What No One Will Tell You About Getting Into Real Estate
So you're thinking about getting in to real estate? Did you have a transaction with an agent that made it look easy? Or one with an agent that made you think, "I could do that so much better?" Or how about because you love HGTV shows and looking at houses?
These are a few common reasons that people get into the field of real estate. No reason to do it is a bad one; but the most important one should probably be that you really want to help people. You want to make someone's life easier by providing them incredible service and help reduce their stress in a life event than can be quite stressful.
When you meet with a brokerage to look at getting into real estate (and you should do that early), you need to ask a lot of questions. How do you know what questions to even ask when this isn't something you've done before? You can't - so we are going to give you a few tips here!
Training - the classes you take to get a license will not even come CLOSE to preparing you to handle a real estate transaction. You will NEED more training once you are licensed, but you don't want training that will put you on hold. When you are licensed you need a system that provides on-the-job training; not holding pattern for several more weeks until you are trained fully.
Costs and Fees - it is not cheap to be in real estate. You will need to know what the company you are going to work for will be charging you each month, what to expect for MLS and all real estate associations fees.
Start-up Costs - some companies will help pay some of these costs for you. Often the return for that is a lowered commission split, contract, or a pay back arrangement. Evaluate these for the long game - do the math. Is committing to a lowered split for getting these costs covered the best investment in your business? It may be, but it also may cost you thousands.
Signage and Leads - what do signs look like? Is your name and phone number clearly visible on the signs? Who pays for the signs? Do the signs generate leads? If they do - where do the leads go if someone calls into the office number? Are you charged referral fees on internet leads? What about fees on referrals from other agents around the county?
Commission Structure - companies have MANY different models. You are starting a business - you need to know the numbers and you need to understand them. Don't be scared to ask this question early. Be careful though to evaluate the value proposition of the company overall. A high split doesn't mean you will make more money since you might pay for more and get less support; a lower split also doesn't mean you will make less money if you are getting more from the company.
Support - who is there to answer your questions? Who will be helping you through paperwork on your first deal? How can you communicate with this person or these people? If you have one point person - is there a phone tree so you are never left out in the cold with a question? What online resources do you have when you are working on something after hours?
Technology - what technology does the company provide? Software, systems, etc. You will want a good system to run your database, you will need a medium of communication with other agents in the company, and you will want technology that gets your listings out there to a maximum level.
Business Building Training - real estate is not just about showing homes and getting the paperwork done. You need training to build your business as a business. You need to know how to prospect and how to build a sales pipeline that not only sustains you but that also grows with you.
Hours Expected - no one wants to admit this to you but you will likely need to spend 60-80 hours a week your first few years in the business to build your success that will sustain past the first two years.
Hiring Process - is there one? Are there assessments done by the company to help you determine your strengths as they relate to the industry? Does the company have criteria for hiring? Is one interview all you need or multiple interviews?
Contracts - we don't believe in them. Some companies do. If you aren't happy at Keller Williams you have it right here in writing that we will sign your transfer to another company and we will release any listing you have at the time for you to take to another brokerage is the seller desires that, regardless of where that lead came from, without a referral fee or hassle from the us. Your personal happiness matters more to us than company dollar we might lose by letting you get what you need to succeed, even if that isn't with us.
You Are Going to be Broke for a While - as people join the real estate industry they often have a glamour view. Nice cars, well-dressed people, and big houses REALTORS live in. The reality is, you are starting a business so you need to capitalize that business. You won't likely sell a house your first week and if you do - that will take 30 to 45 days to close (and that's when you get paid).
If you were going to start a coffee shop how much cash would you need to do it? Could you do that with $10,000? $20,000? $30,000? In many cases your real estate business will be more lucrative than starting a coffee shop in the long run; you need to be sure you are prepared to make an investment in yourself and quite likely run at a deficit for a while. Quite commonly six months. We once had an agent that sold nothing for 11 months; then sold 1 million in month 12, just as she was ready to throw in the towel. Be realistic in your expectations and you won't get frustrated quite as quickly - plan your finances for a worst case scenario and hit the streets hard with great training, tools, technology and support and you'll never look back!
Keller Williams Value Proposition
We are so confident that we offer terrific value, training, support and culture to our agents that we encourage you to shop other companies, along with us. We hope that we will be a good fit for one another and if we are not, we wish you the utmost success in the industry and hope to do many deals with you!