Good time to become a Real Estate Agent in Washington? (Spokane: sales, rent)

[REnewbie]

I am taking the licensing exam within a couple of weeks and am getting incredibly mixed feedback from brokers and agents regarding the doom and gloom. Here's the thing. I have a great job - salary, bonus potential, stock options, benefits, pto, 401k (matched!), profit sharing, blahblah - but I have been with this company "all my adult life" and I want to try something new. The only way I figured I can do this is to use my 401K as my safety net of 7-9 months. I am married, but the breadwinner - so can't afford the luxury of depending on my spouse's income for backup.

I have been interviewing brokers and telling them my situation hoping for an honest opinion, especially in this market, if I will make it or not on these funds. ALL of them seem to think the market is SLOW, but not horrific. All seem to think I should have listings within the first 30-60 days of being in their office. I can't separate the hype from the reality of it anymore. Anything I read on the web makes it sound like this career change should be put on hold for approx 2-5 years because we haven't "bottomed out" yet.

Please, looking for honest opinions - esp from newbie real estate agents or brokers who can give me facts about how sales are doing in washington state for since june of 2006.

Thanks for any honest-non-fluffed insight.

[WendyK]

What part of Washington? The markets vary from city to city, so my answer regarding the market here in Spokane will be different from agents on the west side or central part of the state.

[mthomson]

I think if you find the right brokerage, regardless of where you are, it can be a good time to get in. It's not easy work, you're not going to have a listing in 30-60 days just come to you, but you can make it work.
Find a brokerage that has a lot to offer you...training, coaching, a vibrant upbeat office, etc.
It won't be easy, times can be lean, but it's a very fun business that can be profitable for those who are willing to work very hard for their clients. Chasing commissions and trying to get rich quick isn't going to work...won't in most sales businesses.

[StealthRabbit]

Originally Posted by REnewbie

...The only way I figured I can do this is to use my 401K as my safety net of 7-9 months. I am married, but the breadwinner - ... should have listings within the first 30-60 days of being in their office. I can't separate the hype from the reality of it anymore. ... approx 2-5 years because we haven't "bottomed out" yet.
...

I wouldn't fund a new venture with retirement (qualified... = penalty for withdrawal... investments) There are many other options.

I do feel that the RE market has a potential for prolonged recovery (3-10yrs), and doubt if we've seen the bottom, yet...

It is possible for someone who is very good to jump in and be successful, even in a down turn, but.... that would be very aggressive and possibly tough to prove out if you haven't dabbled into it.

SO... not knowing your background (RE experience, location, sector focus (residential / commercial / speculative / investment / housing)... I'd wade in by finding a mentor, but not leave a good job, yet... BTDT

Granted it would be very tough to do Part-Time and make a huge success, but it would be possible to build your network, do (and witness / accompany) some transactions to identify your best areas to focus, target areas / segments that you CAN be successful at.

I think it is ~ the same as running a restaurant (very tough) as far as jumping in an making a quick go of it. You really need a network of agents, investors, bankers, appraisers, private capital, and other business contacts. These are essential !

You may serve your personal interests and your family best by setting aside a block of time / week / month to pursue this. Hopefully there is some degree of flexibility in your 'great-job'. This would be best for your financial position, especially if you are targeting residential sales. I would do some serious history work in how real estate recovered in PNW in the '80's and other places as well. There are certainly specific locations and properties that will lead the recovery. I would not want to be selling tract houses, or urban McMansions. Look at the demographics and strategically determine the sales growth future. I survived the slump of the '80's and got some great bargains, several years AFTER the recovery supposedly started. WA is going to throw you another curve ball as folks digest the property tax burdens, which are dynamically changing as we chat. Municipalities will feel the pinch, AFTER their homeowners taxes get fully ratcheted. There could be significant problems if a recession occurs, as WA will experience a 'sub-prime' mess of its own, fueled by folks that cannot afford to pay their property taxes. (my taxes are double the highest payment I've ever had). This is a 'lagging' issue and will not become evident for a few years, but UNLESS there is a revolt and roll-back (unlikely), there will be a lot of 'Sheriff's sales'. IMHO

I have been very successful at private real estate investing, and it has been suggested I pursue becoming an agent. For me, its not an attractive career, but I will continue to use RE as an investment vehicle. I have only done ~ 20 properties; but finding a competent agent has always been a challenge, thus I do it on my own. You have to have a passion for your projected sector. I could not - hold first-time or incompetent buyers by the hand, or negotiate deals with less than professional agents representing less than knowledgable clients, or presume to tell someone a home is their biggest "investment" .

As mentioned, I would 'wade-in' (only with an aged and successful mentor)
When your RE success gets in the way of your great job, then you can pull the plug on that. Otherwise, create a massive savings / downsizing plan, or work some part-time jobs, to build 2-3 yrs safety net BEFORE jumping on the RE bandwagon. (I think the timing would be better by then anyway). Do some statistical data surveys of current WA RE agent earnings + # of agents, then factor in a 30% slowdown and see if you will be able to feed the family, pay utilities, buy healthcare, go on vacations, fund 'emergencies' ... We did the single income thing and it was good for our family but not ez, so listen to your spouse and kids (they may have the biggest investment here)

good luck

[mikec34]

Originally Posted by REnewbie

I am taking the licensing exam within a couple of weeks and am getting incredibly mixed feedback from brokers and agents regarding the doom and gloom. Here's the thing. I have a great job - salary, bonus potential, stock options, benefits, pto, 401k (matched!), profit sharing, blahblah - but I have been with this company "all my adult life" and I want to try something new. The only way I figured I can do this is to use my 401K as my safety net of 7-9 months. I am married, but the breadwinner - so can't afford the luxury of depending on my spouse's income for backup.

I have been interviewing brokers and telling them my situation hoping for an honest opinion, especially in this market, if I will make it or not on these funds. ALL of them seem to think the market is SLOW, but not horrific. All seem to think I should have listings within the first 30-60 days of being in their office. I can't separate the hype from the reality of it anymore. Anything I read on the web makes it sound like this career change should be put on hold for approx 2-5 years because we haven't "bottomed out" yet.

Please, looking for honest opinions - esp from newbie real estate agents or brokers who can give me facts about how sales are doing in washington state for since june of 2006.

Thanks for any honest-non-fluffed insight.

i've dealt with a few agents recently, and they all tell me its a buyers market. you are starting to see major discounts on houses in washington. just look at housing in the areas and you'll see the listings sprinkled with "appraised for 400k, but now selling for 20k cheaper!!" it's still a fairly strong market i think, just looks like it's slowing down here. one thing that is good about washington (seattle area), in terms of being a real estate agent (at least it sounds like it'd be good), is that while the market appears to be cooling here like elsewhere in the country, they don't have a huge surplus of new houses just sitting there. seems to me there's little new development in the state, so the houses are recycled and witha growing population that keeps the supply/demand in favor of the demand side, not supply like vegas, phoenix, etc.

i'm not an agent, but those are my ideas of what's going on in washington.

[Sandy Nelson]

RE Newbie,
I see agents leaving the business getting "real jobs" because they can't support their families on their RE commissions, and brokerages are closing their doors. It's a tough market to be in real estate right now. I look at it from the positive side, that the overpopulated Realtor ranks get thinned out, and the ones worth their salt will continue to thrive. I would caution you against using retirement funds as a buffer. If at all possible, get your license and work real estate on weekends and evenings, while still holding on to your job. Definitely try to find a mentor or work for a successful agent, even if it means giving up much of your commission. The amount of lessons you'll learn will be invaluable. I would take "the leap" only when you feel you have acquired a solid client base and have had sufficient transactions to prove income.
Best of luck to you.

Sandy

[melpotensky]

If you have a solid job with a matching 401K and bennies, hang onto your job for now. Goldman Sachs came out with doom and gloom prediction today of a recession, mild and not historic but you will see a real downturn in finances for '08. Seasoned agents have lots of listings sitting and sitting and they are getting nervous. I am not aware of health insurance for agents or paid vacations or any type of extra income. You have money saved to use while you get started in your new career but spending that money for living expenses is something I can hear Suze Orman saying is a denied option. How about sticking it out for a year and using your knowledge of the market to scout out homes and when the market really starts to slide here, then buy up some properties at low ball prices and rent them out and wait for the market to pick up with buyers and then get into the business. Being an agent in a soft market requires knowledge that JanB posses about everything that is happening in politics and you have to have a knowledge of where the new schools are, how land is zoned for future commercial areas so you will know how views of homes are affected, traffic, knowledge of construction and roofs, even septic has swayed me to give my business to an agent. There are so many agents that just show houses and can't warn you about a new landfill that is proposed or tell you about an up can coming exit that will be put into an area driving home prices up etc. We have bought and sold lots of properties over the years and a good agent is invaluable when you are buying in an area you are not familiar with. I believe that the business changes drastically in a buyers market from a sellers market and I would really think twice about leaving a stable job, be it boring but stable. Good luck and I give you props for learning a new career

[missyM]

Please, please, newbie......listen to mel.


Huh? Make sense.

[madicarus2000]

Originally Posted by REnewbie

The only way I figured I can do this is to use my 401K as my safety net of 7-9 months.

I only recommend tapping into the 401k on two occassions, early retirement and after retirement (pretty much retirement). It should not be a safety net to support an untested and brand new adventure, that's what a bank savings account is for.

You’re better off trying to find a hobby as an outlet. I’m not in my dream job but it pays the bills and allows me and my family to afford the lifestyle we like. I have plenty of hobbies to interest me and my 401k is off-limits until I retire.

[REnewbie]

Thanks everyone for all of the great advice. I had initially intended to work around my current job, but the brokers out there were not interested in part time workers. I sent a huge email to two of the brokers that I really liked regarding all of my concerns and pleaded for more options other than the "balls to the walls" approach and one actually seems willing to help me. (i.e., working nights/weekends OR licensed assistant OR assistant to several agents, who knows). I even talked to one of my existing managers about it and she said she would be willing to help me work out a schedule so I could "test the waters" in real estate.

Many mixed reviews out there about the market. Brokers telling me fine, agents telling me (and I'm only asking new ones with 0-3 years experience) that it has been dead (ZERO transactions) since August 07. Friends in title and lending telling me about the same. But pretty much everyone telling me at the same time, where there is a will there is a way.

To the RE investor out there & hobbyist not working the dream job - my mom also suggested that I can have fun with real estate and NOT have to be an agent. So starting to explore more options in that area as well to incorporate real estate as a hobby of some sort so I don't risk the really REALLY great job I have.

Thanks everyone again.