Real Estate Agent

Real Estate Agent



Real Estate Agent
Vital Information
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Start-up Investment
Low - $1000 (to become licensed)
High - $30,000 (to open a​ brokerage firm)
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Break -even time - One month to​ two years
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Estimate of​ Annual Revenue and​ Profit
Revenue $300,000 - $10 million
Profit (Pre-tax) - $18,000 - $300,000
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Your Piece of​ the​ American Dream
In 1986, the​ National Association of​ Realtors' census indicated there were 1.2 million real estate agents in​ the​ United States .​
Since most Americans dream of​ owning their own home, and​ 82% of​ all homes sold are sold via real estate agent, there is​ plenty of​ action to​ go around and​ you may be ideally suited to​ cash in​ on it.
In view of​ the​ tax changes coming into effect in​ the​ next five years and​ the​ current economic slump, one would expect the​ number of​ homes changing hands to​ have decreased but with the​ drastically lower interest rates, the​ residential market is​ still going strong .​
No matter what is​ happening nationwide, households are still being formed and​ everyone of​ them needs a​ place to​ live.
Two Years to​ Takeoff
Because real estate is​ a​ regulated industry you can't just decide to​ become an​ agent one day and​ go into business the​ next .​
There are three steps you must follow before you can open your brokerage firm:
1 .​
Licensing: You will need to​ spend, at​ a​ minimum a​ few weeks, perhaps a​ few months, preparing to​ take your state's real estate exam which leads to​ a​ license .​
Many community colleges and​ universities offer night or​ evening courses you can take in​ preparation.
2 .​
Apprenticeship: Most states require a​ set apprenticeship period (2 years or​ so) with an​ established broker .​
Your apprenticeship will teach you the​ practical aspects of​ real estate brokering that you couldn't possibly have picked up in​ school.
You will want to​ take your time and​ pick an​ established brokerage firm with abundant listings so you can earn a​ living while you learn the​ business, and​ don't forget to​ find out what benefits are available to​ you such as​ in-house training programs.
Remember, agents get paid on commission, so put aside enough money for​ essentials such as​ groceries and​ rent to​ tide you over until you receive your first commission check .​
Most agencies pay an​ average of​ 6 percent commission on residential properties.
3 .​
Brokerage: Many agents never opt to​ set up their own brokerage firms, but if​ you want to​ establish your own business, you'll probably be ready after you have completed your two year apprenticeship .​
You will have to​ be approved by your state's licensing board who will look at​ your performance record (listing, etc.) and​ the​ number of​ sales you've closed .​
You may be required to​ take some additional courses before you receive the​ go-ahead to​ hang out your own shingle.
You have a​ few more questions to​ ask yourself before you begin your business .​
Do I​ want to​ hire other sales agents or​ do I​ want to​ maintain a​ one-person office? Shall I​ Become part of​ a​ franchise (about 15% of​ agencies are franchised)? You will also want to​ decide how dramatic and​ elaborate your campaign to​ bring in​ buyers will be .​
Do you want to​ use video-listings or​ television spots? You will want to​ factor these costs and​ any other advertising you are going to​ implement into your start-up budget.
Three Keys to​ Success
In order to​ be successful in​ the​ real estate industry, you will need to​ have an​ abundance of​ the​ following: product knowledge, a​ willingness to​ hustle and​ inborn sales ability.
Product knowledge amounts to​ understanding your market, the​ particular types of​ homes you represent and​ perhaps most importantly, the​ financial capabilities of​ your area.
Interest rates are the​ Achilles heel of​ every real estate agent and​ you will have to​ stay on top of​ the​ myriad of​ financing techniques available .​
And interest rates and​ financial packages change all the​ time .​
Staying on top these facts, taking classes in​ financial techniques and​ knowing where to​ look to​ get the​ facts you aren't familiar with will keep you from getting stuck with clients who can't afford to​ buy or​ alienating a​ good client by letting them walk into a​ bad deal.
Part of​ the​ service you will be providing is​ to​ steer your clients into the​ appropriate financing package that will allow them to​ buy even when the​ market is​ soft and​ there isn't much money around .​
a​ good agent will be able to​ help a​ buyer decide whether they want a​ 15 year mortgage or​ 30 year mortgage .​
You will need to​ be able to​ talk finance as​ well as​ real estate.
Real estate agents don't just show a​ house and​ sign a​ contract .​
They must act as​ liaison between the​ buyer and​ the​ lender .​
The agent has to​ understand all aspects of​ the​ process in​ order to​ make the​ best deal for​ his client and​ steer them into the​ type of​ deal that will make them the​ happiest.
Hustling: You must have a​ lot of​ energy and​ time to​ dedicate to​ your business .​
You will not only be constantly trying to​ bring in​ new clients, but also trying to​ sell your current listings .​
The location speaks well for​ your business and​ draws more customers than a​ storefront in​ an​ unsavory part of​ town .​
Be sure to​ check out the​ ration of​ real estate offices to​ houses before you establish your office location.
You won't be in​ business long if​ you wait for​ buyers and​ sellers to​ come to​ you .​
You have to​ go out and​ get them .​
There are many different approaches you can take, for​ example, some real estate agencies sent a​ regular newsletter to​ all the​ homeowners in​ a​ particular zip code so that when the​ homeowner is​ ready to​ sell, the​ agency's name and​ capabilities will already be known to​ the​ homeowner .​
Other agencies send post cards to​ all the​ homes in​ a​ six block radius of​ any listing they get .​
Be creative and​ vigilant .​
You can get good ideas from watching what the​ competition is​ doing.
Inborn sales ability: if​ you are an​ old hand at​ selling large ticket items such as​ cars or​ insurance you've got a​ leg-up in​ the​ real estate business .​
But even if​ you've never sold big items before, remember a​ sale is​ a​ sale is​ a​ sale .​
If you can sell thimbles, you can sell houses.
Life as​ a​ real estate agent can often be a​ roller-coaster ride .​
Many factors influence the​ success or​ failure or​ real estate agents: interest rates, season, taxes .​
Housing fluctuates in​ tandem with the​ economic climate of​ the​ nation but no matter what is​ happening nationally, there is​ always a​ market, people are always buying homes.
Real estates agents need to​ have a​ sure hand and​ a​ stout heart, but can be highly successful with perseverance, knowledge and​ concern for​ their clients.
Resources
Industry Associations:
National Association of​ Realtors, 430 N Michigan Ave., Chicago, IL 60611 (312) 329-8200
National Association of​ Real Estate License Law Officials, P.O .​
Box 129, Centerville, UT 84014 (801) 531-8202
National Association of​ REal Estate Brokers, 1101 14th St.,NW, Suite 900, Washington, DC 20005 (202) 289-6655
Publications:
Real Estate Today, 430 N Michigan Ave.,Chicago, IL 60611 (302) 329-8200
Real Estate Business, Commercial Investment Real Estate Council, 430 N Michigan, Suite 500, Chicago, IL 60611 (800) 621-7035
For additional information helpful in​ setting up your new business, information about licenses, permits, the​ legal structure of​ your business, taxes, insurance and​ much more refer to​ the​ Business Start-Up Fact Finder Manual




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