I was talking to a friend of mine the other day and she told me that her son was taking classes to become a real estate agent. Knowing a little bit about the son, I was surprised that he was thinking about a career in real estate sales. Would I ever advise someone to get into real estate sales? I had a tough time with the answer. I would say it depends on the situation. Here are a few thoughts on whether or not real estate sales might or not be a good plan.
Years ago, I read a real estate book where the agent said to always tell people to say yes to getting into real estate sales. She reasoned that if you said no, the person would resent you. They would think that you are just trying to keep them out of the business and it would be better if you said yes and they failed on their own.
On the other hand, real estate sales in St. Louis are tough. Last time I checked, there was something like 8,000 agents. Competition is fierce, and a new agent definitely starts out at a disadvantage. After all, who wants to work with a brand new agent?
It usually boils down to the question of what the person wants to believe versus reality. People generally see the commission on a sale and think that they get that full amount. After tax, brokerage fees, and other expenses, that number isn’t so great.
Another thing I see a lot of times is that a person wants to buy a house and save money. This doesn’t make the most sense to me. Can you find deals on the MLS? It’s possible. But these future agents aren’t looking at those deals. They are of the belief that somehow every agent is selling a house for more than someone will buy it for, but with their astute negotiating skills, the seller will give them a bargain. This seems to leave out the fact that there is another agent representing the seller.
One of the ways they might save money is that they are paid a commission, effectively lowering the sale price of the home. That makes sense in some ways, but not in others. For example, if you only do one deal, you’ve spent more in time for license and board membership than you would ever gain on your purchase.
Then I hear things. One of the things I hear is that this new agent has a lot of friends, so they will use him or her on deals while the agent has a “real job” during the day. My experiences tell me it doesn’t exactly work that way. When people are looking to buy or sell a home, they are looking at making a very important decision with the aid of a professional, not some part timer.
I’m the owner of Deerwood Realty, an independent brokerage in South St. Louis. I’ve seen agents come and go. There were some who were really talented that just couldn’t catch a break, and there were others who were doing great but poor ethics caught up with them.
My advice to someone who is looking to become a real estate agent is simple. If you think it’s a good idea to become an agent, go ahead and give it a try. The worst thing to happen is that you go broke trying to make it. The best thing is that it works out. There are many risks, but it can also be a very rewarding career.