Wednesday, September 10, 2008

So You Want to be a Real Estate Agent!

Just in case you are interested in knowing the costs and difficulties involved....

I am a Realtor®, so first off, I should explain that not all real estate agents are Realtors®. The Realtor Association is an entity that came into being to distinguish reputable real estate agents from the unethical and unscrupulous agents who were doing business, by developing a "code of ethics" in 1913. This organization not only requires that their members adhere to the Code of Ethics, but they provide lots of ongoing education for agents and act as our voice in government policy making. The reason I want to explain that is to show you what we receive for our $450 membership fee per year. I am a Realtor® and although I don't like paying that fee, I feel that being a Realtor® automatically adds to my credibility.

I hear complaints all the time about how much money real estate agents make and yet, when I look at the industry as a whole, we aren't doing so well!! Most agents (including me) have to share a portion of their commission with the brokerage that they work for, in addition to paying a desk fee. We have to be licensed and every two years we give a big check to Olympia to keep our license active. Oh, and then there are the 30 hours of ongoing education required to renew our license. That education is paid for by the agent. Of course, we need to be members of our local Multiple Listing Service, which requires a yearly fee. If we have listings, well, we need lockboxes ($95 per lockbox) and our Super Display Key (separate fee for having this key,) which allows us to retrieve the key to enter homes that we show.

We need a computer and if we intend to use a laptop at our office, it needs to have be a Windows XP (at least it does within Coldwell Banker Bain) so we can hook into our wireless office router. Then there are all the programs and websites that we need to be familiar with. I have a document that is single spaced on both sides of an 8x10" page full of login names and passwords. Way too many to try to remember. It has both business & personal sites, but mostly business. Newer agents can become overwhelmed with all the information that they need to sort through and become familiar with!!

I need my cell phone. I can't get by without it! And it provides internet access, has a GPS, is text message capable and keeps track of all my contact information including all my appointments. It syncs to my computer so I'm totally connected and current. Gotta have a Blue Tooth too, for when I'm in the car. Speaking of've got to have a car that is reliable and big enough to transport clients in. Kept in good running condition!

Most competent agents have a website. I have a webpage within Coldwell Banker Bain, but I also pay about $40 a month for my website ( Lucky for me this blog is free, but I wouldn't be surprised if one day I wake up to find that I will need to pay!

There are other programs that I have purchased and/or signed up for, including Top Producer, E-Neighborhoods, Tarasoft Titan and Proquest. Some I still use and some I have cancelled. Most require a monthly fee. With housing the way it is, I've had to cut some expenses.

I haven't even talked about the cost of advertising our listings. Some agents use their listings to promote themselves and then consider that to be advertising for their clients, when in reality it is advertising their name so they can get more business. I'm not saying there is anything wrong with that, but it does all cost BIG money!! Printed ads for houses don't work so well in selling homes these days since most folks are computer savy and can search easily online for their next home whether near or far! We do print flyers for our properties (I use Microsoft Publisher to create mine) and I like my flyers in color and on both sides of the page. That costs the agent money too. For me it is $.50 per side in color. There goes $.50 to $1.00 everytime someone drives up to pull a flyer.

When I have listings I need to provide shoe covers, a basket to put them in and a sign telling people to remove their shoes or wear covers. I need a flyer stand inside the house and oh, I need to put some of my business cards on display. (I had some double-sided full-color ones printed up to distinguish myself from the myriad of boring white cards.) The yard arm sign with the extra flyer box outside? Yup, I pay a fee for that to be installed and removed and it cost me about $800 for my "for sale" signs. I forgot, I also have 6 Open House A-Boards. They were several hundred dollars as well. I also had SOLD signs printed with my name on them. More money. You want "professional" pictures taken of your house? OK, there's another couple hundred (the photos I take are really pretty good, esp. compared to some of the stuff other agents use for their listings.....dark, wide-angle wowiness, drab for sure.) You want a slide show, or virtual tour? I like to provide that and as you might guess....more expense!

I mail out newsletters to over 200 addresses each month. Not a cheap endeavour! Postage costs money too. Any postcards that I send to advertise my listings. Yup, you are right, that comes out of my pocket.

Add the cost of my home office desk, file cabinet, old file storage boxes, file folders, binders, printer, fax, etc. etc. etc.

So, why AM I in this business??? I do love it! I really like people. I feel a great sense of accomplishment and reward when I can help people find the house of their dreams or get their current home sold. I have to admit that it is way more difficult in this current housing market! Lots of agents who have to support their families have had to find other jobs. It is tough to support a family with a commission job when the outgoing expenses are so high and there are few clients out there. I'm fortunate in that I am not the sole support of my husband and myself! I'm not doing so bad, but it would be nice to have my listings sell so I can actually get a paycheck!

Getting back to the huge income that we real estate agents make...HA! Sure, the ones who have been in business for many years and have listings coming out of their ears and more buyers than they can find time to help are doing pretty well. However, even they are struggling right now. If an agent is that busy, they certainly need a staff to help with all the work and you guessed it, the agent is responsible for paying for their staff! Lots of their "profit" gets eaten up just paying for help. And if they have lots of listings, they probably aren't selling and there is ongoing expense in trying to get those listings sold.

So, really, we are all in the same boat, whether we have a ton of clients or serve a few at a time. Money flies out the door! I plan on sticking around for a good long time, so I need to be wise with my money so I can fund the slower times in anticipation of the return of a strong housing market! And if you want to buy a me! There are some GREAT deals out there.

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