As the down market starts to stabilize it finally seems like a decent time to blog about what becoming a Realtor® looks like. Everyone is interested in real estate. It is actually mind blowing how many people say they would love to be a Realtor® and equally as eye opening how many people follow the real estate market as a genuine hobby. Real estate never sleeps and can never be truly predicted which keeps it top of mind to so many people. Lots of people have real estate as their biggest investment so it certainly makes sense why so many people keep tabs on the industry.
That said people often ask what it takes to be a Realtor®, how hard is it to be a Realtor® and is it a good time to be a Realtor®?
I will start the conversation off with, are you entrepreneurial? If you are not a born entrepreneur I would strongly recommend you do some self-reflection and assess if you have an entrepreneurial spirit. I have been an entrepreneur my entire life and have to admit that real estate is the hardest and most mentally challenging career of my life. That said, it is also the most exhilarating but it is NOT for the faint of heart. If you don’t like being stressed this might not be the career path for you.
What is the biggest piece of advice I can pass along?
You have to have good time management skills to be a good Realtor®. You have to be good at many things but time management is a big one, in my opinion. To be a Realtor®/Entrepreneur is to have nobody to truly answer to but you. I wake up every morning with a burning desire to move my career in a positive direction. I wouldn’t say I focus so much on money but the opportunity to be very successful in my career and the prize at the end is financial stability. Because you are your own boss you have to have a plan with your time. You need to block out your time to grow your business, you have to block out time to spend with your family, you have to block out time for your own extra curricular and you always have to have openings to show homes! Without good time management you can easily slip into too much work or too much leisure and things can become out of control pretty quick. You also need to have supportive people around you. Real estate truly can be stressful and time consuming and it can be hard on families so having someone in your corner who truly supports your career is very important.
What are the steps to becoming a Realtor®? Is it hard?
For better or for worse, the point of entry for becoming a Realtor® is low in Newfoundland and Labrador. Don’t let that fool you completely though because the real work starts once you are fully licensed and have your boots on the ground. While the point of entry is low I will complement our industry leaders for making positive steps in each of my six years and continue to show leadership by challenging the old industry standards. Much of the leadership with the association has changed and I believe the future looks bright.
To become a Realtor® in NL you have to write and pass a test that costs about $1500.00. With your $1500.00 investment you receive the manuals to study and the opportunity to write the exam. The exam is offered every two weeks and you get three opportunities to pass the exam to become a Realtor®.
What does it cost to get into the industry?
Your initial $1500 to write the exam is your first investment and once that piece is completed you have to get licensed with the board, insurance, signs printed, business cards and those general business start-up costs. Depending on who you chat with most agents would probably tell you $3000-$5000 should be good. You can spend as much or as little as you want but I would think a minimum of $3000 to get yourself started.
How do I choose what company to work with?
When I first looked at becoming a Realtor® I set up meeting with many of the brokers around town. The broker is generally the owner of the specific company and is essentially the person who you would answer too. I personally set up meetings with top brokers around town and listened to their pitch and was able to focus on the information that was important to me. One thing I learned after these meetings was if you show interest in a real estate company they will want you! Granted you have to be interviewed and a fit for their company but generally you are fresh meat to the industry and nobody wants to see you end up with the competition. Nobody can predict the future on who will become a top real estate agent so every company will show you lots of interest. Don’t be overly fooled by that, it’s great for the ego but make sure you ask the right questions and find a company that can help you with your career. Every company offers something different and you have to be in an environment that you are comfortable with.
What was something that surprised me when I became a Realtor®?
The industry is a very friendly and welcoming industry. I have been on sports teams and in business my entire life and I was shocked and impressed with how helpful my fellow Realtors® were with me when I became licensed. There is always someone at your office that is willing to lend you a hand! For the most part, Realtors® are only too eager to help each other succeed. Realtors® live in a very competitive world and I am always amazed at how thoughtful and helpful agents are to each other. You are not alone as a new Realtor®, you are not shunned and you are generally welcomed to the industry with open arms.
When do I start making money?
With all the broker meetings I had there is one main piece of advice that stuck with me;
1. It is going to be about 2-3 months before you make any money.
2. If you aren’t making money by 6 months in the business you probably aren’t a fit.
Those two points resonated with me and are pretty great pieces of advice. Even if you are a rock star straight out of the gates you are not able to get paid much sooner than a month in the business. The average home closes about 30-45 days from an accepted offer and you don’t get paid until after your clients home is sold. So, if you sold a home in your first day in the business you are still at least a month before you see that pay check, best case.
Can I make a ton of money?
Not easily! I think I would have to go back to my initial point that to become a Realtor® is to fully embrace being an entrepreneur. Trying to become rich is the ultimate incentive for being an entrepreneur. I recently read a line; “entrepreneurs are the only people on the planet willing to work 80+hours a week for themselves to avoid working 40 hours a week for someone else” NAILED IT! Can you get rich? Absolutely you can, but not overnight, and not easily. The average Realtor® makes about $50,000 a year so to think it is a path to swimming in cash you are sadly mistaken.
When you are doing the quick math in your head on how much you think your friend the Realtor® is making on each deal take a minute to do the proper math. The industry standard to get paid is 2.5% commission on a home sale. The listing will pay out 5% but that gets split between two sides, the buyer’s agent and the seller’s agent.
$200,000 Sale
5% = $10,000
$5,000 each side
Brokers cut (it costs money to work at a company and most companies cost $20,000 to work with. The company might take 5%-40% which is irrelevant to the bottom line, $20,000-$30,000 it will cost you to work under any brand. I have gone with 20% brokers cut as a clean number)
-$1000 Brokers cut
$4000 left for you
50% loss to the tax man.
$2000 profit.
Keeping in mind that the average home takes 85 days to sell in this market (being positive) you are working for 2-3 months for $2000. Also keep in mind that you will incur expenses within those months driving around and even bigger money to market a home if you are representing the seller; professional photos, signage, advertising, etc.
Do I need to do it full-time right away?
There are no rules to the hours you have to work. However, I don’t know a successful Realtor® in this town that doesn’t work full-time. There are lots of people making a few bucks and being a part-time Realtor® but I strongly believe that you need to be all the way into this industry or all the way out to truly make good money.
There are so many interesting things about the real estate industry and so much that I could talk about but I will end with this;
If you decide to become a Realtor® you need to educate yourself. You are dealing with the biggest investment of people’s lives and that is no joke. Equally as important is the responsibility of the person choosing you as their Realtor® but that’s another blog. I personally surrounded myself with a top team for the first two years of my career so that I could learn the business properly. I am grateful for that experience. Olga Hitchen was the most influential person in my growth as a Realtor® and not a day goes by that I don’t implement things that she taught me. Without the guidance of Olga, I can’t say that I would still be in the industry myself , Thanks Olga/Queen.
To be a Realtor® is to be an Entrepreneur, every Realtor® can appreciate that; you will go to bed thinking you are rich and wake up poor, and you will go to bed poor and wake up rich! It is exhilarating and I have found in my career that if you do things right and with integrity you will win more than you will lose.
I love the freedom of going to the gym when I want, going to see my kids school plays without having to ask for permission, being my own boss, and having nobody tell me how successful I can become. I love the challenge to sell homes in a tough market and to trying and separate myself from the competition, every day is a new adventure and that works well for the type of person I am. I LOVE BEING A REALTOR®!
Currently I reside at RE/MAX Realty Specialists because they are a leader in both technology and education and the world’s #1 training company (THE WORLD). Those two pieces are the most important pieces to my business so I work under that umbrella and am very happy with what the company does for my business. You have to find a company that works for you, you have to crunch your numbers and you have to do the work to make big money.
REMEMBER THIS: Everyone knows a Realtor® so if you decide to join in on all the fun what is it that you are going to do that will separate you from the competition?