BiggerPockets

I have been in the cell phone business for 6+ years and I am considering a career change. I am thinking about becoming a RE agent then getting my brokers license. I think I would enjoy this industry a lot more. I have a few questions though. With the current economy, should i even be considering doing this? How many months of living expenses should I have saved up before making the career change? Would I be better off with someone like Coldwell Banker, Re/Max, etc., or find a small local broker to work under? I am in the western suburbs of Chicago. Should I get my education through realestateexpress.com, my local community college, or Coldwell Banker has classes? Any information would be appreciated.

Just have to be prepared to not make much money starting out. Get your license on the side while keeping your current income. You should be able to take classes at night or on weekends.

Another point, you mentioned a brokers license. Each state is different but if you were ultimately looking to start your own shop you will probably need a certain number of years of minimum experience to get a broker license. Your state real estate commission site should have all those answers.

As far as firms, interview several big and small they are all different, find a broker you like, that will go along way. A big firm may not be interested in training a newbie, but big agents may be looking for someone to "train" for a small cut. Small places may be more willing to train you.

Has anyone had experience with Real Estate appraisal? I was thinking about looking into that career as it sounds like it could be a big business opportunity in 2011? I love the fact that you can set your own hours and basically run your own business. Any thoughts?

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I will tell you like it is. I have been in this business going on 8 years.

I am a broker and own my commercial real estate brokerage in Georgia.

Each state is different.In Georgia you have to be licensed for at least 3 years continously active and in good standing to get a brokers license.

You can take the test in year 2 but not become a broker until the time requirement is met.

As far as reserves let me clarify a few things for you.Unlike the JOB you have now real estate is a free for all where you have expenses that run into the multiple of thousands of dollars annually even if you close on nothing.

Also the average agent it says makes about 35,000 a year.This is UNTRUE. What they do is take the top 5% earners in the field that make gross over 100k a year and combine those with the few making 40k and the many part-timers or full timers who make 20k or below (which is the majority).

The reality is 85% of new agents are out of the business within 1 year.Of the 15% that remain another 75% of those are out of the business after 3 to 5 years.

It is one of the most toughest and demanding fields out there to be successful in the marketplace. (TO BE SUCCESSFUL) is the keywords.

You will see many trainers say look at new agent (Sally Smith) in recruiting she is a MILLION DOLLAR PRODUCER.

What they don't tell you and the public is that is in sales price volume.

If you take 1 million in sales times 3% you have just made 30,000 gross commission for the year.You being a new agent you will most likely be on say a 50/50 or 60/40 split with the brokerage.

So now your commission before taxes and expenses is 15,000 to 20,000 if you are lucky.Then take away wear and tear on the car and gas ,properties you spent advertising on that didn't sell,thousands spent on licensing fees and other items and now the Million Dollar Producer is below the poverty level !!

In residential if you got a real estate license TODAY and hit the ground running you will need 3 to 4 months to get a check.

Licensed today then get a buyer.Spend a few weeks showing property.Finally get one under contract.Closing takes 2 months.You are now getting you first check if everything goes perfect in 90 days.

This is for residential.If it is for commercial checks will be larger but average closing time is 6 months instead of 3.

So if at the cell place you make 36,000 a year.You would need minimum 18,000 as reserves for 6 months of payments and to be safe 36,000.

If you have just a few K FORGET IT.

If you want get your license and put it with a per transaction company for your own investments while you feed your family.Then after maybe 1 year or so you have income to replace your JOB then you can scale down and quit.

I have 25 agents and I see this burnout cycle happen all the time.I don't want it to be YOU.

good luck

Take Joel's post and print it out and read it a couple dozen times, then decide if you still want to do this. (You also might watch Glengarry Glen Ross...)

I'll add a couple of my own thoughts, too, though. First, I'd think about how you plan to succeed. Are you going to go after listings? Or do you want to be known as a buyer's agent? What kinds of properties do you want to specialize in? What areas? And will you work with investors or owner-occupants or who? I do think you need to have a niche, and then you have to have something that you bring to the table that will make that niche happy. You're better off being something to someone than everything to no one.

As for the education, you can get it for free if you're willing to commit to being an agent with the real estate company, or you can just use one of the online programs, but that comes with a modest cost.

You'll need to think about whether you want to work for one of the brand names, in which case you'll give up more of your commission, or one of the lesser-known, local companies, in which case you pay a small annual fee and you pay a fee on each deal you close. If you're a big producer who does not need the "branding" from a nationally known company, this could be a viable route.

I do not think you can work at ReMax because my understanding is that they do not take new agents, and because they do not do a split with their agents, their monthly fees are high. Some say you get the best of both worlds there, because I think ReMax has a solid reputation, but you still get to keep the bulk of your commission. You just have a higher monthly cost to the house. Ideally, this approach keeps the solid producers around, which in turn benefits the brand, and so on.

Let us know what you decide to do, and why.

Joel's post hits the nail on the head, and I'll try not to repeat anything he said, but did want to make a few of comments of my own.

1) Don't expect business to come to you. There have to be reasons why people will use you as their agent. Your good looks and charm aren't enough, you need solid professional relationships established. This is something I wish someone had told me before I started. I spent my first 3 years trying to develop these relationships while coasting off of "lucky" relationships with buyers and sellers that were "handed to me".

2) Find a niche. The weirder the niche the better. Mine is divorce. Strange for a guy who has never been married (nor divorced), but it just so happens that I hit it off with a divorce attorney while doing a CMA at a Starbucks. Now I actively seek relationships with other divorce attorneys (on purpose, at lunches, mixers, etc), but I found my niche on accident. You would be wise to find yours on purpose.

3) Don't compare yourself to other agents. It's the worst thing you could ever do. You're usually doing better than guys who are crappy, and worse than guys who have a ton of experience. That's to be expected, but who gives a darn? As long as you are doing what works for YOU and supports the lifestyle YOU want to lead, nobody can judge your business but you.