I'm a senior in college majoring in Biology but I think I'd like to go get my real estate license after I graduate, just because I've always been interested. Tell me everything about being a real estate agent! The good, the bad, the ugly...
1. People treat you like you are a sleazeball. OK, not all of them, but many of them. There is a reason for that. Although there are wonderful, honest and capable brokers/salespeople out there - you sort of often get lumped with the trash when starting out. It takes years to develop a good reputation.
2. I found being a Realtor sort of like being a cult member. I went to the meeting necessary to get my "Realtor" designation and it was one of the most bizarre experiences I have ever had. I think of it is the indoctrination where everyone pledges to keep all the secrets of the industry and work to keep a grip on the information that Joe-the-average-homeowner doesn't realize he can get for free. I sat and listened to them brag about the millions they spend on lobbying in Washington to create laws and regulations favorable to keeping Realtors in business regardless of whether it was good for the buyer or seller. And I kid you not about this - when we were in the training building, the doors were locked so no one could come in. No one was allowed to come in and no one was allowed to go out except for a cigarette break at specific times. I found it to be an extraordinarily creepy experience and I have sat through quite a lot of sales training in my 'real' industry.
I didn't think about it going into the whole venture but I came away thinking that for the most part, real estate is a real crock except in special circumstances - maybe a very expensive or hard to market property or a property where you may worry about liability and want to have someone else attached to your sale with error and omission insurance and deeper pockets than yours.
Sorry, I came away very cynical about the whole thing!
Why would you even think to go into real estate now????
The market is HORRID!
As a buyer/seller, let me tell you there are some sleazeballs in the real estate world. They are liars and cheats.
But then there's some great ones. I have one now that's awesome. She's organized (HUGE HUGE HUGE PLUS) and thoughtful and personable. And she doesn't lie.
It takes YEARS of experience and hard marketing to get a business going.
I wouldn't do it right now. This is the worst time.
I've also looked into it off and on. Yes the market sucks...today...but it takes time to get your schooling done and get licensed.
Here is what I have been told, as recently as last week.
You will pay fees to be licensed. Here is MA it's about $1,500/year.
You have to have 40 hours of school (as of June 1) to be licensed. Each state varies.
You will be an independant agent, an independant contractor. Each office charges fees for the priveledge of working there. Desk fees, advertising fees, etc. The office I talked to, you had to give 43% of the commission you earned back as 'office fees'. It's all straight commision, no base.
The broker charges 6% for selling the house. The split I was told about in this area is uneven, with 4% to the realtor handling the listing and 2% to the realtor handling the buyer.
So if you have the listing for a $200,000 home, when sold, the commision is $12,000.
$8,000 is the 4% split going to the selling broker. According to what I was told, you then have take $3,440 out of that $8,000 and give it to the office, leaving you with $4,560.00
Still sounds pretty good, right? Well now you deduct your taxes and social security. Roughly $912 federal tax, $550 towards SS (not sure what the percentage is) and any state tax (couple hundred?)
Now you are left with less than $3,000. If you pay your own health insurance, be prepared for that to be a scary chunk of change.
As part of the sunshine and rainbow fart speech, this broker was telling me how agents in the area average $50k to $100k/year. That sounded high to me. And as it turns out, it is. Way high.
The average is actually $42k, BEFORE all your deductions. I did the math all the way down and at that rate, after fees, taxes and insurance, you are going to be at or below the wage level of a groom.
However, if you are a good saleperson, or if you want to have a side job to make some extra ch-ching every year, then you can make it into an OK gig.
But it's far from being an easy lifestyle, no matter what they try to sell you on.
I didn't say I wanted to necessarily jump into it right at this moment, just learn the ropes to see if it's something I'll enjoy.
Thanks for the replies everyone!
I've had my Realtor's license for about 3 years, although I have been flipping houses for about 10. I got my license because I wanted access to the MLS and houses (lockbox access), primarily for my DH and I to buy. It has more than paid for itself. Plus I love looking at houses, so I'll go preview vacant houses just for the heck of it.
Be aware that in order to conduct business as a realtor, you need to be sponsored by a Broker. Some offices charge monthly desk fees whether you are selling or not. There are also monthly/quarterly fees you have to pay just to keep your license/Realtor membership/MLS access. You also have to take a certain number of educational classes each year to keep your license. It costs me roughly 300.00 per quarter for MLS access/Realtor membership fees, plus another 800.00 year Real estate renewal, and another 200.00 for continuing education per yr. So you need to make sure you actually want to work to make it worthwhile.
In order to be effective, you can't just take a customer occasionally. You should be monitoring the market daily, and looking at homes, so you can stay current on market values, trends, what's available, what's selling. Otherwise, if you haven't kept up, and get a client, you won't be able to give the accurate info on what to sell for, or what to offer, etc.
Okay, well, the reason people will think you're a sleaze is because you basically are. If you're in rentals: you are working for whoever pays the commission. Eight times out of ten that's the landlord, meaning ultimately, you work for them, not the renter. Basically, you do anything that stays on this side of legality to get SOMEONE in an apartment. (And to be honest, work a market like Boston and you'll start to not care because you end up hating 99% of your leads as they're generally irriating, immature, and unrealistic and blame you for what they want not existing. No, I cannot get you a two-bed with utilities and parking on Beacon Hill for $1400 or less. Not because I don't want to try, because it doesn't exist. Or at least it is not in any condition I would put a dog I don't like in, let alone a human being. I don't care what you paid in Podunk, this is Boston.)
And cost outlay depends on whether or not you are an AGENT, which is one thing, or a bonded, licensed BROKER, which is another. In MA, it's in the vincinity of $200 to be an Agent, but you must work for a bonded broker. And it is a LOT of work, and it is commission-based. You will almost never get a salary. Most agencies will make you work your way into sales, which is a much higher commission, but also somewhat less frustrating as people who are looking to buy, especially in high-end markets, are usually a little less oblivious than morons looking for "Friends Rent Control." Especially nowdays, when most banks will not actually approve credit unless they actually deserve it. (I was still very, very nice to my buyer's agent when I moved, which she appreciated, and she probably made a tidy profit as she was also the listing agent for the house I bought. Just remember as an agent if you do that, get the signed disclousure.)