Expert: Jim Root - 3/29/2008

Question
Hi, I was wondering if real estate was a productive industry and if so can you give me some pointers.
Thanks-John

Answer
Hello JOHN--

So, you're interested in becoming a Real Estate Agent, are you? And you're looking for some insight--pointers? I'm happy to help! The first thing you need to know is that "20% of the Real Estate Agents in the Country make 80% of the money earned by licensed Realtors in the USA!" Or so it's said!That means "personal productivity" based on knowledge, skill,and hard work counts more than does the production level of the "industry" as a whole!

As for your question about the productivity of the industry,the answer is not a simple one. The National Real Estate Market is cyclical, with "peaks and valleys" if you look at its productivity on a chart. Some local markets don't follow the national trend, but all are somewhat affected by the national trends. In a "peak" time sales are up, there's high productivity!(High production levels create a "Seller's Market") During "valley" times sales are down and so goes production! (Fewer sales create a Buyer's Market).

Overall, one can make good money as an Agent. One probably shouldn't go into the Real Estate business as a Salesperson during a "Seller's Market," but should wait until the market has started up from the "valley" and is begriming , at least , to create a more Buyer-friendly market in his/her specific geographic area.

Right now the Real Estate markets are almost all "on the down side!" Home Sales are down, Realtor incomes are decreasing,fewer Mortgage loans are being approved and closed--about the only thing "up" is the foreclosure of existing homes and an over abundance of newly
construction houses ! I'd not suggest that you jump into a Realtor job just now unless you're in one of the very few "pocket markets" that is still in a favorable production position--that is, with a good balance of buyers and sellers and appropriate inventory for sale at reasonable prices and with available financing!

In the meantime, while watching the market for signs of a return to the "Buyer's Market, I suggest taking some Courses on Real Estate through your local Community College or Association of Realtors. In all States, one must be licensed to "practice" Real Estate, so working on getting your license now would be helpful. Contact your State's Department of Licensing to find out what you have to do--likely a 60-Hour(approved by the State for "Pre-Licensing")Realty Course, plus passing a Real Estate Salesperson Examination (given by the State.)

Its also suggested that one not start in the business of Real Estate sales without having a "back-up" Bank Account--with about 6-months worth of income in it--as it may take up to six months for a new salesperson to start receiving his/her commissions. Remember, this is a commission-only job, no salaries/no hourly wage!

To learn more about the Real Estate industry, I'm sure that your local Association of Realtor's can provide you with lots of information on the job of a licensed real Real Estate Agent and Realtor-Member of their organization! And if you wish to ask further questions of me, feel free!

Good luck!

--JIM