Posted by: Todd Long | January 23, 2008

Would you survive being a Real Estate Agent?

Between 2002 and 2005 the Real Estate market was HOT!!!!  That was one reason everybody and their brother had a Real Estate Licenses.  You didn’t have to do much more than put the sign in the yard to sell a house.  The other major reason so many people became Real Estate Brokers and the North Carolina Real Estate Commission had so many applicants is due to the fairly inexpensive cost to get a Real Estate License.  There is a state licensing class of 75 hours that can range anywhere from about $100 to $500, then a state exam fee $89, once you pass the state exam you have about $100 to the NC Real Estate commission for application fee and such, being able to help a friend buy Real Estate and get paid…..Priceless!  Yep, I said it!  Anyway, you can have a license to practice for about $350.  Not bad.  The dirty little secret is, that is just the beginning of the cost to be a fully productive agent.  Tack on another $2000 to be a member of an MLS board, state privilege license fee, getting your startup marketing supplies and the list goes on and on.  That is month one.  Then you spend money to get a listing, spend money to drive buyers around, spend money to market a listing and on and on.  Then if all goes well you have a closing and POOF you get paid. 

I had one new agent who got into the business recently track back her expenses from her start date (already had her license) to the day she had her first closing (about 4 months).  She had spent $5250.  Her first closing covered about 1/2 of that cost.  Relative to the start of cost to many small businesses this is cheap but not insignificant.

The issue is that in 2002-2005 there were a lot of homes being bought and sold and generally a large portion of agents new and experienced could survive.  Then in 2006 and now, even in the very health Lake Norman market, just like the rest of North Carolina, there were a lot less homes closing and less agents getting paid.  This is causing a natural and healthy attrition of agents leaving the business.  This is good for the public and Real Estate in general.  Only the strong marketers, Real Estate intelligent individuals and determined will survive this period of time.  Eventually this market will be hot again and people will once again think that selling Real Estate is easy and want to give it a go.  Now this comment will not go over well with some, but I know that if the financial cost to get a licenses were significantly higher not only would you have less people get into the business who really should not, but it would also save those same people thousands of dollars trying to “make it” after they have a license.  If the cost were higher on the front end to enter you would attract serious individuals who have a cushion of cash to get in and have money to live on while you learn the business.  But, the Real Estate Commission wants as many dollars as they can get so they keep the price low. 

Everyone considering getting into Real Estate should take the time to investigate fully, with someone that is in the business they can trust, what it will actually take to make it financially.  For the truth about getting into Real Estate and having a fighting chance to make it, contact me.

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Responses

  1. I cannot agree more with this post, Todd. I was one of the people that didn’t really check out the cost of getting into the business, and was shocked to see my checking and savings accounts dwindle before I even got really started in the industry. I wish I would have read this blog post and talked to you before getting started… I would have still joined CENTURY 21 Hecht Realty, but would have been better prepared.


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