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Bad Reasons to Start a Career in Real Estate

We welcome those who have a vision for what they can accomplish in real estate, and a desire to be successful. Being a part of real estate agencies is no easy business, and only the very best can become highly successful. We want you to become one of the finest professionals in the business and successful enough to fund your dreams and mission in life. But we also encourage you to carefully consider your motives before you pay the price to get into this profession.

Why do you want to go into real estate?

I have interviewed scores of new agents over the years and I always ask this question. 95% of the time I hear these first two responses, [accordion_group] [accordion title=”I love working with people”]And what about those people you love? It’s true, there will be many wonderful people and you will make many new friends. You will gain great wisdom about people. This truly is one of the great rewards of our work.

But… you also will work with every conceivable kind of person on the planet. Many of them will stretch your patience and push all your buttons. You must be purely professional in spite of rudeness, inconsiderate behavior, indecisive personalities, quarreling spouses, irrational responses, unfair demands, costly disloyalty, and people who will not trust your knowledge and expertise. You will be blamed unfairly, and when you accomplish great feats, you will not be appreciated for what you have sacrificed for them. You must have patience, exceptional tolerance, and persistent endurance to be successful with people.

The most challenging part of any human enterprise is working with people; it is not the tasks you have to complete nor the knowledge you need to attain. When the stakes are high and the pressure is on, you will be tested to the limits. It is at this moment that you will meet the real person you are working with (and perhaps the real person you are), not the façade a client can control under normal situations.[/accordion] [accordion title=”I would love to show homes”]Here’s the reality regarding showing properties… You will show homes 5-10% of your time, at most. That is the fun and easy part. The rest of your time will be pain-staking research, persistent and unrequited communications, incessant continuing education, relentless problem-solving, and managing complex and frustrating transactions with an inordinate amount of paperwork.[/accordion] [accordion title=”I want to be my own boss, control my own schedule, and take time off when I want to.”]Really? You will no longer have one boss dictating your schedule, that is true; you will have a dozen bosses at any given time, and you will not be one of them! Real estate is a service industry with highly irregular hours and demands. We serve the needs and desires of people making some of the most important decisions in life for their futures and their families. They cannot wait for us while they lose crucial opportunities and they will not tolerate us being on vacation while their transaction appears to be crashing. Our clients have their own best interests in mind, not ours, and they take them seriously. If your schedule causes a client to miss out, you will be fired on the spot and you may not realize it for days or weeks.

And controlling your own schedule and taking time off? Good luck! Someday you might learn how to do it but it is a Herculean challenge! Yes, you deserve to have a life but you will have to work hard, work strategically, and build your business wisely to make that a reality. It is not a given.

Real Estate is an entrepreneurial enterprise. You are building your own business much like an insurance broker or a new resturant, or any other small business person. No one gives you clients or accounts; you find and develop them by your own skill and determination. You build your own success and you must craft it wisely to create the lifestyle you want, but not at the expense of your clients. If you build well, you can have a life…eventually.[/accordion] [accordion title=”I want to make a lot of money and I heard you can do this in real estate.”]True, sales is the highest paid profession. Many corporate sales people make even more money than their CEOs. Why? Because sales people move goods and services so that everyone else can do their jobs and make money. Without sales, the whole economy grinds to a halt and everyone dies financially. Sales people make the world go round, insure people’s investments by their work, and create more opportunities for everyone.

Realtors® can make a lot of money but it is not automatic or assured. This is true in every industry. You have heard of the famous 80/20% rule for much of life? Applied to real estate it is more like the 90/10% rule; 10% of the agents make 90% of the money. Guess what is left over, and for how many people?

During the good years, the average agent made $42,000 per year. Considering you will be an independent contractor and pay much of your own expenses and self-employment taxes, this number is significantly lower in ‘take-home’ money. So much for those filthy rich Realtor® rumors so many people spread around!

Commonly it can take two years to make decent money in real estate. In my first year, 5 of us started with the same brokerage. At the end of the year one agent made no money, one made $4,000, and one $11,000- gross income! I and another agent earned $65k and $75k respectively. So while you are not destined to do as poorly as some, it takes special talents, training, and good opportunities to do better than the average Realtor® (more about that in other articles).

In the past few difficult years of the housing market, most Realtors® have made no money at all, or very little money. We have become somewhat content just to pay our business bills. In fact, I talked with a Vehicle Repossessor in 2008 who said his most frequent assignment was to pick-up real estate agents’ cars. While the depth of the down market years varies, real estate is a cyclical industry. In the fat times, you have to save for the lean times.[/accordion] [accordion title=”I want to supplement my family income and be able to work part time.”]Wow. This one is tricky. It is not that this cannot be done, but it is not as easy as one might imagine. Consider these thoughts:

Our industry is changing rapidly, as it always has been. Continuing education is crucial to keep up with legal requirements, current issues, specialty information (e.g. mortgage), and industry fads, etc. No matter how long we are in this field we never stop coming across challenging situations we have never faced before and we are forced to expand our knowledge. Without being constantly active in the field and learning from experiences, our colleagues, and from other routine sources, you may be a risk to yourself and your clients.

Consider also the logistics: What will you do when your client comes in from out of state and wants to spend 3 or 4 long days with you seeing all the properties they can? What happens if 3 clients decide to be active at once? So much for part time! Many real estate appointments take place during evenings and weekends. Is this workable part-time?

Building a successful business requires enormous effort and much personal sacrifice. It does not happen automatically and it is never easy, and rarely a part time task. However, once you become successful and have built a large or referral business, then it can be easier to control how much you work. You can do this by carefully selecting your clients, referring clients to other Realtors®, or through leverage with a team or partner. You can also build cooperative relationships with others to cover for each other when you are not available. But usually you must first become successful in order to have the option of cutting back.

As a part-time Realtor® you might be content to help family and friends when opportunities arise, but think about whether they will they want to entrust one of their most vital financial issues to someone who is a novice, distracted, unavailable, or unskilled.[/accordion] [/accordion_group] [space5] [button size=”large” link=”” color=”blue” textcolor=”#ffffff”]What are good reasons to start a career in real estate?[/button][space5]

Randy McCreith, Principal Broker Bella Casa Real Estate Group 503-310-9147

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