I got my real estate license earlier this year, but have not yet practiced as a real estate agent representing sellers and buyers. I've just been making offers on my own behalf as a buyer/wholesaler. The market seems to be turning and I'm thinking that now could be a good time to focus on building a business as an agent.
What are your thoughts on jumping in as a full time real estate agent now?
I live in Maryland in a suburb just outside of D.C. and would focus my efforts here.
I appreciate your input!
I've been asking myself the same question for a while now. I've been licensed for some time and have never done anything with it. When doing research about what to do with my license, I read a study about licensed agents and the housing market in general. Basically the better the housing market, the more people become real estate agents. Of course I can't find the article now but I'll keep looking.
The reason I bring this up is that I thought with lots of people getting out of being an agent, this would be a good time to become one. I figured that if I could build a client base while the market is down then I would be well positioned when the market turned around. Of course that is still probably a good idea, but the upturn probably wouldn't be as good as I would hope.
In the end, I decided to focus on investing right now.
I think it would also depend on what you want to do as an agent.
My suggestion would be to develop a plan that would work today and grow as things improve. An investors realtor, or property manager. Work with those who wholesale or flip, that price their properties for fast sale. Forget the retail listings or buyers agent, find a niche. In my days there were REO agents doing BPO's before they became the biggest lister in the office, the builders listing agent, who listed builders spec homes (he's hurting today), the spanish speaking latina who worked...you guessed it. The older (30 yrs an agent) who handled marketed to empty nesters downsizing or to those entering assisted living. You get the idea. I knew one who was an ambulance chaser. He'd farm the wedding/divorce/obits published in the paper. Any type of life change would spark one of his list/buy with me post cards. Find volume in a particular niche, and work that niche. Not much opportunity being a relocation expert today. If you are already an investor who buys/holds/wholesales, know others of similar interests, and know the practices and mindset, why not focus in that group?
Christopher - you're thinking the same way I am. Let me know if you find that article.
Ralph - you make some great points and that is exactly what I'm wrestling with. I would like to work with investors because I am one, but working with retail sellers and buyers is fine too. First and foremost I want to be an investor myself. Staying in real estate as an agent (as opposed to picking up accounting work, which is my background) will give me more flexibility to continue and be closer to my personal investing. It seems that the market is good for building a niche and representing investors as a buyers agent. One concern is that the homes investors buy homes at a much lower price point. In my county investors purchases would be at ~100k versus the ~250k median price of homes sold to retail buyers. So I'd have to sell more than twice as many investor homes than retail homes to get comparable commissions.
The other thing I'm bouncing around is whether I should stay with my discount broker that offers 100% commission with no day to day support, or join a traditional broker (with a strong brand name) that will take a big chunk of my commission, but will provide significant training on traditional real estate listings and buyer representation and will also allow me to focus on investors and/or retail buyers.
I've only been a Realtor for 3 months and I don't have any traditional training, I'm kind of learning as I go.
It seems that going to the full service brokerage would be my best option only if it's realistic that I can do both 1) build a niche working with investors and 2) also develop a more traditional book of business focused on maximizing listings so when the market turns I'm positioned to benefit from the pick up in retail sales.
What do you think?
With the number of REO's and short sales, and the "shadow" supply of REO's currently held by the bank, are there really very many retail sales right now? I imagine there are some people that would pay a retail price for not putting up with the time needed in negotiating a short sale or dealing with "as-is" REO's and those delays, but I would think it may already be a 3 or 4 to one ratio right now. Rather get the 3 or 4 small sales than the one retail sale. But, the license will do both, and remember, you're dealing with investors, and that has to help your own investing opportunities.
If you've got a 100% commission with a no support broker, he's probably not going to care if you buy or sell outside of the MLS. If you chose a more full service broker and a commission split, make sure they are good with you wholesaling. Anything you buy or sell outside of the Brokerage house is a lost commission for them, and they are likely hurting for $$. Also, has been pointed out, you can't always get a commission on your own personal sales. Here are some BP articles and blogs you might want to check out.
FWIW, I wasn't wholesaling, and I went with a Coldwell Banker Franchise. Their biggest help to me was with the contracts, and making sure I didn't really screw something up. Second, was getting an almost unlimited amount of help, ideas and suggestions from the others in the office. If there was a downside, some of the full timers who knew I was a Realtor second (had another job) felt I was, well, an interloper, dilly-dallying as a realtor, but, as long as I didn't infringe on their market, they put up with me.
I'm sure there are many more articles, bullitins and formum threads on the subject. Let us know what you decide.
Something to check out is if the E & O insurance carried will cover when you buy/sell your own properties.
But considering the write offs from MLS dues, etc and the advantages of having the MLS access and a Supra key or lock box codes etc, I say go for it. Plus free training from both your MLS and company.
It is not the time for someone to get into the business as a traditional agent, but a great time for an investor agent.
I have begun courses for my salesperson license. Still looking around at various brokers here in town, though I've been most impressed with RE/MAX's education standards.
I feel sorry for RE agents right now. Unless you have an REO account.
Our typical flip property gets 10+ offers in under 7 days. All the agents hound me until we put the most qualified person into escrow.
Some time along the way, I usually get the story... this is my 30th offer for this client and we've missed them all. California might be different, but I sure wouldn't have the patience in this false sellers market.
I do both sides. I do investing and listings. First when a seller contacts me and I think its a deal. I will beat the offers until I cannot do the deal. If I still see motivation there but cannot make an offer that makes sense for me and them to buy, that is when I put my realtor hat on.
When this happens the seller has already been exposed the cost of selling a home. REO's are given to the BPO agents in my area. I have never been able or wanted to crack that code. We have something different than most of the areas of the country as most of the REO's in our area that are moving have been built since 2004. NEW construction and developments. Occasion we will find a home that needs to be fixed. We have our share of 2/1 and 3/1's.