging, and home-office costs, though actual amounts depend heavily on your individual business plan and market.
Will my first commission check cover the startup costs?
Very likely. With California's 2025 median home price around $786,000, a 2.5% commission yields about $19,650 — easily offsetting all initial fees and funding your future marketing budget.
We all know that building great relationships is beneficial.
They lead to deep and meaningful connections that create better friendships, stronger family ties, and can even help in business.
At its core, real estate is the business of working with people. It’s important to know how to set up and maintain a good foundation with your clients. Better relationships mean a better overall experience that will lead to more sales and referrals.
First, let’s discuss some ways you can start building relationships that last beyond the first transaction. We will then cover the 6 ways on how to maintain those relationships for lifelong clientele.
Listening is fundamental in creating a good working client relationship. Many agents are not in the habit of really listening to their client. Practicing this skill of active listening will give you insight to your client’s needs. It will let you know what they want and more importantly what they don’t want.Buyers may not always know how to communicate what they want, especially if you are working with a first-time home buyer. Listening will help you narrow down the field and help get them in their perfect home.
This may also be the case when working with sellers.
For example, you may be working with a seller that doesn’t want to hold an open house or place a “For Sale” sign in their yard. Perhaps they are not comfortable with strangers in their home. Maybe they don’t want to advertise to the rest of the world that they are selling for personal reasons.
As a real estate professional, you would still want to advise your client why this wouldn’t be the best approach in selling their home. If your seller still insists, then listen and respect their decision.
It’s then up to you to get resourceful and explore other avenues to get the home sold.
Open communication is key when working with clients.
If you are working with sellers, make sure you are being open and honest when it comes to the condition of their property. This will set the right expectations about how quickly you can sell their home. Especially if there are issues that need to be addressed first.
Be sure to communicate everything that is positive before addressing trouble areas.
A home is a personal place. This will ensure you are being objective and less likely to offend your homeowner.
Follow Up
Remember to follow up with your clients. There are many real estate agents in the field and you want to make sure that your client feels that they made the right choice with you. Be thorough and get all their contact information. This will make following up with them easier.
Here are some great examples on how you can follow-up with clients:
Another great way to create a better client relationship is to get personal. Don’t worry! You won’t be crossing any lines you shouldn’t.
We’re talking about things like finding out when their birthday is. Do they have pets? Do they have children?
Talking with your client about these areas of their lives creates rapport and connection. It is also a great way to tie in this information with your follow up. It gives you a purposeful reason to reach out.
Once you establish a good relationship it’s important to know how to maintain them.
Now, let’s take a look at some powerful ways to maintain the relationships you create. These are fundamentals ideas help foster and flourish a client relationship you have already created with people.
A meaningful way to express appreciation is with gift giving.
A gift given to a client that relates to them personally is a wonderful way to go above and beyond. As discussed before, you can base this gift on the information you already have on your client.
A great time for gift giving can be to celebrate certain milestones, like the closing of their first home. To maintain this, you can continue to send a gift on their home anniversary.
Another appropriate time can be on their birthday. Flowers or gift baskets are an easy and convenient way to show that you care and are thinking of them.
Remember that the gifts do not have to be extravagant. A simple gift card to their favorite coffee shop or restaurant is a thoughtful gift that would be appreciated.
Unfortunately, we can all fall prey to the philosophy of “out of sight, out of mind.” With so many real estate agents to choose from, it’s important to have your clients remember you in the future.
How does your own branded real estate magazine sound?
There are companies that create the content. They will then brand your image and information within the issue. They then send it directly to your client. You stay top of mind while also providing something of value.
Don’t undervalue the simplicity of a handwritten note or card to keep in touch with your clients. This is a thoughtful way to keep in touch with your clients and have them remember you.
All the important dates and information that you have on your clients should go into a CRM database. CRM stands for “customer relationship management” and does more than store the data.
It is designed to help you take action on the important dates and milestones. A good CRM database system can schedule emails and remind you of those important dates, like birthdays. It can help you create action plans for following up with potential leads and then automate them.
In short, a database will store data and a CRM helps you manage the data within it to take action.
If your client invites you to their family event or gathering, make sure you make the time to attend. Declining may jeopardize the connection you have already made with your client.
You may not be able to attend every event, but make the effort. Making an appearance is better than skipping the event entirely.
Remember, all your client’s events are opportunities to make new connections with their friends and family. Don’t miss out on the introduction to your client’s friend or family member that was ready to buy or sell.
Let’s go over how you can maintain a client relationship. That’s easy. Talk to your client about what matters to them in real estate!
Whether you have first time buyers, sellers or investors keep the topics relevant. So save the market data and stats for the investors.
LEAD GENERATION TIP:
This is also a great way to get new leads. It’s natural to talk about what you do for a living. So no matter where you are or who you meet, make sure to talk about that open house you had or the new listing you recently got.
If you have a name badge, wear it! It will create an opening for a conversation about real estate. It may also lead to an opportunity to gain a new client.
The best relationships are those that aren’t forced.
Great relationships are organically formed when you involve good listening and communication. Once that client relationship is built, you can maintain them by continuing to be authentic and genuine.
People will pick up on the sincerity. They will be more likely to give you their continued business and refer you to others as well in the future.
Remember that you are dealing with people first, not businesses. This will go a long way in initially establishing good a client relationship.
Actively listen to your client and have good communication. Once you establish connection, make sure you follow up in a timely manner. Don’t be afraid to get personal and ask what interests your clients. This will make for more meaningful conversations.
When it comes to maintaining a client relationship, just remember to treat your clients as you would want to be treated. You’ll have clients that will last a lifetime.
When you have scheduled your real estate exam, you will need to prepare to pass it. One of the best ways to study for the California real estate exam is with guided, focused teaching. In other words, one of the best ways to study is with a crash course. So, what is a real estate crash course?
A real estate crash course is a short, focused review taken close to exam day. It helps you concentrate on the concepts the exam is most likely to cover, sharpen your recall, and walk into the testing room with more confidence.
A real estate crash course is best for students who have already completed, or nearly completed, their pre-licensing education and are getting ready for the state exam.
It can also be a strong option for students who want more guided teaching, need help narrowing their focus, or want a structured review right before test day.
If you already know the basics but want help putting everything together, a crash course can help you hyper-focus on the concepts most likely to appear on the exam.
This is especially helpful when you are close enough to test day that confidence, recall, and strategy matter just as much as raw study time.
You should use a real estate exam prep course and a real estate crash course as close to your exam date as possible.
This will fortify what you have learned so you feel confident stepping into the testing room.
We recommend studying for 60 to 100 hours or for 6–8 weeks.
A crash course works best near the end of that study period, when you are reviewing what you have already learned and preparing for the final stretch before test day.
An exam prep course can help you remember everything you learned before the exam. They are multiple-choice practice tests that simulate the exams administered by the Department of Real Estate.
These practice tests have questions that cover the 7 categories of learning required by the Department of Real Estate:
Click here to see the Department of Real Estate’s examination description and outline.
The bank of questions will change each time you take the exam to test your knowledge. They are as close to the state exam as possible, so you will experience an idea of what to expect come test day.
Another benefit of the exam prep practice test is how you can take them by category. This will help you test what areas you mastered and the categories you need to study.
What else is usually included with an exam prep course? Flashcards!
Don’t underestimate the usefulness of flashcards. Real estate has its own language and flashcards are a great tool. Use these to keep up with the terminology to give yourself a better understanding of topics.
You’re at a crucial moment right before you take the state exam. Think of the exam as your final destination. If the exam prep is the map, then the real estate crash course is the navigation of the map.
Although you are not expected to know everything, there are concepts you can be sure the exam will cover. The real estate crash course lays out a blueprint to follow so you can hyper-focus on these concepts. Crash courses are over 2-days for a full 8-hours (16-hours total) so you can immerse yourself in the material.
A crash course can serve as your exam-day playbook.
Yes—if you’ve finished, or nearly finished, pre-licensing and want a fast, instructor-guided review right before test day. You’ll refresh likely-tested topics, sharpen timing and strategy, and get answers to tricky questions.
A crash course is not meant to replace all of your studying. It works best as a focused review that helps you pull everything together right before the exam. That makes it especially valuable for students who want:
Because it’s the highest-leverage part of your study plan, a crash course can help you convert the hours you’ve already put in into more test-day certainty.
What makes it especially valuable:
Crash courses can be offered in different formats depending on your schedule and learning style. You may be able to attend at a location, join a live webinar, or use a video crash course if you need more flexibility.
The main goal stays the same: a focused, guided review of the material right before the exam.
No. A crash course is not meant to replace exam prep or your full study plan. It works best as a final review that helps you focus on likely-tested topics, strengthen recall, and improve confidence right before test day.
Yes. A crash course can help first-time test takers organize what they have already learned, focus on the most important topics, and feel more prepared going into the exam.
Yes. If you did not pass on your first attempt, a crash course can help you review weak areas, rebuild confidence, and approach the exam with a clearer strategy.
You can never be too prepared before taking the state exam. A real estate crash course can be a smart final step when you want focused review, structured teaching, and extra confidence before test day.Use your study tools together. Practice exams can help you test your knowledge, while a crash course can help you focus on the concepts most likely to matter when it is time to sit for the exam. For California students who want to compare live, webinar, or video options, you can explore upcoming crash course options here.
It can happen to anyone. In an instant, no matter what you do, you find yourself in a real estate slump. It can be difficult to get out of and can mess with your mental state.
This comes with the territory as a real estate agent. It’s hard when you depend on yourself for your next deal.
But, don’t panic!
We discuss the methods you can use to help break the real estate slump in this article.
Start with the notion that you can choose to have the right attitude. You can’t change adversity, but you can change how you decide to react to adversity. That’s powerful when you put it into practice.
Let’s face it. When your actions don’t yield results, becoming depressed and wanting to quit is very easy. This can make you question your capabilities and your choice to become a real estate agent. However, don’t give in to these negative emotions and thoughts. Remind yourself that not having constant deals is normal in real estate.
You may have heard over and over again that the right mindset helps you become successful in real estate. That same positive mindset helps you get through difficult times as well.
Daily affirmations are a great way to keep you in the right state of mind. These should be short, simple, and motivational to help you stay on track. Say them before starting your day or put them up in your workspace as a visual reminder. “I have a natural talent for real estate,” is a great one to start with.
Now that we covered the ways you can handle your mental state through a slump, let talk about the business side. Or more accurately, the lack of business...
When you don’t have an upcoming deal and you don’t have leads in the pipeline, that’s when most agents panic. When the panic starts, the slump begins. The next step is to work on your database. This is the source of your potential business.
Your database is your lifeline. As long as you keep adding to your database you will have deals to pursue. However, if you contact your entire database and you still come up short, that means one thing: It’s time to add more people.
Your slump feeling can be deceiving. Real estate is a numbers game–it’s all about converting leads. Some leads can take months to convert into deals. However, when all your leads take months to convert, well you start identifying it as a slump.
Remember, when you’re in the thick of it, every “no” leads you to a “yes.” These will potentially become future deals if you continue with your lead follow-up. Lead follow-up is as important as getting leads and growing your database. If you are diligent, you can end up having an amazing year. Then–just like that–your slump is over.
Sometimes, changing where you work can make all the difference.
Getting into a rut can put you in a slump. A rut is the habit or pattern of behavior that becomes dull and unproductive but is hard to change. If what you are doing is not giving you results, it’s time to change things up a bit. Starting with where you work.
Let’s say you work from home. There are advantages to working from home. For example, having no commute and focusing on calls. But, you are also isolated and have to rely on yourself for motivation. After a while, this can take a toll on you mentally–especially if you are not seeing results. So, make a change and start taking yourself to the office.
Your office can be a great place to change up your routine. When you work from the office you have the advantage of feeding off your coworker’s energy and networking with others. Start some healthy competition and see who can make the most contacts in an hour.
This is the idea: Generate activities to keep you motivated, on track, and in your head in the game.
Maybe the opposite is true for you. If you work from the office and you feel unproductive, take a moment to reevaluate your surroundings. Is your office dark? Are you surrounded by negative coworkers? If this is a constant, consider changing offices.
The bottom line, look for ways you can change where and how you do work. This change can inspire a creative way out of your career hole.
Well, they say having a plan is the best preparation for anything. Knowing that there are steps you can take, even in the middle of a real estate slump, is reassuring.
We talked about having a positive mindset, digging deep with your database, and changing your environment. These measures help you deal with a real estate slump.
When practiced daily, these measures are preventative.
Remember, that even the best agents fall prey to a real estate slump. It’s not the slump you should worry about, but the way you react to it.
What other habits helped you out of a real estate slump? Share them with us!
Becoming a real estate agent in California isn’t a dream only reserved for United States citizens.
You can be a real estate agent in California if you are not a U.S. Citizen. People ask us all the time about the real estate licensing process.
One common question that international students ask is, “Do you have to be a U.S. citizen to get a real estate license in California?”
The short answer: No.
But that doesn’t mean that anyone without citizenship can get their real estate license. You must follow specific requirements to become a real estate agent in the United States.
Let’s discuss how to get your United States real estate license if you’re not a citizen. But, first, let’s look at how you can get a real license without being a citizen in California.
The state of California discovered people were practicing real estate without a license. Moreover, these people were not citizens.
This was because prior laws made getting a real estate license difficult for non U.S. citizens.
When people practiced real estate without a license, they were doing so under the table. This made transactions untaxed and risky.
Therefore, new laws were created to motivate people to get a license with proper training.
These laws protect people from being denied a license based on their citizenship status. So where did these laws begin?
It all started with the introduction of Senate Bill 1159.
Senate Bill 1159 was introduced and signed in 2014 to amend sections of the Business and Professions Code, Family Code, and the Revenue and Taxation Code relating to professions and vocations.
SB1159 changed the legal presence requirements to obtain a real estate license in California.
Removing the legal presence requirement means that applicants are no longer required to prove U.S. citizenship or legal alien status.
Before, license applicants were required to have a Green Card. A Green Card allows you to live and work permanently in the United States.
Without one, you could not apply for a real estate license.
Senate Bill 1159 was the stepping stone that allowed people to apply for a real estate license.
Although, the bill didn’t stop some agencies from asking for citizenship status when issuing a license.
Then in 2018, Senate Bill 695 was signed (with provisions effective July 1 2019)
This bill prohibited the Department of Real Estate (DRE) and other agencies from gathering information on the applicant’s citizenship or immigration status
Additionally, Senate Bill 695 disallowed using status as a basis for licensure. In short, this protected non U.S. citizens from being denied a license.
Although non U.S. citizens no longer have to show proof of presence, they still have to meet certain requirements:
An Individual Tax Identification Number is a tax processing number issued by the IRS to people who do not have a Social Security Number but are required to pay taxes.
People who would receive an Individual Tax ID Number include certain nonresident and resident aliens, their spouses, and dependents.
While California no longer asks about citizenship or immigration status, real-estate licensing rules still vary across the country. A growing list of states—most recently Washington, which adopted SHB 1889 effective July 1 2024—now let applicants use an ITIN and expressly forbid boards from denying professional licenses based on immigration status.
Elsewhere, the gate is open but narrower: New York, for example, welcomes non-citizens but requires you to supply a Social Security Number or, if you do not have one, a written explanation with your application.
Many states (Texas, Florida, Illinois, and others) still follow the older model: you must prove lawful presence and provide an SSN, and some will ask for additional documentation such as work authorization.
If you meet the requirements above, you are eligible for a real estate license in California.
But, before you can apply for your license, you have to take the required pre-licensing courses.
CA Realty Training has programs available to help you complete this requirement. We understand that not everyone learns in the same way. Therefore, each program offers its own advantages depending on how you learn:
These courses are online and completed at your own pace.
The only regulation by the Department of Real Estate is that you have to spend at least 18 days per course (not maximum).
Additionally, you must take one course at a time. Therefore, you can complete the program in 54 days.
If you are self-motivated and learn best by reading, this program is a good choice.
PROS: Self-paced, fastest program, best for reading/writing learners
This program has supplemental videos that add to the Online Program.
The videos are recordings of our in-class sessions featuring our head instructor. These videos supplement your online course reading.
The videos don’t cover everything in the chapters. But, they highlight important concepts and key terms as well as offer examples on how to apply them.
PROS: Self-paced, fast program, video resource, best for visual/auditory learners
For those that need support and guidance, we have a Live Webinar + Online program. Real estate agent trainers lead this 3-month program.
The live webinars are supplemental training designed to supplement your online courses.
Therefore, it gives you an educational environment. Here, trainers teach material based on their professional experience and the topic’s relevance.
PROS: Scheduled, interactive, best for visual/auditory learners
These new laws have given non U.S. citizens a path to becoming real estate agents.
Not being a U.S citizen is no longer a roadblock to becoming a real estate agent. So as long as you have the proper identification, you can take that first step and get your license.
Stop trying to sell every home to every buyer. The agents who grow fastest pick a real estate niche, plant a flag, and let the whole market know what they do best. A generalist competes with every licensee in town. A specialist competes with a handful.
This guide covers what a niche is, why specialists win more business, 12 real estate niche ideas sorted by type, and a five-step framework for how to find your niche in real estate, even if you got your license last week.
A real estate niche is the specific client type, property type, or area you build your business around. Think "VA buyers near the base" or "downtown condos," not "anyone who needs a house."
Real estate works like medicine here. A new doctor doesn't practice everything. She picks cardiology or dermatology and becomes known for it. Your license lets you sell any property in your state. Your niche tells the market which one you know best.
Niche selection is also Layer 1, the foundation, of the USRT Agent Brand Stack. Every layer above it, from your message to your content, gets built on the niche you choose here. Get this decision right and the rest of your brand falls into place.
Niche agents out-earn generalists because clients choose the specialist when one exists, and specialists face fewer competitors for every lead.
Picture a buyer hunting a beachfront condo. One agent sells "all of Southern California." The other agent's entire website is beachfront condos. Both hold the same license, but the buyer calls the second agent. Perceived expertise wins the phone call, and repeated phone calls become a business.
The competition math matters even more. Thousands of agents chase "homes for sale" in your city. A handful chase probate sales or farmland. In the smaller pond, you become the big fish faster.
Referrals compound inside a niche, too. Military families refer other military families. Investors swap agent names at meetups. Serve one group well and that group starts marketing for you.
Luxury homes, commercial buildings, and investor clients pay the most per closing, while niches like first-time buyers pay through steady volume.
Run the example math. A 3% commission on a $2 million listing is $60,000. The same 3% on a $300,000 starter home is $9,000. But the luxury agent might close four deals a year while the starter-home agent closes 20. Match the model to your savings account and your patience.
Niches fall into three buckets: the client you serve, the property you sell, and the situation you solve. Here are 12 real estate niches worth a look:
Your state reshuffles this list. Ranch land is a career in Texas and a curiosity in Boston. If Texas is your market, start with the best real estate niches in Texas. And if you hold a professional designation, some niches reward it directly. See the top real estate niches for accredited professionals.
You pick a niche by matching what you already know to what your market data supports, then testing the match for 90 days. Here's the five-step framework:
Interests, data, competition, test. If a niche passes all four filters, you've found your lane.
A niche never requires you to turn down a deal, because it's a marketing focus, not a limit on your license.
Your neighbor can still hire you to sell his ranch house while you market to condo buyers. Take the deal. The niche decides where your ad dollars, content hours, and prospecting energy point. It doesn't decide who's allowed to hire you.
Think of your niche as the sign above your storefront, not a fence around it. The sign pulls in the right strangers. The door stays open for everyone else.
Specialists grow faster because they pick a smaller fight and win it. Choose the client you understand, confirm your market holds enough of them, test for 90 days, and let the results vote. You can widen your niche later, and you can switch it. What you can't do is stand out while marketing to everyone.
Ready to go deeper than marketing? Get certified in your lane. US Realty Training's career courses include the Certified Investor Agent Specialist (CIAS) for agents who want investor clients and the Certified Commercial Real Estate Specialist (CCRES) for agents headed into commercial. Explore US Realty Training's career courses.
A real estate license lets you become a real estate agent, but it doesn’t guarantee a successful career. That’s where the hard work and tenacity come in. To make it easier for you to start your career in the best way, we outlined the 10 most important things you need to do after you get your real estate license.
After completing your pre-licensing education and getting your real estate license, the law requires that you work under a real estate brokerage. Because of this arrangement, brokerages play a crucial role in determining an agent's success. That is why one of the first things to do after getting your real estate license is choose the right brokerage to work under.
Finding a brokerage to work with for the first time may tempt you to choose one with low fees and commission splits. However, these brokerages offer less support than you need as a new agent. Here are the essential things to look for when finding a real estate brokerage.
Once you have found a real estate brokerage that is right for you, the next step is to interview with the brokerage. Setting up this interview is simple. All you need to do is get in touch with the brokerage, express your interest, and schedule a meeting time.
Treat real estate like the small business it is. Once you’re licensed, it’s a good time to map out your budget and create a simple plan for how you want to build your business. Start with a simple 12-month budget:
• Fixed costs: association dues, MLS fees, E&O insurance, cellphone, mileage.
• Marketing: website, yard signs, business cards, paid leads, mailers, social-media ads.
• Variable deal costs: photography, staging, lockboxes, client gifts.
Project your first-year income conservatively—many rookies close only 3–5 deals. Use that figure to calculate how much cash reserve you need to cover six months of expenses. Then map quarterly business goals (transactions closed, GCI, new prospects added) so you can track progress and adjust spending in real time. Our free checklist for your first 90 days lists the fees to budget for.
In real estate, your sphere of influence (SOI) is everyone you know, from acquaintances to family members. The sphere of influence is something that every agent has and can make use of. Once you get your license, make sure the people around you know you’re officially in real estate.
What makes your SOI so important is that most of your clients, at the start of your career, will come from the people you know.
To maximize your SOI:
A buyer or seller is more likely to hire an agent they know over one they don’t. So, when you have a big SOI, and they know you’re a realtor, the odds of finding a client from your network increase.
A real-estate board is a nonprofit trade group that exists to improve industry standards and business conditions. Two well-known examples are the National Association of REALTORS® (NAR) and the California Association of REALTORS® (CAR). This is also a good time to join the real estate boards and associations that can support you as you get started.
Why join?
• Only board members may call themselves “REALTORS®,” which instantly signals higher ethics and professionalism.
• You’ll gain a support network, legal hotlines, market stats, member-only forms, and deep discounts on tech tools, insurance, and continuing education.
• Membership adds credibility that can tip prospects in your favor.
How to become a REALTOR®
A $418 million antitrust settlement with NAR took effect on August 17, 2024 and reshaped buyer-agent compensation:
• A written buyer-broker agreement is required before you tour any homes. The contract must list services, length of the relationship, and how the agent will be paid.
• Listing brokers can still offer to pay buyer-agent fees, but that offer can no longer appear in the MLS. It must be negotiated privately.
• All compensation is now 100 percent negotiable. Buyers, sellers, or both can cover it, and many buyers roll the fee into closing-cost credits.
Why this matters to new licensees
Have a ready-to-use buyer-representation agreement and a clear script explaining the new payment options. That way you can start showing properties without delays or confusion.
One of the most practical things to do after getting licensed is get access to the MLS.
The Multiple Listing Service (MLS) is a private database established by cooperating real estate brokers to provide data about properties for sale. Real estate professionals also use it to assist their clients with buying and selling property.
The MLS is a vital resource for real estate agents. With MLS access, you can:
As you get started, it also helps to begin building your professional presence, and a website can be part of that.
Websites are an excellent way for agents to generate leads, establish their expertise, create brand awareness, and provide up-to-date information to the public. Here are several features that make an excellent real estate website.
When creating a real estate website, you can outsource to a web developer or handle the creation yourself.
This comes from top-producing agent, Richard Schulman. Richard runs a top .1% real estate team and has made more than a billion dollars in sales. He understood that lead generation is the most important thing a real estate agent can do. He created a system that let him deepen relationships, build trust, and book clients. He called this "coffee dates."
Richard set up 30-minute coffee get-togethers with contacts in his database. On a recurring basis, he would set up these dates with people he hadn't spoken to in a certain amount of time. When he got together with them, he would catch up and hear how they've been. Eventually the conversation would come back to real estate in which he would ask them if they need any services.
"Coffee dates" are a simple yet powerful way to find new clients. Either the person you meet needs help, they know someone who does, or you catch up with someone who will eventually need help. After you get licensed, this is a simple way to stay in touch, stay top of mind, and start creating conversations that can turn into business.This is a great way to stay top of mind and get a good caffeine boost.
By the way, we created a online video program with Richard. It's called From Rookie to Rockstar. It's a 6+ hour online video training program that teaches you how to find your first real state client, how to close more deals, and how to earn bigger commission checks.
You can join a team or go solo when you become a real estate agent. Below are a few pros and cons of joining a team:
If you still need help deciding if a team is right for you, consider what kind of leads you will have when you start your career. If you have an extensive network of people ready to buy and sell real estate or are willing to refer you to a family member or friend, joining a team might slow you down. Whereas if you have a smaller network, a team could help create a foundation for you.
This is an important decision early in your career because it affects the kind of support, training, and opportunities you’ll have right away.
A mentor is an experienced person who educates or gives help and advice to a less experienced person. Having a real estate mentor is always a good idea, especially when you are new to the industry.
After getting licensed, it helps to have someone experienced you can learn from and lean on. Your mentor can be anybody as long as the person has gained enough experience to guide you.
Your real estate brokerage may run mentorship programs to match new agents with experienced ones in your office for professional development. However, if they don't, you can just walk up to an older colleague and make your intentions known
Even after getting your real estate license, you need to keep learning and acquiring knowledge. That’s why one of the best things you can do after getting licensed is keep learning.
So seek out training classes that can help elevate your career. Typically brokerages offer training seminars for their agents to help them become better negotiators, learn about contracts, and establish good workflows.
Success in real estate requires motivation and resilience. Your "why" is your deeper reason for pursuing a real estate career. Whether it’s financial freedom, helping families find their dream home, or building a long-term investment portfolio, having a clear purpose will keep you focused during challenging times. As you get started, it helps to stay connected to the reason you chose this career in the first place.
Consumers expect quick answers and engaging visuals. Once you have the basics in place, tools like AI and video can help you stay visible and communicate more consistently.
You can use AI tools to help draft content and emails, and short-form video can help you stay top of mind with your audience. These should support your business, not replace the foundational steps you need to take first.
Price a listing too high and it sits. Price it too low and your client leaves money on the table. Comps are how agents land on the right number, and pulling good ones is a skill you can learn this week.
This guide covers what real estate comps are, the five places agents find them, what separates a good comp from a misleading one, and how a CMA differs from an appraisal. It closes with the two comp questions the licensing exam loves to ask.
Real estate comps are recently sold properties similar to the home you're pricing, used to estimate its current market value. Comps, short for comparables, are the sale prices of nearby, similar homes that serve as evidence of what buyers will pay.
Sold prices are the whole game. Listing prices show what sellers hope for. Sold prices show what the market said yes to. When you price a listing or write an offer from comps, you're backing your number with receipts, and clients trust a number with receipts.
A good comp matches the subject property on location, timing, size, and condition. The tighter the match, the more the sale price tells you.
Run every candidate through the USRT Good Comp Checklist:
Three to five comps that pass this list beat 10 loose ones. When two comps disagree, trust the one that matches on more factors, especially location and timing.
Agents find comps in the MLS first, then fill the gaps with title records, public data, and consumer portals. Five sources cover nearly every situation:
A CMA is an agent's comp-based pricing opinion, while an appraisal is a licensed appraiser's formal value opinion, and lenders only accept the appraisal. A comparative market analysis (CMA) is the report an agent builds from comps to recommend a listing price or offer price.
Both rely on the same logic: recent sales of similar homes predict value. An appraiser applies it with stricter rules, required adjustments, and a license on the line. Your CMA sets the price that attracts the buyer. The appraisal decides whether the lender funds that price. Buyers sometimes confuse the appraisal with the inspection, and we split those apart in appraisals vs. inspections.
A tight CMA also carries the pricing conversation. Sellers push back on feelings, not on five matching sold prices, and that's half of negotiating in real estate.
The exam tests comps through the sales comparison approach, and it loves one trap: which property gets adjusted. The sales comparison approach is the appraisal method that values a property by adjusting the sale prices of comparable properties.
The rule: you adjust the comp, never the subject. If the comp has a pool and your subject doesn't, subtract the pool's value from the comp's sale price. If the subject has a garage the comp lacks, add the garage's value to the comp. The subject's price is the unknown, so it can't be adjusted.
Expect the exam to also check that you know a CMA is not an appraisal, and that only a licensed appraiser can be paid to give a formal opinion of value for a lender. Comps sit in a cluster of terms worth drilling, and our 99 real estate vocabulary terms list covers the rest.
Comps turn pricing from a guess into an argument you can defend: same area, same size, sold last quarter, here's the number. Learn to pull them from the MLS, back-check with title and county records, and package them in a CMA that closes the pricing conversation.
Comps show up twice in your career: on every listing you price, and on exam day as the sales comparison approach. The US Realty Training Exam Prep package drills that approach, adjustment questions, and the rest of the tested vocab until none of it surprises you. Get the Exam Prep package and lock it in.
A new homeowner closed on her brand new house. Her realtor hands her the keys.
She’s excited to settle into her new home.
The house is pretty hot when she first walks in, so she turns on the air conditioning.
After a couple of minutes she realizes that the AC is blowing hot air.
The seller reported a completed requested repair a few days before closing. Yet, it’s clear that the job wasn’t finished. Now the new homeowner is stuck with a damaged AC unit and a repair bill.
Situations like this are avoidable when buyers and their agents perform a final walkthrough before closing.
The final walk through is an important step in the closing process.
Under the California Residential Purchase Agreement (C.A.R. RPA), buyers have the right to a Final Verification of Condition within the timeframe stated in the agreement—not as a contingency of the sale, but to confirm the property has been maintained and that agreed repairs are completed.
The walkthrough is an opportunity for buyers to ensure that the property is in the same or better condition than it was during their last viewing.
At this point, if repairs were negotiated, the buyer should request invoices/paid receipts (or other proof of completion) before the final verification.
The buyer and their agent perform a thorough inspection of the property to ensure that everything is in order.
Most buyers schedule the final walk-through within 24 hours of closing (often the day before or morning of closing) to minimize last-minute surprises.
Many home buyers are not sure what they should look out for during a final walkthrough. So, it’s important for agents to attend to make sure a thorough inspection is performed.
Most final walk-throughs take 15–60 minutes (plan longer for larger homes or if many repairs need verifying).
Agents often take notes and photos during the inspection. This is useful to have for their client’s records and for requesting last minute repairs.
The first items to assess during the final walkthrough are the requested repairs.
Once you have taken note of the repair status, begin inspecting the property room by room.
Creating a checklist is a good tool to keep track of the items to test in each room. Common checklist items include:
An inspection of the property’s exterior is as important, so be sure to walk around the outside.
Look for any signs of damage to the siding or roofing.
Additionally, notice if there are any significant changes to the land on the property.
Sometimes the sellers will remove items that sold with the house. Examples include landscaping or outdoor structures, like sheds.
Other items that were not sold with the house may be left behind. So, check out what is on the property at the final walkthrough.
As a home seller or listing agent, you can help make the final walkthrough process easier. Here’s how:
If possible, it’s ideal for the seller to move out of the house before the final walkthrough.
This makes property examination easier for the buyer. But, if moving out before closing is not an option, sellers should make the home available for the buyer.
It helps to remove or pack up as much of the personal belongings as possible.
Aim to complete the buyer’s request for repairs as soon as possible.
Keep copies of the service contracts and receipts. These will come in handy if there are any disputes with the contractors or buyers.
Once every repair is complete, the seller should perform their own final walkthrough. Testing every repaired item ensures that any remaining issues are caught before closing.
Also, if there are items missed during the home inspection, sellers will benefit from addressing those sooner rather than later. Examples include running toilets or leaks under the sink.
Professionals recommend sellers vacate the property before the final walkthrough.
But, if the seller has moved out several weeks before closing, they may not be able to keep a close eye on the property.
If the seller is still in town, it’s a good idea to check on the property once or twice a week to ensure the home is in good condition.
If the seller has moved out of the area, enlisting the seller’s agent, a family member, or close friend to keep an eye on the property is another option.
Completing the final walkthrough within a few days of closing is convenient. If new issues appear or the negotiated repairs are not complete, there is still time to address them.
First, the buyer’s agent needs to address repairs or other issues by reaching out to the listing agent.
Chances are these issues are fixable within a few days. But, in the event of larger problems buyers have a couple of options.
Some repairs take more time to complete.
In that case, the buyers may request to delay the closing. In other cases, the parties may agree to proceed with closing, but set up an escrow holdback account.
This account allows the lender to set aside part of the home loan to be released to the seller once the repairs are completed.
The lending company withholds more than the repair estimate.
This is to motivate sellers to swiftly complete the repairs.Repair timelines for escrow holdbacks are lender-specific, but commonly around 30–90 days (often “a few months”).
Lenders often over-reserve the holdback (for example, about 120% of the repair estimate; some VA loans may require 150%).
If the seller hasn’t maintained the property or completed agreed repairs, buyers typically address it before COE via repairs, credits, a brief delay, or an escrow holdback; cancellation is generally based on contractual non-performance or an active contingency, not the final verification itself.
This is more likely to happen if natural disasters, fires, or vandalism damage the property.
Generally the buyer and the buyer’s agent. Sellers don’t need to be present.
No. It’s a last check to confirm condition and agreed repairs—not a full inspection.
No. Under the current C.A.R. Residential Purchase Agreement, the buyer’s Final Verification of Condition is not a contingency of the sale. It’s a limited right to confirm the property is being maintained and that agreed repairs are completed, within the final verification time period stated in the contract (often referenced in the acceptance/timeframes section, depending on the RPA revision)
Options usually include getting repairs done before COE, negotiating a credit, a short delay, or a lender-approved escrow holdback (many lenders require about 120% of the repair estimate; VA loans often require 150%; timelines are commonly ~30–90 days).
Yes—best practice is to keep utilities on through closing so buyers can test systems and appliances; confirm this in your contract/instructions.
In California, fixtures (items affixed to the property) generally transfer unless excluded in writing (see Civil Code §660). The RPA also lists common fixtures included in the sale.
It’s not required, but if you need a pro to verify repair quality, coordinate access with your agent in advance; the walk-through itself isn’t a new inspection.
Your inspection report, repair addendum, seller receipts/invoices, a copy of the purchase agreement, and a phone charger (handy for outlet testing).
The final walkthrough is an important step in the closing process. The buyer has a last chance to review the property.
Sellers can ensure that they have met every obligation.
Conducting a final walkthrough on a house gives every party involved peace of mind. Also, it leads to a smooth transfer of property.
What are some of your tips and tricks for a successful final walkthrough?
When a home seller secures a buyer, the home will often go through two different evaluations: an appraisal and a home inspection. (Note: a home inspection is typically optional, and some loans may not require a traditional in-person appraisal.)
On the surface, appraisals vs inspections of a home appear to serve the same function. They both perform walkthroughs of the property.
But, they examine different parts of the home. They also report that information to different parties.
The lender vets the prospective buyer's ability to pay back a mortgage loan. While doing this, the lender ensures that the property is worth the loan amount.
So, the mortgage company sends a real estate appraiser to assess the value of the home.
(2026 update: depending on the loan and eligibility, the lender may use an appraisal alternative—like “value acceptance/appraisal waiver” or a hybrid approach—instead of a full traditional appraisal.)
The appraiser measures the size of the property and completes a property analysis. This includes comparisons to similar properties in the area.
Also, appraisers judge the home’s integrity. This includes:
On the outside, they want to make sure that everything is operable and well maintained. The appraiser isn’t focused on décor or design choices, but condition and maintenance can impact value.
They also make note of visible health and safety hazards. Examples include broken windows or loose banisters.
The appraiser compiles this information into an appraisal report. Then, they send the report to the mortgage lender.
Based on the information provided, the lender extends the loan offer.
That is if the property’s sale price is in line with the appraised value.
If the appraisal is lower than the asking price there are some options for the buyers and sellers. The buyer can ask for a price reduction in the list price. If the buyer has the funds and is willing to pay the list price, they can pay the difference in cash.
Instead of simply “ordering another appraisal,” the buyer and seller can ask the lender about a Reconsideration of Value (ROV) if there are factual errors (wrong square footage, missed upgrades, etc.) or strong comparable sales that weren’t considered. The lender may then request the appraiser (or valuation provider) to reassess the value based on that information, while following appraiser-independence rules.
A home inspection differs in scope from the appraisal. The home inspector does a thorough inspection of the space.
They inspect health and safety hazards as well as the integrity of every part of the structure. This includes:
The home inspection usually takes several hours. Once the inspection is complete, the inspector delivers their report to the buyer. The buyer can then use this information to gauge if they want to make the investment in the home.
They can also leverage the information to renegotiate the pricing of the home or other parts of the deal. This includes the closing costs.
Preparing for the home appraisal process is different from the home inspection process.
Here is what your client needs to know to make this process easier for the appraiser and inspector.
For homeowners, the appraisal process can be stressful.
The appraiser dictates the value of the seller's home. There are some ways that homeowners can prepare for the appraisal to get top dollar.
One of the best actions homeowners can take when preparing for a home appraisal is to declutter. The cleanliness of the home does not usually impact the appraisal value. But, a cluttered space makes it difficult for the appraiser to get a full, accurate look at the space.
Another suggestion is to perform cosmetic repairs or upgrades on the home.
For example, upgrading light fixtures, repairing a leaky faucet, or painting the walls. It is a good idea to keep a list of repairs and the receipts for the work completed to show to the appraiser. The homeowner may see some of their money invested reflected in the appraised value.
Homebuyers should consider who they hire to complete their home inspection.
Purchasing a home is one of the most important purchases people make. So knowing what you’re buying is important.
One of the best ways to find a quality home inspector is to ask for recommendations. You can start with friends and family. If they had great experiences with their home inspectors, they might recommend them.
Review ratings on the internet is also helpful. These ratings can help you find home inspectors near you.
Also, dedicated home inspectors are often members of local and state organizations. Checking the list of members near you is also a great strategy.
Once you have found some potential home inspectors, the next step is to interview them. You want to be sure that the home inspector has experience (for example, five years or more). Ask how long they expect their inspection to last and how detailed a report they offer.
Thorough inspections last several hours. It’s helpful to have an inspector who takes the time to inform you about the major issues that you need to address.
This could be through an extensive home inspection report or an onsite walkthrough.
Both home inspections and appraisals need professionals to assess the home. But, appraisers and home inspectors examine different things for different parties involved.
The appraisal protects the lender’s investment. They report on the property’s estimated value, which is typically based on market comparisons and the home’s characteristics (size, location, condition, upgrades, etc.)—not just “visual appearance.”
Home inspections help protect buyers (and can help sellers avoid surprises). Inspectors assess major and minor structural concerns with the property. This includes roofing, foundation, and plumbing.
If you’re asking how long it takes to get a real estate license in California, the most honest answer is: it depends on how quickly you finish your courses, when you submit your application, exam availability, fingerprint timing, and whether you pass the exam on your first try. California requires three pre-licensing courses, and because students must wait 18 days per course before taking the final exam, the minimum education timeline is 54 days.
For many students, the full process usually falls into a range like this:
That is why the better question is not just “How long does it take?” but also “What parts of the process control the timeline?”
In California, getting licensed is not one single step. It is a sequence: finish your pre-licensing education, apply, get approved, take the exam, complete fingerprint and background requirements, and then finish the final licensing process. The course requirement alone can be done in as little as 54 days, but the rest of the timeline depends on application processing, exam scheduling, and whether your file moves through cleanly without delays.
So while some motivated students may finish in roughly 3 to 4 months, a more typical range is 5 to 6 months from start to finish. Students who take longer to complete coursework, submit incomplete paperwork, or need a second exam attempt may take longer.
This is the education portion of the process. In California, this step takes at least 54 days because each required course has a minimum timing rule. For some students, it takes closer to 2 months. For others, it may take longer depending on how quickly they finish the coursework.
After finishing your courses, you submit your application to move forward in the licensing process. This step itself is simple, but the timeline depends on how quickly you apply and whether your paperwork is complete.
Based on California DRE’s current processing page, a typical application-processing window is often around 2 to 3 weeks, though delays can happen if there is missing information, a duplicate submission, or pending fingerprint items
Once approved, you can schedule your exam. The timeline here depends on available exam dates and how soon you are ready to test.
In practice, many students can often schedule within a few days to a few weeks after approval, since qualified examinees can self-schedule into available exam slots through eLicensing, sometimes even very close to the exam date. If you need extra study time or have to retake the exam, this step can take longer.
This is the final stage before your license is issued. Some students move through it quickly, but others experience delays if fingerprint or background processing takes longer.
A practical expectation is that this stage may add several days to a few weeks, because DRE cannot issue an original license until DOJ and FBI fingerprint reports are received and screened, and DRE notes that this part is not entirely within its control.
The full timeline can vary from one person to another because not every step moves at the same speed.
Some students finish quickly and move straight into the next stage, while others take longer because of coursework pace, paperwork timing, exam scheduling, or final processing.
Some people asking how long it takes to get a real estate license in California are really asking how long real estate school takes. That is only one part of the full licensing timeline.
In California, the required pre-licensing education can be completed in as little as 54 days under the minimum course timing rules. But finishing school in 54 days does not mean you are licensed in 54 days. After that, you still need to apply, get approved, take the state exam, complete fingerprint requirements, and finish the final licensing process.
The format you choose can also affect how long the school portion takes. Self-paced online real estate courses usually give you the most flexibility, which may help you finish the education requirement faster. Webinar or in-person classes often take longer because they follow a scheduled calendar, so your progress depends on the pace of the class rather than your own pace.
So the short answer is:
In California, this stage is usually shorter than many people expect.
Once you finish your required courses and submit your application, the next wait is for DRE to review it and clear you to schedule the exam.
As of March 9, 2026, California DRE was processing Sales Combo Exam/License (RE 435) applications received on February 25, 2026, which points to a queue of roughly 2 weeks at that snapshot rather than a blanket “up to three months” estimate.
After you are approved, you may be able to schedule your exam fairly quickly depending on availability. California DRE allows qualified examinees to self-schedule through eLicensing, including available appointments as late as 6:00 a.m. on the day of the exam, so this part may take anywhere from a few days to a few weeks depending on open test dates and how soon you are ready to take it
Passing the California real estate exam is a major milestone, but it does not always mean you are officially licensed that same day.
If you did not file a combo application, you still need to submit your salesperson license application after passing.
If you did file the combo application, DRE can move straight into license processing after you pass, which can save time.
Your license also cannot be issued until DRE receives and clears the required fingerprint and background reports. Because of that, the post-exam timeline is often several days to a few weeks, depending on whether your remaining items are already complete and whether fingerprint processing causes any delay.
Once approved, California DRE lets licensees print their license certificate through eLicensing rather than waiting only on mailed documents.
Getting a real estate license in California is not an overnight process, but it also does not have to take forever. For many students, the full timeline is usually several months, with the exact pace depending on how quickly they finish their courses, submit their application, schedule the exam, complete fingerprinting, and pass the test.
The key thing to understand is that the timeline is not just about finishing real estate school. It is about how long each stage of the licensing process takes from start to finish.
If you go in with realistic expectations and stay on top of each step, you can move through the process more smoothly and get licensed as soon as you are eligible.
In real estate, it is standard practice for different brokerages to represent the parties involved in a transaction to ensure the full protection of everyone’s interests. However, it is also possible for both the buyer and seller to be represented by the same real estate agent.
This article will help you understand what dual agency is, how it works, and give you insight into the controversies associated with it.
A dual agency is an arrangement where the buyer and the seller are represented by the same agent during a real estate transaction.
A real estate transaction will consist of a buyer’s agent and a listing agent. However, this is not the case with a dual agency, as both the buyer and seller work with the same agent.
For this to work, it is very important for real estate agents to fully disclose that they are working with one of the parties involved in the transaction before agreeing to work with the other party. If either of the parties rejects the idea of using a dual agent, they have the right to opt-out of the deal.
Before a dual agency can move forward, both the buyer and the seller must consent to the agent representing both parties. Even after consent has been given by both parties, the agent is legally required to remain neutral and keep all information about each party confidential.
Although dual agency agreements may appear as an easy and convenient option to carry out real estate transactions, there are still some disputes surrounding it, which has led to the banning of this practice in some states in the U.S.
One of the major issues with a dual agency is that most agents do not properly represent both parties to their fullest extent. In other words, they may prefer one party over the other. For example, the buyer could worry that the realtor intentionally keeps the listing price high because they want a bigger commission check.
Another problem is that some agents will give confidential information to the other party, hence breaking the ethical code of neutrality to both parties. Some of these questions include the value of the property for sale, how to come up with counter offers for the property, and how to dispute the result of an appraisal carried out on the property.
Investors often mistake the use of the terms designated agency and dual agency. While these terms might be similar in certain aspects, they describe different situations in real estate negotiations.
In a designated agency, different agents within the same brokerage are delegated to work exclusively with the different parties of a transaction.
In a dual agency, the seller pays the commission. In fact, this is the standard for all types of agencies because the commission is split between the listing agent and the buyer’s agent.
Although there is no standard commission rate, typically agents will make between 5-6% of the home’s listing price.
In the case where the buyer and seller each have different agents representing them, the agents will have to divide the commission in half. This means that each agent receives about 2.5% – 3% of the purchase price.
This is relatively similar to the standard practice in a regular representation structure where the seller pays the commission.
Realtors maintain a fiduciary duty to their clients, that is, they are expected to be loyal and work toward the best interests of their clients.
However, the following states have made it illegal to practice dual agency:
To this day, single agency is still the most common form of agency in real estate. But, when you do find yourself in a dual agency, it is important that the realtor maintains the integrity of their career by serving the best interest of both parties.
In real estate, it's all about getting the listing.
When marketed correctly, listings lead to sales. You have the listing, buyers come to you, they make an offer, and you get paid.
Having the listing is also a great opportunity to capture buyers who may not be represented by another agent.
So, it sounds like a no-brainer. Getting listings is the best way to get sales, right?
Well, not all listings are created equal. Sometimes, it’s smarter NOT to take a listing.
Are there really going to be time to walk away from a listing? The answer is “yes.” You’ll save yourself a lot of time and energy knowing the warning signs of a listing that is just not worth it.
Let's talk about some of those warning signs to look out for.
Here’s the scenario. You get a call from someone who’s interested in selling their home. You meet with them for a listing consultation. You take a tour of the seller’s home, discuss marketing strategies and what their property might sell for on the market.
The seller decides they want you to list their house. You’re excited about the prospect of getting the real estate listing until you hear the reason for selling...
We’re getting a divorce.
Ouch! This is a definite red flag. There are many things that can go wrong when you are dealing with a couple going through a divorce.
They may disagree on the real estate listing price or one spouse is unwilling to sell and both listed on the title.
If there is already tension between the two, this can make the process messy and uncomfortable. You will be spending a lot of time managing your sellers and putting out fires. This would not be the ideal listing to take.
Does that mean you reject a listing based on divorce? No. There are exceptions to every rule.
If you encounter a couple that is divorcing but amicable, by all means proceed with the listing. But proceed… with caution.
Sometimes a listing may appear to have all the right elements.
You find a happy couple, the property is in great condition, and the sales comparables predict a great market price.
Although, when you dig deeper, you discover that the sellers owe close to what it would sell for on the market. That means there is a very small profit margin.
This is another warning sign.
Not because you may not make much on the commission, although that is a consideration.
It’s because when sellers owe close to what the property is worth, it may turn into a short sale. A short sale is when the borrower or homeowner sells a property for less than what they owe on it.
The bank approves short sales and the selling process can be long and complicated. Not to mention stressful for both you and your seller.
So ask yourself if you are willing to take on a listing like this.
Here’s another scenario on a hot button topic: an overpriced real estate listing.
You meet with a seller and prepare the sales comparables. You share with the homeowner the price they would receive on the market. But the seller asks you to overprice the listing, substantially.
Now you have a very important decision to make.
Do you take this overpriced listing?
Some agents will take the listing in hopes that having their sign on the yard will lead to other listings.
They don’t realize that taking an overpriced listing can have negative effects. They figure that any listing is a good listing. As we’ve been discussing, this is not the case.
The fact is, most overpriced listings don’t sell. You will spend a lot of time, money, and effort on a listing that will just sit on the market. What generally happens is that this overpriced listing turns into an expired listing.
Another negative effect? Your reputation. As a real estate agent, you want to convey to potential sellers that if they list with you, their homes will sell fast.
Having expired listings will not instill confidence that you can sell your home quickly.
So are you ready to gamble your good name on the possibility of selling an overpriced listing?
Remember that you are a real estate professional. If a seller is not willing to sell their property at the price based on the numbers, it’s not a listing worth taking.
Yes, we all know that listings are the key to sales. Getting listings will have the buyers coming to you and will lead to a successful real estate career.
Success in real estate doesn't come from selling as much property as you possibly can but knowing which property to sell.
But we now know that not all listings are smart to take and when it’s smarter to walk away.
So, remember the warning signs:
Look out for them and realize it’s ok to take a pass. You are better off letting some else take on these risky listings.
Before we dive into how the term As Is applies in real estate, let’s talk about what this means as a basic concept.
When you buy an item As Is, it means to purchase something in the current physical condition. A seller can sell any item As Is. There is an understanding that no improvements will be made to the item. What you see, is what you get.
This is common among low to mid-level transactions, such as garage sales or used car sales.
In real estate, the term As Is applies to the purchase of a home but with some added provisions. The Residential Purchase Agreement (RPA) has clauses within it that protect the buyer. (Note: this article references the California Association of REALTORS® (C.A.R.) RPA, which is updated periodically—always confirm the current form your transaction is using.)
We’re going to discuss these sections to better understand why they are in the contract.
First, let’s circle back to the general description of purchasing an item in its current physical condition.
This would apply at a yard sale for example. You may purchase something and the item sells As Is.
There is no implied warranty for that item. That means you pick it up, pay for it, and it’s yours. Done deal.
Did you know that when you initially put in an offer to buy a home and it’s accepted, you’re purchasing the property As Is? This is technically true. To understand this, let’s look at the verbiage in the contract.
In the current C.A.R. RPA (for example, RPA Revised 7/24), the “As-Is” concept appears under Condition of Property on Closing (paragraph 7B). It states the property is delivered “As-Is” in its present physical condition as of the date of Acceptance, and the property is to be maintained in substantially the same condition as of Acceptance.
This means that the buyer should receive the property in substantially the same condition at close of escrow as when the offer was accepted (unless the parties agree otherwise in writing).
So, what exactly does this mean?
Let’s say during escrow, the seller accidentally spills something on the carpet causing damage, the seller would need to address that so the property is not delivered in a worse condition than it was at acceptance (subject to what your contract/addenda say). This is an example of how the As Is clause helps protect the buyer and why it’s in the contract.
Although, some buyers are concerned that the As Is clause means that they won’t ask the seller to make improvements or repairs.
This is not necessarily the case.
“As-Is” does not mean buyers can’t protect themselves before the sale of the home is final.
That is what the buyer’s Investigation of Property contingency is for in the current RPA. In many transactions, the Investigation of Property contingency is set to 17 (or another negotiated number of) days after acceptance.
The concept is very similar to buying a used car.
Before you pull the trigger, you can hire a mechanic to check out the vehicle from top to bottom to make sure it’s in good physical condition. This preventative measure protects your investment and ensures you are going to be happy with your purchase.
You can use the same approach in real estate and purchasing a property.
In the case of purchasing a home, the Investigation of Property contingency gives the buyer an opportunity to fully investigate the property within the time specified. This gives the buyer the right to perform inspections, review reports, and review disclosures to make sure there isn’t anything negative that might impact their decision to proceed with the sale.
Most notably would be the time frame to conduct the buyer investigation (commonly 17 days, unless changed).
Within the investigation period, the buyer may request that the seller make repairs if necessary, due to the outcome of this investigation. To be clear, the seller is generally under no obligation to agree to the buyer’s requests unless the contract/addenda require it.
If the buyer is not satisfied with the investigation results, the buyer’s protection typically comes from keeping the contingency in place (not removing it) and exercising their contractual cancellation rights within the applicable timeframes.
Also, many transactions include related “review” contingencies that can be 17 days after acceptance or a shorter window after delivery (whichever is later) for certain documents (for example, seller documents, preliminary title report, common interest disclosures).
Even in an “as-is” sale, California law reflects that the Transfer Disclosure Statement (TDS) delivery may not be waived in an “as is” sale (as held in Loughrin v. Superior Court).
So, “as-is” is not the same as “no disclosures,” and it is not the same as “buyer has no rights.”
So now you understand that buying a home “as is” really means with added provisions and protection for the buyer.
Those buyer protections come from (1) the RPA’s “condition on closing” language and (2) the buyer’s contractual contingencies (including the Investigation of Property contingency), plus (3) California’s statutory disclosure rules that still apply even when a property is sold “as-is.”
Real estate is sold as freedom and six-figure income. The reality is more nuanced, and most articles you'll find on this topic skip the math.
This is the no-fluff version. You'll get every real pro, every real con, current 2026 income data, and a quick verdict on who this career fits and who should pass. Already convinced? Start with our pre-license course.
The fastest way to gut-check whether real estate fits you is to scan both sides side by side. Here's the full list before we get into the math.
| Pros | Cons |
|---|---|
| Uncapped income potential | Slow, commission-only first year |
| Flexible schedule and self-direction | Post-settlement commission pressure |
| You're a business owner, not an employee | Constant rejection from leads and clients |
| A people-first, relationship-driven career | Crowded, competitive market |
| You help clients hit major life goals | Brokerage splits eat your gross commission |
| Full control over your growth and income ceiling | Difficult clients and counterparts |
| Low barrier to entry, no degree required | Real upfront costs before your first paycheck |
Real estate is a good career for self-disciplined people who can build relationships, handle rejection, and survive the slow first year. It's a poor fit if you need steady income, dislike sales, or expect quick wins.
That's the honest answer. Now the texture.
The agents who thrive are usually the ones who treat day one like they're starting a small business, not a job. They block time for prospecting. They follow up when nobody is asking them to. They show up to every open house with energy on hour seven. They get told no, and they call the next person without sulking.
The agents who burn out tend to share a different pattern. They wait for the brokerage to hand them leads. They confuse activity with progress. They get one slow month and start questioning the career instead of their pipeline. They run out of money before they run out of effort.
If you're reading this asking is real estate agent a good career, the better question is whether the daily activities of the job match how you naturally work. If "your income depends on conversations you initiate" sounds energizing, you'll likely make it. If it sounds exhausting, that's useful information.
| Question | Quick answer |
|---|---|
| Is being a real estate agent worth it in 2026? | Yes, if you can go 3 to 6 months without a paycheck and you're comfortable asking for business. No, if you need a steady salary right away. |
| How much do agents make in their first year? | NAR's 2024 Member Profile reports a median gross income of $8,100 for REALTORS® with two years or less of experience. Most first-year agents close 1 to 3 deals. |
| How long does it take to get licensed? | Most states require 60 to 180 hours of pre-licensing education and a state exam. Plan on 2 to 6 months from enrollment to active license. |
| Why do most agents fail? | NAR data shows roughly 87% of new agents leave the business within 5 years. The top reason is running out of financial runway, not lack of ability. |
| Do you need a college degree? | No. Real estate is one of the only six-figure-capable careers with no degree requirement. |
| What changed after the 2024 NAR settlement? | As of August 17, 2024, written buyer-broker agreements are required before showings, and offers of compensation no longer appear on the MLS. |
The first year is slow on purpose. Roughly 87% of new agents leave the business within 5 years, according to NAR data, and most of them quit because they ran out of runway, not ability.
A realistic month-by-month picture looks like this:
Build for 6 months of expenses before you start. For a deeper week-by-week breakdown, see our first year real estate agent survival guide.
The real benefits of being a real estate agent show up clearly once you sort the marketing from the math. Here are the seven that move the needle.
Your income ceiling is whatever you build. The U.S. Bureau of Labor Statistics reports a median annual wage of $56,320 for real estate sales agents (May 2024 data), with the top 10% earning more than $125,140. NAR's 2024 Member Profile puts the REALTOR® median gross income at $58,100, and top performers in luxury or high-volume markets clear seven figures.
Here's the math on a single deal. On a $500,000 home with a 2.5% buyer-side commission and a 70/30 brokerage split, you keep $8,750 before expenses. Close 12 of those in a year and you're at $105,000. Close two and you're at $17,500. The career rewards consistency, not luck. For a fuller breakdown, see our guide on how much real estate agents make.
You set your own hours. Flexibility in real estate doesn't mean working less. It means choosing when. You can take a Tuesday off for your kid's recital and replace those hours on Saturday. The trade-off is that the work follows you. Buyers want to see houses on weeknights and weekends, which is when most agents prospect, show, and close.
You're an independent contractor running a business under a brokerage's roof. That means you keep what you earn after expenses and split, you choose your niche, you decide who you work with, and you can write off legitimate business costs. Most agents underestimate this part of the job at first. The ones who treat it like a real business outearn the ones who treat it like a job.
Real estate is built on relationships, not transactions. You'll meet people in every life stage, from first-time buyers to retirees downsizing. The agents who win long term are the ones whose past clients pick up the phone when they call. If you naturally remember names, follow up, and ask good questions, this part of the job feels like a strength.
Most jobs don't end with a client crying happy tears in the driveway. This one does. Buying a home is one of the biggest financial decisions a person makes. Being the calm, competent guide through that process is a real form of meaning. It's also why repeat business compounds over the years.
Your income, your niche, your hours, your team, your future broker license, your investment portfolio. There's no manager deciding whether you "deserve" a raise. Your pipeline is your performance review. The flip side is that nobody is going to push you. If you don't naturally set goals and track them, this con becomes a pro the moment you fix that one habit.
You can be a fully licensed agent in 2 to 6 months without a college degree. Most states require 60 to 180 hours of pre-licensing education and a state exam. Compare that with becoming a doctor, lawyer, or even a registered nurse, and the on-ramp is short. We break this down further in our post on why a real estate career doesn't require a college degree.
Ready to start? Start your pre-license course and you can be testing within 90 days in most states.
Most articles tell you agents make six figures. The truth is most first-year agents close 1 to 3 deals and quit before the second year. Here are the seven cons you should plan for, not be surprised by.
Your income lags your effort by 60 to 120 days. You'll prospect for weeks before you sign a buyer. That buyer might take 30 days to find a home, 30 to 45 days to close, and then your commission lands minus the brokerage split. Plan for 6 months of living expenses in the bank before you go full time. NAR's 2024 Member Profile shows REALTORS® with two years or less had a median gross income of $8,100, which tells you exactly how front-loaded the difficulty curve is.
The NAR settlement took effect on August 17, 2024, and almost two years in, the market has settled into a new normal. According to NAR's settlement FAQ, two changes hit the day-to-day work hardest. First, offers of compensation are no longer published on the MLS. Second, agents working with a buyer must have a written buyer-broker agreement signed before touring a home.
What that's looked like in practice through 2025 and into 2026: total commissions have compressed somewhat, but less dramatically than predicted. Buyer-broker agreements are now standard paperwork in nearly every market. More buyers are negotiating fees directly. Agents who can articulate their value in a 30-second answer keep their commissions intact. Agents who can't are losing deals or closing for less.
The skill you need now, more than at any point in the last decade, is the ability to explain why your representation is worth what it costs. If you can do that on the first call, the settlement is a non-issue. If you can't, you'll feel it.
Most of your prospecting calls will end in no. Most of your open house visitors won't list with you. Most of your social posts will sit at three likes. The agents who survive year one have one trait in common: they don't take rejection personally. Every no gets you closer to a yes, and the math works that way once you track it. We dug deeper into this skill in our guide to talking to real estate clients.
Real estate has a low barrier to entry, which is great news for you and bad news for you. The California Department of Real Estate's most recent Sunset Report counts more than 400,000 active licensees in the state alone, and roughly 1.5 million REALTORS® are NAR members nationwide. New agents need to differentiate fast. We covered exactly how to do that in is becoming a real estate agent hard?.
You don't keep your full commission. New agents typically start at a 50/50, 60/40, or 70/30 split with their brokerage, and they pay desk fees, transaction fees, and E&O insurance on top of that. A $10,000 gross commission can land closer to $5,500 in your pocket after split, fees, and self-employment tax set-aside. Choose your brokerage on training and culture in year one, not on split percentage. Our guide to what a brokerage charges its agents breaks down where that money goes.
You'll work with people in stressful moments. Some will ghost you. Some will negotiate against their own interests. Some will fire you at the offer table. You'll also work across the table from agents who don't return calls, agents who lose paperwork, and agents who play games. Patience is a billable skill in this job, even when it doesn't feel like it.
You'll spend money before you make any. A realistic 2026 startup budget for a new agent looks roughly like this: $300 to $600 for pre-licensing coursework, $100 to $200 for the state exam, $200 to $400 in licensing and fingerprinting fees, $150 to $1,000 for local Realtor and MLS dues, $50 to $200/month for E&O and tech tools, and a few hundred more for headshots, signs, and marketing. Plan for $2,000 to $4,000 in year-one costs. We break the full list down in our post on the real cost of getting started in real estate.
Use this list to gut-check fit before you spend a dollar on coursework. Answer yes or no honestly.
If you answered yes to four or more, real estate is likely a good fit. If you answered no to four or more, fix the no's first or pick a different career path. Forcing it costs you 12 to 18 months and several thousand dollars you won't get back.
A typical week for a working agent isn't glamorous. It's a rhythm. Mornings start with prospecting blocks, usually 60 to 90 minutes of calls, texts, and outreach to past clients and warm leads. Late mornings and afternoons fill with appointments: listing presentations, buyer consultations, showings, and the occasional inspection or closing.
Paperwork lives in the cracks. Contracts, disclosures, and addenda eat more time than new agents expect. Most agents block 30 to 60 minutes a day for admin so it doesn't pile up.
Weekends bring open houses, second showings, and lead follow-up. Evenings are calls with buyers who can't see houses during work hours. The agents who treat the calendar like a contract with themselves win consistently. The ones who freelance their schedule end up in feast-or-famine cycles.
The career is less about hustling 80 hours a week and more about doing the right 30 to 40 hours, consistently, for years.
If you're disciplined, social, and have 3 to 6 months of financial runway, the pros outweigh the cons. If you're missing one of those three, fix that first. The career doesn't punish lack of talent. It punishes lack of preparation.
The agents who win in 2026 are the ones who treat their license like a small business from day one, communicate value clearly in a post-settlement market, and outlast the people who quit at month seven.
If that sounds like you, your next step is licensing. Start your pre-license course and we'll walk you through the rest.
The MLS stands for the Multiple Listing Service. It is an online database used by agents and was created to provide information on real estate properties. In essence, it provides agents with an inventory of properties.
Did you know the MLS is not limited to residential listings? It provides information on all types of properties such as income, businesses, land and rentals.
If you are an agent, this database is a crucial tool when it comes to servicing your clients. Let’s talk more about how to use the MLS, some basic features, and other services that the MLS provides to help you with your business.
Let’s start with how to use the MLS for buyers.
As we know, each buyer will be different. They will have specific features that they will be looking for in a property. The first step is finding out what your buyer wants.
Start by having a buyer consultation with your client. This will give you a better understanding of what your buyer is looking for. After you have collected the information, use the MLS to zero in on the listings available.
The MLS can search for properties based on a variety of factors. The most common search features are the city or zip code, type of home (Single Family or Condo), and price.
The more criteria you put, the more the MLS will narrow in on only the listings that fit that search.
So, let’s say you have a buyer that only wants to see 2 bedroom condos in West LA, for under 1 million, that is pet friendly, and has a fireplace. You can get that specific.
On the MLS you would input – Area: West LA – Price: Max 1 million – Bed: Max 2 – Interior Features: Fireplace – Pets: Yes
The MLS will do all the work for you and show you the properties currently available that fit the criteria. You can then set up appointments to preview the homes with your buyer.
If you’re an MLS participant “working with” a buyer, you’ll generally need a written buyer agreement before touring a home (this includes in-person showings and many “touring” situations—check your state and local MLS rules/forms)
Another great feature of the MLS is the Open Houses section.
Maybe your buyer doesn’t know exactly what they want yet. Perhaps they only know they want to live in a particular city. You can see all the properties that are holding an Open House in that area and take your buyer to preview those homes without an appointment.
Open houses can still be a great way to preview inventory, but always follow the listing’s instructions/Agent Remarks, and remember: if you’re “working with” a buyer as an MLS participant, a written buyer agreement is required before touring (including when you’re touring with them at an open house).
As an agent, you can also use the Open House section to preview homes and better know the inventory.
If you have a buyer that is hands-on in the process, you can give your client access to the MLS as a guest. You will also be informed of the searches that your client makes.
In most markets, consumers don’t log into the MLS directly as a “guest.” Instead, you typically set them up with a client portal/home search powered by MLS data (through your brokerage/IDX/VOW tools), where they can save favorites and you can see their activity—while sensitive MLS-only fields remain private.
This potentially leads to an offer made, accepted and gets your buyer in escrow!
Now let’s talk about the sellers.
When you are a listing agent, your main priority to your seller is to get their home sold. You want them to be confident in your ability to get their home advertised and sold quickly. What better way to get that done than to list their home on the MLS.
It all starts with the listing appointment. Part of your listing appointment will include a Comparable Market Analysis. A Comparable Market Analysis, or CMA helps determine the estimated price of a home. The MLS will be invaluable when creating the CMA.
It does this by pulling all the properties recently sold. These properties will have the same characteristics as the home you’re intending to list. This helps ensure you are pricing the home favorably with the market.
Once you have the listing, the next step is to enter it on the MLS for maximum exposure.
You will be inputting all the characteristics of your listing for everyone to access. Since the MLS is the primary database for all active listings, you want to make sure that your listing stands out.
The MLS is the primary database for most publicly marketed broker listings in a market—but not every property will appear in the MLS (some listings may be marketed privately or delayed, depending on local rules and seller choices).
You can do that by adding professional pictures and a video of a virtual walkthrough of the home. Your detailed description of the property and added features can also attract other agents to want to make sure their buyers preview your listing.
If you are holding an Open House, don’t forget to enter that information as well. That information also gets auto-populated to the Open House section for buyers to see.
The MLS does have a public search feature so make sure that your listing is complete. Listings with shorter descriptions and few pictures will not get as many inquiries.
MLSs are private databases maintained by real estate professionals, and public access is typically provided through participating brokers’ websites/portals. Some MLS data (like showing instructions or seller privacy/safety details) is intentionally not public.
UPDATED (2024 change): As of August 17, 2024, offers of compensation are prohibited on MLSs(compensation can still be negotiated off-MLS). This changes what you’ll see in MLS fields and how buyer-agent compensation conversations happen.
Whether you are representing the buyer or seller, sometimes there is information that only the agent will need to see. That’s when you will refer to the “Agent Remarks.”
Agents will use this area for a variety of reasons. Most commonly, this will be used for showing instructions. Here are some other examples of what would be disclosed in the agent remarks section:
The remarks are designed to provide additional information only pertinent to the agent. Regarding the first example, death is considered a “material fact” so it must be disclosed. A “material fact” is considered any information that would impact a decision to purchase.
Disclosure rules (including stigmas like a death on the property) can be state-specific and sometimes time-limited—so treat Agent Remarks as a cue to verify your state’s disclosure requirements.
Not to say that a buyer wouldn’t want to know if a death occurred on the property!
It is more appropriate for an agent to convey that sensitive information to their client than to see it publicly where it can cause a bias.
From agent websites to database management, agents have many tools that help with their business. The MLS is an integral part of that overall picture.
In review, the MLS is a great resource when it comes to conducting business as a real estate agent. Benefits:
Many MLS platforms integrate tax/public record data, but availability varies by MLS and vendor, so think of “public records access” as a possible feature—not a guarantee.
And we have only gone over the basics! The MLS is versatile and an invaluable tool. So next time you’re on the MLS, go exploring.
You’ll be happy you did.
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