THE DIRTY DOZEN THINGS TO KNOW ABOUT BEING A REAL ESTATE AGENT

by Michelle J. Lane

Over the course of my time as a Realtor, I have been presented with many misconceptions about the life of a real estate agent.   The idyllic vision goes something like this – your friend calls you up and say “Let’s go shopping for a house!”   You then have a fun day of traipsing through some lovely homes, your friend wisely chooses whichever one you like best and you both have such a fun time through the process of them buying the house that they love you even more when it is over.   And the bonus is that you get a big, fat check at the end.  What’s not to love about that?

If you search on ‘Becoming a Real Estate Agent’ you will get a lot of good info, some very funny and some serious. Since I still run into misconceptions, I am sharing my version.

If you have a large inheritance or otherwise don’t need to depend on real estate for an income – dive right into the world of real estate and skip the rest of this article. Those of you who need to make a living, read on.

  1. NO SALARY – Real Estate is purely commission based – there is no salary. If you don’t sell, you don’t eat.  I have had people tell me they thought you show up in the morning, the company hands you your leads, you take care of those clients, then come back for more – NOOOOO!!  Occasionally the company will have leads to pass around.   Not a volume that will earn you a living.
  2. LOTS OF EXPENSES – Every cost to run this business comes out of your pocket.  The costs to advertise your listings and to run the office come from your company’s take of your commission.    The rest you pay out of your net commission. What are those fees and expenses?
  • MLS – The fees to be in the Multiple Listing Service
  • Local Real Estate Association fees and dues
  • Errors and Omissions Insurance
  • Business Cards, Envelopes, Stationery
  • Postage
  • Your website
  • Open House Signs
  • Tools to do your job – computer, sales database software, smart phone.
  • Electronic key to get in lockboxes
  • All the automobile costs to drive clients around or meet them at listings. And trust me, you will drive around with many people who will then never buy a house with you.
  • Health Insurance
  1. THOSE BIG, FAT CHECKS ARE NOT SO BIG AFTER ALL:

Let’s say you get a listing for $500,000 and sell it – yeah!  The client thinks you are walking away with 5-6% of that – $25,000-$30,000.  The reality is that gets chipped away pretty quickly.  The chart below gives a rough idea of the breakdown.

commission chart

So how much can you expect to make?  As with all sales professions, the top 10% make the bulk of the money.  The next 20%-30% manage to make a living and the rest are searching under the sofa cushions for spare change.  As a frame of reference, the median income for a real estate agent in MA is $40,000.

  1. DESPERATION will make you your own worst enemy. When you finally do get a lead, you will cling to them like a Bulldog with a tug toy.  You will let them lead the agenda – drive them to see every single house on the market, call them daily…until you realize they aren’t going to buy – at least not with you, not now, maybe never.   A salesperson has to qualify leads.  If you didn’t come from a sales background, you won’t really know how to separate the posers from the real clients and will eventually leave the profession thinking all people suck.   Which leads us to what they think of YOU.
  2. PEOPLE THINK YOU ARE LOWER ON THE FOOD-CHAIN OF  TRUST THAN A USED CAR SALESMAN – The general population does not trust or like real estate agents. Why should they?  The bar to becoming an agent is fairly low.   A week long class, a test, some fees paid and voila! – you are a real estate agent.  Realtors do have to take extra ethics training, but that’s the extent of what it takes to gain entry.   It is possible to be an agent with no experience having bought or sold a house yourself.  So, for every agent who is knowledgeable, experienced, professional and trustworthy there are probably 3 who are not – maybe more – I am just making my best guess on that number.   So prepare to be mistrusted and disliked.  You must have the fortitude and patience to work through that.  Which leads to our next point.
  3. DO YOU KNOW HOW TO BUILD TRUST? This profession is about building trust. In the best case scenario, you will become your clients’ trusted adviser. That takes a good deal of patience and paying attention to what people want and need.   Refer back to Point 3.  Desperation causes you not to listen and push people to hurry up and buy something.  You will become unfairly agitated with them for not moving faster and will curse the day they were born when they fade away without doing a transaction with you.
  4. YOU ARE RUNNING A BUSINESS – This means creating a business plan and a budget, marketing, advertising, managing client relationships and transactions, educating yourself, dressing the part and so much more.
  5. YOU MUST BE TECH SAVVY. You should, at the very least, have a tablet or laptop, and a smart phone and KNOW HOW TO USE THEM.  Your clients do. And you need to use those tools to keep up on the market to be one step ahead of your clients.  If you can find lots of real estate info on the internet, they can too. And they expect you to know more than they do.
  6. THE OTHER AGENTS ARE NOT THERE TO MENTOR YOU – Your sales manager will guide you, get you into training you need and answer your questions, but in the end, making sure you learn what you need to know is on you – it’s your business after all.  Many new agents are afraid to show their manager how much they don’t know, so they ask the more seasoned agents for help.  While most of your fellow agents will help you here and there, they are not being paid to mentor you. They are not being paid at all – for a refresher, refer back to point 1.  In essence, they are your competitors.  Friendly competitors, but competitors nonetheless.
  7. YOUR SCHEDULE IS NOT YOUR OWN – You are like any other small business owner.  You may have some flexibility but you must be available when business is happening.  Which means you will miss events with family and friends. You will have clients wanting to see houses during the day, at night, weekends.  You will be talking to them late at night as you are working to get an offer in on a house.   They will expect you to pick up the phone or respond to a text or email instantly.  We live in a time of instant communications.  And this is the biggest transaction of their lives – they will get anxious and agitated if they cannot get hold of you.
  8. YOU WILL BE TELEMARKETED TO DEATH – There are hundreds of companies out there that will start calling you to let you know how they can give you leads, get your website to the top of the search engines, provide coaching, etc. It reminds me of the gold rush where the real people who made the money were not the gold miners, but the people who sold supplies to the miners.   These companies are preying on your need to get clients and your lack of direction on how to find them.  The upside is you will understand how people feel when they are getting inundated with calls and letter from real estate agents.
  9. SOME PEOPLE DO SUCK – I have seen some buyers and sellers do some really lousy things to good, decent agents. No matter how much you try to qualify them, some people will pretend they are ready to buy or sell just because they want to get free advice or a chauffeured tour of Boston.  Others will try every way possible to use up your time, money and knowledge without paying a commission.  But, if you are good at qualifying, you can minimize that.  Being able to minimize that means having a robust business that gives you the ability to say, “No Thanks” to those people – at least the ones that set off your Spidey senses. Some are going to slip through. I have seen agents become bitter after working with too many of the sucky people.  When you are in sales, you have to learn to kick a chair, swear a bit, learn from the experience, and get back to your business.

I will say, for every sucky person out there, I have met so many more that are wonderful, sweet, trusting and want to have people they work with earn a fair fee for their work.  And I have been fortunate to have them as my clients.

After reading this list you might ask why in the in the world I do this.  Because it is rewarding both emotionally and financially.  I feel honored to be part of the biggest financial and lifestyle choice that my clients make and I feel that my work matters.  I enjoy the independence and the fact that my work is directly tied to results.  My fate is completely in my hands.  The upside potential is huge and I can do this until I just don’t feel like it anymore – no one is going to lay me off.  I am fortunate to have had good sales training before switching professions.  Love ‘em or hate ‘em, Microsoft knows how to sell and they taught me the fundamentals of consultative selling which has been the foundation for a great real estate business.

So if this list has not scared you off,  welcome to the world of Real Estate!

Michelle J. Lane

MICHELLE J. LANE, Realtor
Century 21 Commonwealth
CELL: 617 584-3904