There are many people who get a real estate license who can’t afford to quit their job and start a commission-only real estate job.  Maybe they need the income.  Maybe they need the health insurance.  Maybe the schedule doesn’t work for them.

One way to make money in real estate is through referrals.  This could be particularly lucrative if your full-time job involves meeting a lot of people.  Let’s say you are a hair stylist…  Half of your job is talking to people.  Probably many of those people tell you that they are considering buying a house or selling their house soon.  If you had a real estate license, you could say, “Would you like me to recommend a good Realtor?  I’ll give them your number and have them call you.”  All you have to do is give the agent their information and discuss the referral fee you want from the agent.  When they house sells, you will get paid.

The amount of the referral fee varies depending on:

  • How well you know the prospect.  You might expect a higher referral fee for referring your mother than you would for referring someone you met in the grocery store line.
  • How well you know the agent you are sending the referral to.  For example, the agent might be willing to pay a higher referral fee to a past client (who is licensed) or consistent referral partner than they would a one-off relocation company
  • The price of the property.  The agent might be a willing to pay a higher percentage for a $300,000 house than they would for a $3million house.  Although the percentage might be smaller, you would make more money on the larger house.

In most cases, one referral will cover the cost of real estate school, so anything on top of that is gravy.  If you knew a good Realtor and you knew someone who needed a Realtor, you probably would make the referral.  With a license, you can get paid for something that you would be doing anyway.

If you know a lot of people and are looking for a way to make some extra income, get your real estate license.  Classes at Demetree School of Real Estate are available in-person and online.  Check out our upcoming classes at www.DemetreeRealEstateSchool.com

Please note that Karen Climer has no affiliation with Climer School of Real Estate.  Her father, Ron Climer, sold Climer School of Real Estate in 2014.  It has since been involved in several mergers and acquisitions and is owned by a large investment company.  Karen owns Demetree School of Real Estate in Orlando, Florida.