All Forum Posts by: Craig Moore

@Craig Moore If you are a new licensee, a Keller Williams franchise would be a good fit.  They have more training content on their intranet than you will want to try and digest.  They also have a decent split for new licensees: 70/30 with the broker and a 6% royalty to KW.  You also have the name recognition. 

A great option would be to sign on a team as a buyer's agent.  You will make less per transaction, but will be able to immediately start working with clients.  After a few months showing houses in your market and working your contracts to close you will have a much better grasp of the profession and your local market.  You can also lean on your team's experience and have back-up when you run into snags or do not know how to proceed with a situation.

Craig Moore There doesn't necessarily *need* to be huge numbers of failures. However, there's a very low barrier to entry and it's easy for someone to think: "That home sold for $1M, if I got both sides of the commission it's $60K!" They don't think about fees, commission splits, etc. and the Million Dollar Listing ecosystem only enhances the perception of a near-infinite upside. I think (personally) they also think "my friends will list with me and I have a lot of friends". Again, the world just doesn't quite work that way. The top-performers will always gravitate to commission-only. The idea of earning less because of "base compensation" is just abhorrent to them, they are meat-eaters. In order to keep them you can't afford to reduce your commission plan to pay base compensation to keep new agents around. Every $1 you pay in base compensation to a new agent that may or may not perform is $1 more you could pay your top performer to keep them with your firm, generating revenue, and happy.

Your guesses on why potential agents fail is comical. I read in the papers during the current health care debate many believed that people on medicaid are drug addicts, have mental problems. In the real world, things are seldom so simple.

I myself took courses for a real estate license, and took the licensing test. My wife of nearly 40 years spend the 1st 2 years out of college working as a real estate agent. I partnered with real estate agents. Whether they stay in the field or not depends on the economics of the particular job.

About 30 years ago, most of those jobs are commission based. The way it worked is the commission, around 5 to 6 percent is split 4 ways, buyer broker, buyer agent, selling broker, selling agent. So if a $100,000 property is sold, an agent will have commission of $1,500 gross. If you could live on $1,500 gross a month, you need to sell 12 such houses a year. Question is, if you're a newbie, can you do that.

Nowadays around here, the deals are different. An agent has to work under a broker, and the broker charges a desk fee. On the other hand, you get to keep 95% of either the buyer commission or seller commission. Question is, as a newbie, can you afford to pay a desk fee to work, that is pay someone to work?

My wife's best friend is a stock broker. Her friend tells us that 80% of new stock brokers wash out their first years. Why? The brokerage requires them to make so many cold calls a month, and be able to obtain so many new accounts this way. If they can't meet their target, they're asked to leave. But here, you earn a draw in the meantime which you don't get when you're s real estate sales agent.

On my wife's first year as a real estate sales agent, says she sold three houses. But she has to use her own car, buy her own gas, to drive people around to do showings. If your figure the commissions, deduct out the car payments, gas, there's little left. Then, her main complaint is she's forced to show overpriced houses she knows has a small chance of selling.

And then, there's a good friend of mine who's a real estate agent. Mentioned he had to go to a dinner one night, his brokerage is honoring a few "million dollar producers" for the year. I said "congratulations". He said "for what"? Explains that his commissions for year is less than $20,000, and he had to pay for his car, gas, insurance. What's left? A few years later, he got a job as a title company closer, makes more collecting a commission per closing than being a million dollar producer. I know bank tellers that makes more.

Now, there's plenty of successful real estate sales agents out there. They have the personality, the drive to make it. My wife's friend the stock broker, not only stayed, but was rewarded with her own office being a successful broker. She says the agents who washed out, asked to leave, do manage to open new accounts, but not enough of them. So what happens is these accounts are divvied up with those brokers that stayed.

In conclusion, my wife, my good friend the real estate agent did not do as well as they would to in the real estate sales jobs, and then went on to other endeavors where its a good background to have. As a matter of fact, we went into real estate investing . Nothing wrong with that, And I can assure you they are not drug addicts, or suffering mental problems.

Craig Moore It's a commission business. It should be intimidating. These failure numbers should turn away those who can't (or aren't willing to) go all in. Any commission-driven business has massive failure rates, it's the only way to overcompensate (I know, loaded term) those who are hyper-successful. It's literally the nature of the beast.

The irony is that the far bigger issue would be if the industry wasn't open about the failure rate. If the failure rate is 90% and these schools told you that the success rate is as 90% you'd (rightly) call them a scam and say they were using misleading information to get your money.

Go Google "post-secondary for-profit education" and see what happens when you're overly optimistic about earning potential after graduation. It's far from a 1:1 analogue to the real estate world but it does show the downside of institutions being overly optimistic about life post-graduation.

Hey Craig! You are taking the right steps with the best mindset to start this journey to freedom. 

As a new agent, the most difficult part after a couple of months studying to pass the test and get licensed, is to realize that you know 'nothing' about this business –and just a little bit about the laws you shouldn't brake. You can easily feel overwhelmed with offers by this or that RE guru, coaching classes, seminars, webinars –of which I took many. As soon as you get your license, phone is going to get busy, not with business opportunities, but with brokerages, companies trying to sell you services, websites, zip-code leads, etc. This can be a very expensive business. Don't start spending money until you have a business plan, you are ready to track your numbers and stick to the plan long enough to see results. 

I really don't know if there is anything like "the best first steps for new agents", but I can tell you that this profession (business) in nothing like standard. You have to build your own business and find out your niche within this Industry. Learn from everyone, but also think outside the box. 

Start from your place, your sphere of influence, family, friends, neighbors, and look out for 'that' which no one else is doing or everyone else is failing to service. Focus on your strengths to build up your business, and then work on your weaknesses to get to the next level. 

When you identify your strengths, you can shadow the pros. E.g.: If you are trained for physical endurance, you'll probably kill it with door knocking. Take a look at Bryan Casella on YouTube: What Is The FIRST Step To Get Into Real Estate?. He was also an athlete like you and he's and expert on door knocking. Just do what he does. Go out there 3-5 hours a day and knock every door in your neighborhood... This is just an example. 

And going back to the Brokerage, it should only fit your business plan. Getting into a 'team' is tricky, because that will not be your business, but your team leader's business, and you will only share a small part of their success. You will help them grow, while still being an independent contractor with no salary. For many agents, this works great. Just know what you're getting into. 

At the end of the day, door knocking, cold calling, talking to your sphere of influence, mailing, social media marketing, it all goes down to bringing value to people as the local expert, educating, giving them something valuable, and then asking EVERYONE this simple question: "Have you been thinking about moving?". Or.. "Do you know anyone that's been thinking about moving?". 

Wish you the best in this amazing new opportunity to build your financial freedom.

I love this topic as I am fairly new to real estate myself. I think it really depends on your location and goals in deciding on a brokerage. For myself, I chose a small family brokerage in my area. The reason for that was because I knew that I wanted a runway to quickly ramp up as an agent. My area is extremely competitive and inventory-strapped, so I knew that I needed a competitive advantage in order to get in the game.

My broker has been in business since 1963 and has a golden reputation in our community. We have 8 agents in our office and we all work as a team. I love this because it allows me to hit the ground running in helping with listings, appointments, and open houses. We are also a very structured office which I thrive off of. We have a morning meeting every day from 8:30 - 9:30am and I work 40+ hours a week. I choose to do this because I wanted to jump head first into the business. I love having the accountability that being in a team environment gives me. 

I have been working as a realtor since March 6th and I have already written an offer for a buyer, will write another on Monday, and have my first listing appointment tomorrow! My goal is to do 6 transactions this year. I credit my quick start to working hard, fully committing, and staying consistent.

@Craig Moore I think the main reason agents under perform is because they don't have anyone holding them accountable (blanket statement, I know). Its one of the benefits and weaknesses of the job, it all depends on your personality type. 

I always recommend people start off while working another job. That way you have some other income coming in while your getting up and running. Or have 3-6 months saved up for living expenses because it could be that long before you bring in a commission check. 

@Craig Moore Living with your parents will definitely help. I also forgot to mention all the *extra* fees you'll have to pay: Association Dues/MLS fees (mine is $800/year) and Supra key monthly rental. It's annoying but you need to join or you won't have access to your local MLS or have a key to open houses to show clients. Some homes will have combo lockboxes, but if you don't have a Supra key, that will severely limit you.

I'm going on my third year and I enjoy the flexibility it allows me. I could never go back to 9-to-5. I may not be able to give you an accurate perspective as real estate is my family business, so my first year was very lax. My second year was probably like most people's first year as I attempted to be a more independent agent, but not entirely so either since I already had a history of sales from my first year. It was difficult for me that year, so I can only imagine how difficult it is for new agents starting off with zero experience.

As for work load, I work 24/7. You're on call and work when clients need you, which may be every single day. From my understanding, commercial agents work less and have stricter business hours.

My recommendation may be to start off on a team. Most team leaders will hand you leads but any and all clients belong to the team leader should you ever decide to leave. Leaders will also take a cut of your commission (on top of what your broker takes), but at least you'll hit the ground running.