What do I need to know before becoming a real estate agent?

From the mail bag

From the mail bagI had a whole series of questions into my website wondering about becoming a real estate agent. My first impulse was to scream, “DON’T DO IT”, as not only does real estate have a high attrition rate (about 70% in the first five years) but with over 1500 realtors already licensed to carry on business in Waterloo Region, I don’t need the competition. But as I promise to answer all questions, here goes:

 

Q: Are there an general books you would recommend to read about real estate. Something to get my head thinking about it in a different way.

A: There are a lot of books about real estate. You can buy them anywhere books are sold or have a look at your public library. If you think you are going to be working with real estate investors, you should start with those books, so you know what investors are looking for. Investors are easy. As long as the cash is flowing and the capitalization rate is good, then they will buy.

The general public are more fickle. If you are new to sales, I recommend reading as much as you can about sales and marketing and about psychology. A long time broker in my office once told me that the main reason that realtors fail is because they don’t understand the psychology of sales.

As for real estate books, read as many as you can but know that the industry is changing (ever changing) and much of the information is outdated.

 

Q: How much time do you spend as a realtor? I have talked to a few people who spend a lot of time and I have talked to some people who spend fewer than ten hours a week (just on the weekend either showing houses or holding open houses). I know obviously the more you put in, the more you get out, but what is the minimum time needed to achieve anything. I ask because I have a full time job now that I want to keep while I learn the business. I want to know if it is possible for me to do this while keeping my full time job.

A: I started as a part-timer, learning the ropes as I kept my lifeline to a steady salary. There are agents and brokers that will tell you it is impossible to “be a slave to two masters”, but I would recommend it for at least a couple of years. I had it figured that if I could make two sales a year, it would cover my costs and that is basically what I did. I would work other agents’ open houses until I picked up a buyer and then I would work exclusively with them until we found a house to buy.  Once that was all done, I would “rinse and repeat”, start the process again.

It forced me to be more productive (and secretive) in my regular job but I had the flexibility to take off for showings when necessary. A lot of real estate work is done in the evenings and on weekends and if you can call and email your client during the day, all the better. You’ll be working all the time, but it’s exciting and will give you a great foundation without a lot of financial pressure new agents face.

 

Q: What do you hate about being a real estate agent?

A: I don’t hate anything about it, but its not easy. You have to be able to survive in a world of unknown. If you are the kind of person who has to know what you’re going to be doing next weekend and how much money you’re going to have in the bank at the end of the year then you won’t be happy as a realtor.

For me, the hardest thing about being a realtor is dealing with people. I was in sales for more than a decade before getting my real estate license however I sold advertising to business owners. It’s different with people and with houses. Its an emotional buy. Some people are very indecisive. You never really know where you are when you first get started with people.

 

Q: Does the job provide you enough time to enjoy life, does it provide you with enough money that you do not have to worry about it?

A: You can set your own time and hours and do it whenever you want. If you want to take a vacation, you can, especially if you work on a team. You never know for sure how many sales you’ll make in a given year, or what the future holds but at least you have some control over that. If you work for a company, you never know if business turns bad, you could get let go.

 

Q: Do you invest into houses yourself? If so, do you rent them while to hold them. Do you renovate them and sell them. Do you live in them.

A: I’ve been a landlord longer than I’ve been a realtor, that’s one reason that I originally got my license. (The other reason was that I had been laid off from a job I loved and I said to myself that I’d never let that happen to me again). I fix them up and rent them out long-term. I recently sold one of my very first investment properties. I was sad to let it go – it always generated good income, but I cashed out and put the profit into an addition on my family home (another form of property investment).

 

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