Considering becoming an agent/broker

[Josh Bryan]

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.

[Joel Owens]

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