I get asked on several occasions questions surrounding the real estate profession. What’s it like? How do I get paid? Can you start part time? Do you make a ton of money? Do you have to take a test? How did I get started? Are you your own business? The list goes on. It seems as I answered one question, it only fueled the next — which is perfectly fine. I appreciate the interest and the questions. I remember when I was a little girl, I asked a man a question about his job and he told me something that has stuck with me to this day. He said, “It’s okay, how are you gonna know if you don’t ask.?” He was right then and his response is still true today. So, as I respond to some of the more frequently asked questions, feel free to reach out to me in your own way — text, email, phone call, direct message on one of my social media platforms and ask your questions. I will be more than honest with you. Decisions are hard enough to make. I want to help you make them by being as informed as possible.
My decision initially was because I love a challenge. I heard that the test was hard, so I wanted to go pass it. Later, my decision to remain in the profession is a long-term goal to create something that I can have long after retirement and build while getting there. Hello! I have two children to think about. I love looking at houses, I love analyzing statistics, and I love helping people, but I am doing this for my health. 🙂
So, here we go.
What’s it like? It is completely opposite your regular office type job. You are in and out all day. Plan your day to go exactly as you did not plan it and you are okay. Some days are busy with showing houses, scheduling and attending inspections, delivering deposit checks and contracts, attending closings, preparing listing presentations, and meeting with sellers and buyers. Some days are created for you to play catch on activities to build your business such as; phone calls, mailing out notes, planning events, attending networking events, returning phone calls and emails, if you have not done so already, reviewing your sales statistics against your sales goals, attending an educational seminar, scheduling your next day, meeting with business partners, reviewing your business budget, deciding what marketing material or strategy to invest in, and the list goes on. Your schedule is what you make it until a current or prospective client calls, but that’s okay, because that’s what you want. Flexibility and adaptability are traits you must possess or you will go crazy!
How do I get paid? The pay structure will vary depending on where you decided to operate with your license. By that, I mean, for at least the first four years as a REALTOR, you must practice with a broker. After that, you can take the broker’s exam and practice independently. Some brokers are classified as associate brokers because they have chosen to remain with their current broker for various reasons. Some could be brand recognition and group discount rates on sales and client relationship databases that are proven to help REALTORs become more successful. I digress. Anyway, while we are trained to not discuss fees, etc., I will keep it general and hypothetical, ok? Ok.
So, let’s say that you sell a house for $100,000. Generally, there are two agents involved in the sale; one represents the seller and the other represents the buyer. The seller pays both with a certain percentage of the sale and then that amount is split even between the two agents. So, we will say 5% of the sale goes to the agents. That’s $2,500 each. Then, there is a percentage that you will give to your broker for allowing you to operate under the broker’s license. Let’s say 30%. So, you will then subtract 30% from the $2,500 to equal $1,750. You may also have a desk fee and use of copier, etc.; maybe another $100 = $1,650. On the business side, you may have other expenses to consider such as gas, car maintenance, client gift, a business lunch or dinner.
Do you make a ton of money? Real estate is truly what you make it. Most sales take anywhere from 30-45 days. So, to get an idea of a salary, simply multiply that $1,650 times the number of homes that you project to sell. Of course, if the house that you sell is more than $100,00, then so will be the commission.
Can you start part time? Absolutely! There are not many people who can just quit their steady paying jobs to solely rely on a commission – based income. REALTORS come from all sorts of industries and have much to offer based on a different set of built up skills. To start part time, you definitely would have to be determined, organized, and persistent. As a part time REALTOR, you may find that you miss out on the camaraderie or in-office leads that occur in the office while you are at your full time job. You really have to be your own cheerleader. Your free time will become time to work on something real estate related. If you aren’t thinking that way by then, you may be in the wrong business. The fees alone will make you begin to question your decision. Starting part time is an excellent way to test the waters without burning the bridge of steady employment. Some people, such as myself, have no immediate intention of becoming a full time REALTOR until other goals are attained. It’s up to you.
Do you have to take a test? Yes, you have to take a test. Before you can sit for the real estate exam, you have to complete a certain number of classroom hours. Otherwise, you will have no idea what’s on the test. I took the class online with #bobbrooksschoolofrealestate. I believe it was $245. In the evenings after work, I would log on and go through modules and take the mini-exams. As soon as I completed the course, I registered for the exam, took it and passed. The exam was $170. There are more classroom hours that you would need after being licensed and then twelve hours of continuing education hours each year; no additional expense, if received via the local Board.
How do I get started? After securing your license, you will need to get your errors and omissions insurance and pay for your license. That was about $225 total. Afterward, you will a fee to your broker to have your license there, as I mentioned earlier. Depending on the brokerage, this could range from $40-300; maybe more. This fee is paid on a monthly basis, thereafter, whether, you sell a house or not. You must then become a member of the National Association of REALTORs, the Louisiana Realtors, and the local association of REALTORs; all of which are instrumental to being knowledgeable and having the tools that you need to perform. Combined, this is about $900 per year. Other tools, such as lockbox, measuring tape, and lockbox key could be another $400 per year. If you are beginning to cringe, think about the first sale that would possibly net you $1,650 to cover those annual expenses. After that, get to selling. Don’t worry, there are coaches, books, audiotapes, good colleagues who can help you along the way. Plus, it’s tax deductible.
Are you your own business? Yes, a REALTOR is an independent contractor, responsible for paying his or her own taxes, securing his or her own insurance, clients, supplies, assistants, etc. Most REALTORs will initially begin using a Schedule C to file taxes. Your hours, your work location, your marketing strategy and design is all up to you. However, partnering with a franchise real estate firms may remove some freedoms and require additional verbiage and branding.
Well, I hope this has helped answer some of those questions for you. Have more questions, call, text, or email Brendia.