going into real estate..... (new agent, commission, gated community, listings)

[destin04]

Here is my question. I'm going to be getting my real estate license in the next two months. (Texas) I live in a community about 11 miles north of Tyler, Texas. We recently bought a house in a gated community and this is where my youngest child attends school. There are about 4000 people in this little town. Tyler, Tx has about 100,000 people. I would like to hear from real estate professionals as to whether or not you think it would be better for me to work in an area I don't live in...or a smaller ....less monied area. I don't plan on making a killing in real estate but would like to make it worth my while. I've heard Keller Williams offers the best training programs....but they are located in Tyler. Let me know your thoughts on this.

[shellytc]

My thoughts: easier to sell real estate in an area that you know. Make it your specialty. Become the expert. Also, interview many companies. Make sure they have a good training program, and check out what you get for your split. And most important, make sure you like, respect your managing broker!! He/She is your go to person, and you need to feel comfortable to ask him/her whatever you need to ask. Don't be afraid!!

You might also want to work with a top producer team in your chosen area, and get some experience under your belt. It will help!!

good luck in your new career!!

shelly

[cynmkolohe]

Do you think that a significant portion of your business will be serving people moving into the area? If so, be sure the company you choose has a good referral network.

I second Shelly on "interview more than one" broker. Your relationship with your broker will be such a key element of your early success. I changed brokerages a few months ago becuase of some major problems with the broker-in-charge at my first office. It was one of the best decisions I've ever made, I believe. The broker in my new office is professional and a true leader who understands marketing and teamwork. Ask the same question you posted here in your interviews...the brokers may have words of wisdom based on your local market that we could not begin to guess at!

[AnimalLover]

It also depends on how willing you are to spend time getting to know Tyler. You will most likely have more opportunities in a bigger market. I live in a small town about 10 miles from the state capital. I know the entire county very well and handle properties in the main city (Springfield) and all surrounding areas. BTW - I have friends in Tyler, LOVE the roses!

[magellan]

Definitely specialize in your area. You mentioned your youngest child in school, then you can also become the expert on the school system. Sign up to volunteer in school (since your schedule is much more flexible than many working parents), get to know the teachers and principal and other active parents to build referrals and to become one of the "xxxx school district" experts (just try not to hand out business cards at PTO meetings). Then when you have new families moving into the area with kids (if that's what is happening in your area), you will know the ins and outs of the whole area.

[austin-steve]

I agree with the comments made, but I'd go even further and take a more mathmatical approach to the decision.

Figure out first what your NET income goal is. For example sake, let's say you want to earn a net income (before taxes and insurance) of $50,000 your first 12 months.

To net $50K, you'll probably need to generate roughly $100K in GCI (Gross Commission Income). Let's just call it $96,000 to make the math easy, and say that you'll need $8,000 per month of GCI.

You can charge whatever commission you want, but for example sake and to keep the math easy, let's say you'll earn 3% for each transaction side you complete. If that were to be the case, you'll need to close $266,667 in sales each month, or about $3,200,000 per year in production.

Again, keeping the math easy, if the average sales price in your target area is $266,000, then you need to close 1 deal a month to meet your goal. If the average sales price is $133K, you'll need to close 2 deals a month, or 24 deals a year.

Find out what the average sales price is for the area or neighborhoods you want to target, and do the math.

Now, looking at the sales activity for your small community, are there enough sales for you to meet your goals? If only 50 homes a year sell in your farm area, and there are dominant agents that take the lions share of those listings, you're probably not going to start taking 12 or 24 deals a year. You'll need a bigger pond to fish in.

Also, most new agents do better starting off focusing on buyers as much as listings. This means holding a lot of open houses to find buyers willing to work with you. Open houses cost you nothing (except time) but provide you a low budget way to start getting your name out in the neighborhood on your open house signs.

If you go with a company that has a lot of listings in the area you wish to work, you'll have plenty of good listings within your company at which to hold open houses.

Any Broker worth their salt will run through these numbers with you, and a more detailed version of what I've summarized. They want you to succeed. They know the sales data.

Don't get your license and go into business without a business plans that sets specific goals based on actual sales data for your area. This is the mistake most agents make and it's why most wash out the first or second year. Buy the book Millionaire Real Estate Agent and read it cover to cover. You'll be WAY ahead of the game if you do that.

Finally, if Keller Williams is strong in your area, you would do well to seriously consider going with them. They have the best training out there for new agents, in my opinion. Feel free to PM me if you want to know more about the KW system and culture.

Good Luck!

Steve