Expert: Jessica Bryan - 9/28/2004

Question
Jessica Bryan, I am thinking about getting my RE license by enrolling in a class at my local college and taking the state exam. what is the hard part of just starting out? what is the % of folks who don't keep their license longer than a year? I have heard it was a high #. why? I'm just looking for your opinion? I think I would really like the industry and i want to make a change. I would appreciate your thoughts and comments.  Jim  

Answer
Dear Jim;
To answer your first question: The hardest part about starting out in real estate is sustaining yourself while setting up your business. So much depends upon where you work.  In a busy market (usually the spring) you can find clients right away, but in slower markets it may actually take a few months to make your first sale.  Right now we are experiencing a before the Holidays rush which will be over in a few weeks. Then, November and December are very quiet.  The market picks up again in Feb. after people have had a chance to recover from the end-of-year rush and expenses.  This means that if you take a class soon you might actually be able to take advantage of the spring market.  If you know lots of people, you begin calling and letting them know you now have your license.  Ask for referrals and market yourself heavily in the beginning. If you don't do this you will sit around waiting for the phone to ring.  So...the hardest part is paying for the marketing, setting up your office, contacting people, and basically spending time and money without any income.  I tell new licensees to plan on spending about $10,000 to get their office and business set up.  Obviously the number can be considerably higher depending upon the company for which you work and the benefits--what is paid for and what you must provide.  Why do so many drop out the first year?  It's not an easy business.  There are a lot of ups and downs, and many don't have enough money to live off of if they don't make sales right away.  They also learn that the business is changing and commissions are being cut and/or shared via referrals and affinity programs.  The average real estate agent makes about $29,000 per year.  (Of course that includes the active with the non-active licensees).  However, for a person who thinks they will be making six-digit incomes, there is often a rude awakening that gets them running back to the old dependable salaried position.  Being in this business and as an independent contractor, an agent must be very self-motivated to be successful.  So many people think that they are suited for this work only to find that there is too much paper work, or liability.  There is also a high level of stress.  Consider what the clients are like.  It is a very stressful time for them and they often take it out on their agent.  I am painting a bleak picture, which is not completely accurate.  When one is working on a sale and it takes too long and then falls apart, it is devastating.  But then, when a sale goes quickly it is exhilarating! Some are just not ready for the highs and lows, and still others can't wait out the slow times.  Hence--heavy drop out rate.

I don't mean to turn you away from the profession.  I just think that going in with your eyes wide open will help you with your decision.  

Good luck and best wishes.

Sincerely,
Jessica Bryan
Managing Broker
House to Home Realty Services