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Some of the great things about the real estate business:
1. Compared to most capital intensive small business opportunities with similar potential, it is a very, very inexpensive small business venture to fund at the start. A few thousand dollars in working capital gets you going. You need to make wise decisions about where you invest your start up funds. There are myriad schemes out there to seperate you from your money, under the guise, "You only have to make one sale and it is paid for."
(Side note: NEVER pay a penny to a lead seller. NEVER, EVER. They are bloodsuckers who will kill your initiative, take your valuable working capital, and meanwhile sell you garbage in return.)
However, you will need to have living expenses covered for the indeterminate period of time until your skills and desire blossom and bring you reliable income. For some folks that is 6 months. Longer for some and quicker for others.
2. You will be self-employed! With all the plusses of self-employment! 'Nuf said there.
3. Saturation of agent head counts is not a factor in your business.
It is fairly easy to bypass the average agent in productivity and profitability. You just need focus on developing skills and procuring business. 50% of the 80% that does 20% of the business is not even trying. You can make a living being in the top 25% of producing agents in most markets. Of course, you sould set your goals higher, but there are people below the top 20% who survive and make a living.
4. You can choose to generate your own business adequately to prosper, and do not have to rely on, or merely settle for office leads, or be compelled to run down office leads.
You will do well to learn rapidly that there are 7 billion+ people on the planet; that everyone of them has a basic need for shelter; that if you meet just 100 of them a year, you will do quite well.
I was in this business for 3 years earlier in the decade & I never found many pros, just cons. Here are the big cons:
- Price of getting started = extremely expensive. I had to invest over $3,000 on supplies, Supra Key, business cards, NAR memberhsip fees, etc., etc.
- On top of the steep startup costs, I didn't sell a single thing until I had been working in my office for 11 months, but after my first, I got on a roll and sold pretty steady for the remainder of my time.
- Don't count on working 40 hours a week. Sometimes I was working 80-100 hours a week. Be ready to work nights, weekends, and holidays. Odd hours are not unusual either. One closing I had ended at about 1:30am.
- Oversaturation. I'm not sure how many realtors are in your area, but at one point in the boom here, it was estimated that almost 1 out of 6 people age 18 and above here had a real estate license. There were some offices that had over 100 agents! In those big offices, the top 4 or 5 were the only ones that really made anything. Everyone else fought for table scraps, and turnover was insanely high. A girl in my RE class worked for an office like that. I joined a small office, there was 1 broker and 3 agents including myself working in an office in a county that has a population of 500,000. There was just enough business to go around between us. I don't care how large the market is, no office really needs more than maybe a dozen agents.
Anyway, the hours, not having a life & not having steady pay got to me, and I was eager to go back to corporate America as crazy as that sounds. At least now I get a guaranteed paycheck every 2 weeks, and employer provided health insurance. I'm not trying to discourage you or anyone else, just trying to give you some cold hard facts. Only 5% of agents make a good living, while the other 95% struggle to get by.
This is a very sobering and realistic post that should be read by not only prospective agents, but also buyers and sellers who are either involved with or contemplating engaging a real estate professional. It's not just "showing houses" and collecting fat commissions like some on this board think. While I don't think only 5% of agents make a "good" living, I believe that a majority of new agents fail because they don't give it enough time or they are pressured by a significant other to "get a real job." It is the most satisfying and frustrating job I have ever had, certainly not the most lucrative, but I'm in it for the long term.
I'm going to be a new realestate sales professional. Next week I start my course to pass the exam to get my license.
I'm well aware of the market right now, that is why I'm getting into it. I just have a strong intuition its right and a good time since its slow and I can learn during this slow period so when it gains momentum, I'll be ready. I'm prepared.
Reason, simple. I'm sick of relying on employers. I've had jobs, like many of you. Recently, I was laid off from my job back in Nov of 08 with the promise of being recalled in April or May. I was there for four years. Never happened. I'm on unemployment and it sucks, fun for a few months now its boring.
While looking for jobs I kept seeing this ad for new realeastate agents at a Century 21 brokerage. I ignored it at first, but every week I would see this ad and wonder why, in this economic down turn, would a realestate broker, well many Century 21 brokers in different towns--would recruit new agents, and is there something I'm missing. It jumped at me and I had an interview that went well, signed some paper, she would sponsor me so I'm taking the course. Apparently median homes are selling in my area.
I took their online tests, that indicated that I was right for the job before even calling. I took it three times.
I took the course about 7 years ago but never did anything with it. I guess I was always thinking of getting into realestate but doubted my ability but this time seems right.
I'm reading several books, on first year of realestate and Selling with Soul. That is a couple of books dealing with first year in realestate. I plan to succeed, understand that I wont make 100k the first year, shooting for at least 30k maybe 40k.
So are there any suggestions, advice, rememberances of your first year?
Stories.
I plan to work it at least 40 hours during the week including weekends and get a parttime job for the other time.
Thanks
IN this day and age of realestate, you need to look for a progressive realestate office, not just one with a well known name, each office is owned by different individuals that have bought the franchise, so each place will have a different way the do things, some will have a very hands on broker with lots of training and some are more laid back.
The old open house, go door to door to get listing or sit in the office and wait for the phone to ring to get buyers as well as go after expired listings, send out post cards are passe. You have to be more progressive.
You need to look for a company that has a strong internet presence, that get most of their leads off the internet. stats show 85% of home buyers now purchase their homes they found on the internet. The real-estate office should be very involved with major internet sites that get their presence out there and have a rotation for the agents to get leads not just their prefered pets.
This is a very competitive market and just being in the MLS isn't good enough. You should really get your computer skills up to speed if they aren't all ready. Being a realtor is more than showing homes you need to have access to all kind of tools to help you with the sales experience, and also even after you go to school you will need additional training and a good broker will provide that.
Because school is just the basics, you don't really have the knowledge until you get in the trenches and learn from on going classes,and experience . This market is so different than any we have experienced in the past and even seasoned realtors are having to learn new things to stay on top.
It's a great business, but to be truly a good or great realtor you need to do it full time, it's not fair to a buyer to have a parttime realtor, there is many complexities to a sale and if you can't be available to take care of it right away then your sale could go side ways,especially in this very complex and volital market we're in right now.
I am not saying this to discourage you but to enlighten you. Being a realtor is a proffession and like any proffession you need to be diligent . Let's put it this way would you want a doctor that only practiced part time and you couldn't get a hold of him because he was at his other job.
I was in this business for 3 years earlier in the decade & I never found many pros, just cons. Here are the big cons:
- Price of getting started = extremely expensive. I had to invest over $3,000 on supplies, Supra Key, business cards, NAR memberhsip fees, etc., etc.
- On top of the steep startup costs, I didn't sell a single thing until I had been working in my office for 11 months, but after my first, I got on a roll and sold pretty steady for the remainder of my time.
- Don't count on working 40 hours a week. Sometimes I was working 80-100 hours a week. Be ready to work nights, weekends, and holidays. Odd hours are not unusual either. One closing I had ended at about 1:30am.
- Oversaturation. I'm not sure how many realtors are in your area, but at one point in the boom here, it was estimated that almost 1 out of 6 people age 18 and above here had a real estate license. There were some offices that had over 100 agents! In those big offices, the top 4 or 5 were the only ones that really made anything. Everyone else fought for table scraps, and turnover was insanely high. A girl in my RE class worked for an office like that. I joined a small office, there was 1 broker and 3 agents including myself working in an office in a county that has a population of 500,000. There was just enough business to go around between us. I don't care how large the market is, no office really needs more than maybe a dozen agents.
Anyway, the hours, not having a life & not having steady pay got to me, and I was eager to go back to corporate America as crazy as that sounds. At least now I get a guaranteed paycheck every 2 weeks, and employer provided health insurance. I'm not trying to discourage you or anyone else, just trying to give you some cold hard facts. Only 5% of agents make a good living, while the other 95% struggle to get by.
zz, you hit the nail on the head at almost every point. Good for you.
I tell a newbie to count on 10,000 hours before relaxing. 5yr x 40hr x 50 wks. I also tell a newbie that they'll need $ 10,000 for start-up costs, plus another six months living expenses. I also tell them that unless they are considering real estate their full time work, to stay out of it. Real Estate is a full time job. Success comes only with being in the "field" every day all day. I can not tell you of one person that I know who ever made it as a part-timer. I know there are some, but I just don't know them.
But you missed on the pro's. A dedicated, hard working professional can and often will take home upwards of $100,000 in their 3rd or 4th full year. After 10-15 years, $250,000 is not unheard of.
zz, you hit the nail on the head at almost every point. Good for you.
I tell a newbie to count on 10,000 hours before relaxing. 5yr x 40hr x 50 wks. I also tell a newbie that they'll need $ 10,000 for start-up costs, plus another six months living expenses. I also tell them that unless they are considering real estate their full time work, to stay out of it. Real Estate is a full time job. Success comes only with being in the "field" every day all day. I can not tell you of one person that I know who ever made it as a part-timer. I know there are some, but I just don't know them.
But you missed on the pro's. A dedicated, hard working professional can and often will take home upwards of $100,000 in their 3rd or 4th full year. After 10-15 years, $250,000 is not unheard of.
Tom,
I disagree on the rapture that agents have regarding extreme costs of start up.
If an agent considers their real estate career as a business, and not a "job," then:
$10,000 start up costs and 6 months living expenses are dirt cheap for a small business opportunity that has reasonable potential to net $100,000 in 3 to 4 yers, and $250,000 in 10 years.
Try to start a Subway restaurant with $10,000 liquid in your pocket.
They will flat out laugh at you.
I disagree on the rapture that agents have regarding extreme costs of start up.
If an agent considers their real estate career as a business, and not a "job," then:
$10,000 start up costs and 6 months living expenses are dirt cheap for a small business opportunity that has reasonable potential to net $100,000 in 3 to 4 yers, and $250,000 in 10 years.
Try to start a Subway restaurant with $10,000 liquid in your pocket.
They will flat out laugh at you.
It is dang near free to get into real estate.
I can't tell you how much I agree with your last two posts (and I sell leads!) The real problem is people not seeing this as their own business and seeing themelves as 'employees' or 'belonging to' a good outfit. As harsh as it may sound, KenCent21 is probably going to wash out. Not because he doesn't have the drive, but because he is already making bad business decisions. He chose the office because it 'felt good' rather than it offered him the best business deal (which if you are light in sales learning a good system might well be worth the cost).
If you want to start your own business this is one of the lowest cost if not the lowest cost business you can start. If you think in terms of being an employee or 'working for a broker' you already have one strike against you.
I disagree on the rapture that agents have regarding extreme costs of start up.
If an agent considers their real estate career as a business, and not a "job," then:
$10,000 start up costs and 6 months living expenses are dirt cheap for a small business opportunity that has reasonable potential to net $100,000 in 3 to 4 yers, and $250,000 in 10 years.
Try to start a Subway restaurant with $10,000 liquid in your pocket.
They will flat out laugh at you.
It is dang near free to get into real estate.
I don't think we are at all separated on this matter. I teach my agents daily to operate their business as a business.
I agree, $10,000 and six months to any return is mighty inexpensive. I just find that so many people think they can do it for less, then wonder why they fail.
Only one question that remains, then I suppose. Why did the firm that owns C-21, CB, ERA, Sotheby's, & Better Homes & Gardens have an 800,000,000 loss in 2008 and with the accounting loss totalling 1.9 Billion, there has to be a reason.
RE/MAX is not for everyone! Note I said, "some day you will want to consider..." It is extremely hard to break into the business, and unless the particular RE/MAX broker is very strong in training newbies, then flying a balloon may be a bit too much to start.
Because the Cartus umbrella isn't just real estate. It's car rentals, hotels/motels, etc. It's all under the same umbrella my friend. Real estate paid for some of those losses. I would say the Re/Max model is typically not the best fit for new agents.
OP, as suggested this is the time to interview a couple to make sure. C-21 is a good company and if applied by the local franchise offers excellent training tools which is most important for you now. Pick the firm that will give the best opportunity to learn the business and close some properties to get started. I went with ERA in my local market, which is also under the Cartus umbrella for the same reason I posted (best training, technology, and tools). It's worked out very well for me. Many of the Re/Max agents here are jumping ship left and right because of the slower market and the desk fees are eating them up.
In response to bootstrap, the best "deal" isn't really always the best deal. 50% of some closings is still something, while 95% of 0 is 0. I'd wager the most common reason for failure among agents actually try to make it is lack of training. The cartus outfits and KW seem to excel in these areas and have done well for it.
Because the Cartus umbrella isn't just real estate. It's car rentals, hotels/motels, etc. It's all under the same umbrella my friend. Real estate paid for some of those losses. I would say the Re/Max model is typically not the best fit for new agents.
OP, as suggested this is the time to interview a couple to make sure. C-21 is a good company and if applied by the local franchise offers excellent training tools which is most important for you now. Pick the firm that will give the best opportunity to learn the business and close some properties to get started. I went with ERA in my local market, which is also under the Cartus umbrella for the same reason I posted (best training, technology, and tools). It's worked out very well for me. Many of the Re/Max agents here are jumping ship left and right because of the slower market and the desk fees are eating them up.
In response to bootstrap, the best "deal" isn't really always the best deal. 50% of some closings is still something, while 95% of 0 is 0. I'd wager the most common reason for failure among agents actually try to make it is lack of training. The cartus outfits and KW seem to excel in these areas and have done well for it.
Brandon, you are correct about RE/MAX not being the most rookie friendly in many cases, but certainly, not all. Be careful to note that the RE/MAX agents that are jumping ship are often coming back when they discover the grass isn't as green as it often appears with another firm.
Brandon, you are correct about RE/MAX not being the most rookie friendly in many cases, but certainly, not all. Be careful to note that the RE/MAX agents that are jumping ship are often coming back when they discover the grass isn't as green as it often appears with another firm.
I haven't seen that with ANY of the local Re/Max'es. However, I'm not trying to downplay the advantages of Re/Max for top producers. If I were to ever leave ERA, it would not be for another Cartus brand because they are all similar but ERA has the best tools/technology of the 5. I would would consider Re/Max or Exit only at this time because they each have something unique. KW seems to be a good national company but our local KW isn't on that level IMO. Of course, I'm very happy with ERA so I'm not looking at this time.
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'Nuf said there.
) The real problem is people not seeing this as their own business and seeing themelves as 'employees' or 'belonging to' a good outfit. As harsh as it may sound, KenCent21 is probably going to wash out. Not because he doesn't have the drive, but because he is already making bad business decisions. He chose the office because it 'felt good' rather than it offered him the best business deal (which if you are light in sales learning a good system might well be worth the cost).
