Author Topic: Casual Realtors?  (Read 4306 times)

fidgiegirl

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Casual Realtors?
« on: June 05, 2014, 04:09:13 PM »
I am thinking about becoming a real estate agent, ok, not so much "thinking about it" as in the very first, baby stages of maybe starting to think about it.

What I am wondering is:  is it even worth doing if you're not going to do it full time?  I mean, is it even possible to get into it kind of casually, as a sideline?  Or is it worth it to do the classes to get the license in order to do it for your own properties or those of friends/family/acquaintances?

So, not entirely sure what I'm asking . . . but I guess if someone is or was at one time a less-than-full-time realtor (particularly if you also had a FT 9-5 gig), I'd like to hear from you.

Thanks mustachioed friends!

i_am_the_slime

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Re: Casual Realtors?
« Reply #1 on: June 05, 2014, 04:20:51 PM »
I have also thought about doing this.  I also was hoping to start part time to build at least a small "pipeline" of income before doing it full time.  Since housing deals take so long to close, if you did it part time for a year and got some experience and a few clients with houses for sale it would help make the transition - otherwise, it may take 3-6 months to get a solid income stream as a realtor.

In my experience when I was buying a house my realtors showed me houses after 5 pm and on the weekend so it seems possible but you probably won't be able to take on many clients.

arebelspy

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Re: Casual Realtors?
« Reply #2 on: June 05, 2014, 04:30:05 PM »
To be blunt: why would you want to pay annual fees and take ongoing education classes for something that doesn't make you money?

Being a Realtor is a sales job, and without a constant flow of leads from referrals or from advertising, it's hard to do casually, IMO.
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fidgiegirl

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Re: Casual Realtors?
« Reply #3 on: June 05, 2014, 05:00:44 PM »
I'm not quite sure where I said I didn't hope to/plan to make any money at it . . . sorry if that wasn't clear.  So perhaps the question is more is it possible to do so without it being a full-time gig?

Fishingmn

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Re: Casual Realtors?
« Reply #4 on: June 06, 2014, 06:29:52 AM »
I'm a Realtor.

According to the National Association of Realtors about 1/2 of licensed agents are not full-time so absolutely it's something that many people are doing.

The barrier to entry to become a license agent is pretty low. In Minnesota you pay around $1k for 90 hours of classroom training and taking the test. Classroom can be done days, nights or weekends.

You then find a broker to take your salesperson license so you can practice. As a part-time agent you'd probably want to find a broker that is friendly to new agents and has a commission model that takes less in fees in exchange for more of the cut out of every closed transaction.

The biggest thing to keep in mind is that you probably need to sell 2-3 deals a year just to break even. You have ongoing costs associated every year that include - MLS access, Realtor Association Dues, Errors & Omissions Insurance, Continuing Education. Figure $1-2k for all of those. Depending on the broker you choose you could have other costs as well - for example, I pay $400 a year to be a RE/MAX agent that goes to corporate.

Then you have your costs of doing business - marketing materials, car expenses, costs with actually listing a home (buying signs, sign installation, photography, staging, brochures), copying/printing (most brokers charge you for every page) and finally the cost of being an independent contractor like paying both sides of FICA.

During the mid-2000's there were 22,000 licensed agents in the Twin Cities as houses were flying off the market and it was easy pickings. By 2009 it was down to 15,000 agents as sales volume fell in the tank and all of those people who got into the market for the easy sales found out that the costs of maintaining their license just weren't worth it.

The other question you should ask is whether you have a circle of people that will use you and trust you enough to handle the largest financial transaction they have? There's also a risk that serving family and friends can cause issues if their transaction doesn't go smoothly. How will you feel when friends don't select you? How will you handle expectations of discounted services as a family member or friend?

Hope that helps

fidgiegirl

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Re: Casual Realtors?
« Reply #5 on: June 06, 2014, 08:11:43 AM »
Super helpful, thank you very much!

Annf

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Re: Casual Realtors?
« Reply #6 on: June 06, 2014, 09:44:06 AM »
I'm a Realtor as well.  When I started, I kept a prn (as needed) job in the hospital where I worked.  After about 3 months I realized that wasn't going to work because I wasn't able to field calls and I felt like I wasn't providing the best service to my clients.  It's not just about showing houses.  You have to help keep transactions together, so you are working with the lender, inspector, title company, contractors, and various other people so you can't expect to only work outside of your full-time job.  You have to be out networking to find good people to work with and that takes a ton of time.

Fishingmn talked about all of the fees.  Mine are a lot more than that in Wisconsin.  I used to live in Nebraska and they were similar to MN.  So be sure to get your numbers and figure out what the payout is and your splits, etc to see if it's worth it. 

In addition to the fees, you will want to study and/or take a lot of additional classes to the test courses and keep up on current material.  There is nothing worse than a part-timer out there "helping" people with a huge financial decision who hasn't taken the time to become an expert.   I do a few good part-timers, but most of them suck and the other Realtor ends up doing all of the work. 

dragoncar

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Re: Casual Realtors?
« Reply #7 on: June 06, 2014, 01:01:11 PM »
It it worth having the license without the broker's license?  CA will let me, as an attorney, have the license for like $100.  But the brokers license requires a couple years experience (somewhat recent rule change, used to be easier).  I like the idea of a part-time job that requires some professional certification (as noted in other threads, law tends not to lend itself to good part-time opportunities).  Thinking of Redfin as a broker.... anyways this is just idle thought at this point.

fidgiegirl

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Re: Casual Realtors?
« Reply #8 on: June 06, 2014, 05:06:36 PM »
Excellent food for thought.  This is why I am investigating . . . I also have a coffee date pending with a realtor friend of mine.  She'll tell it like it is, that's for sure!

GoCubsGo

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Re: Casual Realtors?
« Reply #9 on: June 12, 2014, 05:03:51 PM »
Definitely check with local broker offices to see whether they can or want to handle a part timer.  My office is a large producing office and they pretty much won't accept part-timers unless you can make a pretty compelling case (a couple agents in my office only do 1 or 2 a year but they are $1 million+ deals).  As a new agent you will need some hand holding/training and you want to make sure they have someone in place willing to help.  Many brokers in my area charge desk fees on top of the standard commission splits so make sure to ask as that can add up.

Market knowledge and negotiating experience go a long way to establishing and maintaining credibility so it can be tough to gain that only doing 1 or 2 deals a year. I'm able to show my clients homes before they hit the market through relationships made within my market (pocket listings, pre-listings, etc) and that's really important in a hot market.  I definitely wouldn't have those relationships if I weren't full time.  Not impossible, but probably not worth the time and effort involved in my opinion.

jmoney

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Re: Casual Realtors?
« Reply #10 on: June 15, 2014, 01:30:59 AM »
This really depends on a lot of things.

1) Which market are you in? Some areas casual realtors are frowned upon and brokers don't want them. In super hot markets like San Francisco I've heard brokerages usually only want full time agents. In slower markets like the midwest it seems like all the realtors I know are casual realtors.
2) Most important point. If you want to make the most money for your time I can almost guarantee you will make more money investing in real estate than selling real estate. Even wholesalers usually make more than realtors and you don't need a license for that. If you buy rentals you have a payday every month. Other than the title agent, the realtor is usually the least paid. The mortgage originator almost always makes more here in the midwest as well.
3) It makes sense to be a realtor if you want to buy super cheap houses and don't know anyone to give you the lockbox code. I buy cheap houses beat to heck for $2 k - 20 k which translates to a typical commission of $30 to $300 based on a 6% listing and 50% commission split between your broker. Even on an easy deal it requires at least 10 hours of time between showing, closing, paperwork, etc.  $3 to $30 per hour assuming I buy every house I look at which never happens. Lucrative eh? Reality is to look at 20 houses and buy one if lucky. No agent who wants to make money will show these junker homes reliably so you better be your own or pay them extra commission.
4) In most markets you need to do at least two deals a year just to pay all the fees. If you don't you're losing money.
5) Do you plan to invest in real estate? If so you need to disclose to everyone you're a realtor. Sometimes people get the heebbie geebies and you lose out on a deal. Most people don't care but sometimes people are reluctant if they are unrepresented.

Liz498

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Re: Casual Realtors?
« Reply #11 on: June 19, 2014, 09:17:06 AM »
I think that there's a difference between part-time and casually. Sure, why not do this part-time, investing pro-rata the same amount of energy that would into any career you want to succeed in. But if by casually you mean that you want to be able to pick it up and down at will or not be 100% committed then it's probably not going to work - even if you're just doing it part-time you'll still need to be available for calls and viewings and always be filling your sales pipeline.

Cpa Cat

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Re: Casual Realtors?
« Reply #12 on: June 19, 2014, 09:43:55 AM »
I'm not the industry, but I happen to associate with a socio-economic class and geographic/cultural region that produces a large number of bored housewives. Many of them toy with becoming hobby realtors. In fact, it's so common that we call them Lady Realtors.

The truth is, the only Lady Realtors who make it more than a year or two are the ones who dive into it and treat it like a real job. I don't think the realtor community in general is very accepting of people who aren't relying on it for an income. Which makes sense - this is a real job for some people, and no one's interested in having a Lady Realtor come along and poach a commission as part of their quest to relieve their boredom. And honestly, what realty firm wants to waste the time and effort in training/coaching someone like that?

Fishingmn

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Re: Casual Realtors?
« Reply #13 on: June 21, 2014, 05:30:22 AM »
The truth is, the only Lady Realtors who make it more than a year or two are the ones who dive into it and treat it like a real job. I don't think the realtor community in general is very accepting of people who aren't relying on it for an income. Which makes sense - this is a real job for some people, and no one's interested in having a Lady Realtor come along and poach a commission as part of their quest to relieve their boredom. And honestly, what realty firm wants to waste the time and effort in training/coaching someone like that?

Not quite right -

- No Realtor wants any other Realtor to poach a commission. Everyone is dependent on the next commission so no one likes to lose a deal no matter what the experience level of the other agent. What's more annoying though is finding a part-time Realtor who doesn't know what they are doing and having to help them do their job.

- Realty firms (brokerages) make their life blood off of having as many agents as possible. Most would welcome part-time agents with open arms.