The pros and cons of working in real estate.
The cons: Don’t expect clients to be lined up for you just because you get your real estate license. (Getting a license is the easy part) Clients don’t want to get a sense that they are dealing with a brand new, transitioning, part time, or desperate REALTOR®. You have to get your own clients through hard work and persistence, and let the brokerage leads just be bonus clients for you. Use REATLOR-ASSOCIATES®, Mentors and your Broker’s assistance to understand daily duties of a successful REALTOR® and things will get rolling. No matter where you go, expect about 50% of your commissions for the first year to go to the brokerage or a mentor, because someone has to show you the ropes and no one works for free.
The Cons: You’re basically a real estate salesman with a buyer, or the seller as your client, sometimes both (intermediary relationship is representing both). It’s not like school, you are not just passing classes, you are working towards assuring closings and paychecks. You need to stay active and observant and solve situations as they come up. Real estate is a hard business because you are negotiating large amounts of money on behalf of buyers or sellers, and even with all your hard work, you could still not get paid if the deal does not close. You cannot assume a contract means a paycheck at any time, nor should you spend foolishly before it closes. You have to keep a pipeline of real estate transactions going, you don’t want to feel the pressure of closings being a ‘must close’ scenario, because your behind on bills. Remember you are working for your client’s best scenario, not yours, and some times that means recommending your client void the contract.
The Cons: You are an independent contractor, meaning you do your own taxes, and fine-tune your own sales methods. Real estate can also be very stressful because you are dealing with large financial decisions, and people that do not make these type of decisions rarely. Many times you may feel like a psychologist when dealing with a client’s marital issues, buyer insecurities, or with an unreasonable seller… and some deals can come with all 3 of those issues or others.
The Cons: Once licensed you have canons of professional ethics, and lots of professional liability that comes with a real estate license… these 2 are not a negative, but you have to stay educated and aware of your new responsibilities as a REALTOR® because lawsuits happen easily in the real estate industry. Also extremely important to know are Fair Housing Laws, RESPA, and DTPA
The Cons: Licensing also grants you responsibility in contract law. TAR and TREC have created contract templates and there is software which allows you to just fill in the blanks. The blanks on contracts are what matters. The negotiated numbers and dates you fill in, turn into contract deadlines, escape clauses, and firm numbers. It is also very important to remember you are not a lawyer, and you should never be giving legal advice to your clients.
The Cons: You will have to know what disclosures are needed, when and why. In the initial meeting with any potential client, you need to have them sign an Information about Brokerage services disclosure. Don’t worry, all broker’s are required to carry appropriate Errors & Omissions insurance on behalf of all their agents; but like any insurance, you really hope you are not forced to use it.. I have never had to use E&O insurance, and trust that you do not want to be in a situation where you do.You are a licensed professional, and licenses may be terminated or penalized for bad mistakes.
The Cons: The initial costs and time till first paycheck can be rough on a new agent, 1 to 2 months before your first check, if you are really hustling. Once you get the hang of it, all these concerns will fade out and real estate will be common day practice for you. Like anything new, you need to put in the hard work early, to ride through the learning curve and money delays.
Real estate is a great business though; don’t let all the negatives scare you off what you’ve envisioned.
Ask yourself these questions:
- Why do you want to be a REALTOR®?
- Do you have the qualities of a REALTOR®?
- What are the “perks” of being a REALTOR®?
- Are you a people person?
- Do you find real estate intriguing?
- Do you see yourself as a REALTOR?
The pros: are simple and probably most of the reasons you are here.
The Pros: Acquiring your real estate license opens the door to a lot more job opportunities; like apartment locating, property management, right of way, becoming an investor yourself and commercial real estate agent (to name a few).
The Pros: One of the fundamentals of human necessity is SHELTER. People will always need shelter, whether they are moving, starting roots, or Renting; a license will allow you to coordinate it all and pay you commissions for assisting real estate transactions.
The Pros: People need REALTORS, they really do. More then 87% of people sell with a professional agent, and when buyer’s need to make smart decisions with real estate; they go with a trusted REALTOR.
The Pros: Real Estate is fun. Searching all types of properties, for the right deal, shaping nothing into something. Leaving the closing table with every one happy is truly a great experience. Being honest and tying all lose ends before closing happens, is a stress free way to be a REALTOR.
The Pros: You can make a lot of money and even more if the real estate market is popping. Personally without doing any advertising for myself I am making 20-30k a month on referrals and repeat business!
The Pros: You work when you want, and only as much as you want to work, and you choose your own business direction, find your own niche. (like any business you operate, the more smarter you work, the better you’re likely to do.)
The Pros: Even if the market goes down, you can adjust your strategies, which you should be doing regularly anyways. I know plenty of real estate investors and REALTORS who are doing extremely well even through the housing market crash 2008-2009.
The Pros: Some deals will come easy, and you will get paid so well, you nearly feel guilty. I have clients that already picked out the house and just asked me to represent them for their safety of mind and over all confidence in the investment. But you give buyer’s the educated confidence to make that purchase and great professional consultation is why we get paid.
The Pros: Helping a first time home buyer is very rewarding. A first home purchase is extremely exciting for the first time home buyer. I’ve have clients take me out to eat, send me gifts, and refer me to their circle because they were so happy with my services, when you would think it would be the other way around.
The Pros: Intermediary relationships have a chance to earn 4-6% commissions on a single deal. Often new home communities and real estate agents offer bonuses or or high commissions to induce.