Category Archives: Real Estate

5 Reasons To Get Into Commercial Real Estate

Have you chosen real estate as a career and now you are confused whether you want to choose commercial real estate or residential real estate? There are pros and cons to working with both types of properties, but you have to choose the career that leads you towards success the best. Although it is easier to break into residential real estate, if you want to make more money during your lifetime, you need to choose commercial real estate.

Commercial real estate brings you the big deals because you are dealing with corporations instead of someone who wants to rent, sell, or buy a single house. Although you need to work harder in commercial real estate, hard work is necessary to be successful in every job, so why not get paid fairly for your hard work? Today we would like to tell you about the top 5 reasons why you should go commercial instead of residential real estate.

1. More Commission

If you are dealing in commercial real estate, you will definitely make more money because the percentage of commission is more significant as compared to residential deals. The properties are more expensive as compared to a residential building, and the clients are willing to pay more because they need the property for putting their business on the ground. A commercial deal may take 9 to 10 months to be closed and fully funded, but it would definitely pay off commensurate with your hard work.

According to the National Association of Realtors, a commercial real estate agent makes $85,000 per year on average and a residential real estate agent makes $35,000 per year on average. You can see such a massive gap between the earnings and decide which one would suit you the most. If you can become a commercial realtor, you may even receive up to 100% of your commission.

2. Career Growth

A commercial real estate agent needs to have a proper degree to work in the market, which helps him or her to make full use of their knowledge in the field. On the other hand, residential real estate agents don’t need a degree. Regardless of college education, both types of agents are required by law to have a real estate license.

If you are working in the commercial market, you’ve got better chances to grow because you are in contact with different businesses outside of the market. The connections you make in the business community can lead you towards getting even bigger clients shortly.

A residential real estate agent is only in contact with small families most of the time, which cannot help them to take their career to the next level. Even if a small business needs to find a property, it would have to contact a commercial real estate agent, so you would be in contact with almost all the companies in your area looking for property to expand their operations.

3. Work with Large Companies

The environment of commercial real estate is really different from the residential market. You get to talk to the big fishes in the industry. This is not a side hustle. The commercial side introduces you to the real corporate sector, and you get to see more serious buyers and sellers. It is more about making the business happen and allows you to earn tens of thousands of dollars with just one deal.

Residential real estate gives you the chance to make great relationships with various families, and get more time for yourself. A commercial real estate agent is always on the move and trying to earn more instead of finding time to relax. Working in the commercial area is a full-time job, and you definitely get paid for the months of hard work you put in to close a deal. If you are looking to make a name for yourself in the market and work with big corporations in your area, you need to choose the commercial side.

4. Exclusive Clientele

As a commercial sales agent, you do not have to deal with a variety of clients because not everybody can buy a retail center worth $3 million. You will get to see more people from the corporate sector dealing with buying and selling in the commercial sector. This is where you can build a vast network with the people in high places in your area.

You will get invited to parties where you will meet people who are ready to invest in millions. You don’t have to bargain for a few thousand dollars because these people know how business is done. You can get straight to the point and close a deal if you give these clients a real proposition which suits them as they have a lot of money at their disposal.

5. Fewer Competitors

A bigger chunk of real estate agents chooses residential real estate because it is easier to get into and you can even do it as a side hustle. You can see evidence of this whenever you attend a networking event for real estate agents, or when you see signs of homes or apartments available for sale or rent.

On the other hand, there are only going to be a handful of commercial real estate agents that you’ll see attending networking events. So there is a lot of competition in the residential market, and if you can market yourself in a better way, you may find it easier to get the top spot in the commercial real estate market in a few years.

There are not many agents contacting commercial property owners with property worth millions of dollars so you can get a great deal done in a few meetings. All you need is someone who needs a commercial property and someone who needs it right away. Several commercial properties worth less than $4 million would be a long shot for a residential investor, but it is not a significant investment for a commercial investor. So you can easily hit the jackpot if you are persistent and willing to work hard in the commercial sector.

What You Need To Know Before Working In Real Estate

Millions of individuals envy the lifestyle of successful real estate agents and their astounding income levels. It is no wonder that a large number of men and women switch careers and leave their jobs every year to become real estate agents.  

Yes, anyone who is hardworking and can deal with other people can hope to do well as a real estate agent. However, there are many things about the profession of a real estate agent that most people are not aware of.

It is a good idea to have complete knowledge about the career as a realtor before jumping on to the bandwagon. This will help you in making an informed decision about a career as a real estate agent and what you can expect from it.

1. You need to go to school to get a license.

It is true that anyone can hope to become a real estate agent irrespective of his educational qualification. But you still need to enroll in a training course and then appear in an exam to obtain the necessary license to become eligible to work as a real estate agent. You can do the course in a classroom setting or complete it as an online course.

Every state has a specific requirement in terms of hours of course. After passing the course, you need to pass state and national board exam to become a qualified real estate agent.

2. You will have to find and work for a broker

After passing your state and national board exam, you are given a period within which you have to become associated with a brokerage.

As a newbie realtor, you need the help and support of a brokerage to give direction to your career as a real estate agent. You have to do your research to find a reputed brokerage to get the kind of experience you need to develop your career. Find out what the brokerage is offering in terms of training, tools, and help in a real estate transaction.

These aspects prove crucial during your learning curve and help you in starting as an independent realtor later. The brokerage charges a fee to allow you to work as an associated agent and you can expect to pay nearly $10000 a year in the form of a technology fee, desk fee, and other expenses. You can manage the cost of the brokerage with the split in a commission that you earn through your real estate transactions.

3. You have to learn to market yourself.

Once you start your business as a realtor, you are just like a doctor or a lawyer providing his services to clients. You will face fierce competition from already existing agents, and your task will be to set a unique identity for yourself in your area of operation.

It is your marketing efforts that will make sure that people in your area come to know about your knowledge and skills. You will need a good quality website where you can give information about your services and expertise. You will need a significant online presence including accounts on various social media networks to interact with your friends and followers. It will be your job to establish yourself as an authority in your chosen real estate niche.

4. Real Estate is not a 9 to 5 office job.

If you think that you will get to enjoy the comforts of an office where you can work from 9 in the morning till 5 in the evening, you are wrong. You will be your own boss with a flexible schedule to work at your own pace and liking.

You can decide your hours of work, but you will have to keep in mind the convenience of your clients to suit their schedules. You can find yourself working at odd hours of the day and during weekends. You will find that you are meeting clients and showing them properties in evenings and on holidays more than in mornings and weekdays.

However, you can take a break from work whenever you desire and enjoy a movie or a vacation on the beach with your family and friends. In a nutshell, there are no set hours of work when you take up a career as a real estate agent.

5. The first year is the most important

The first year as an independent real estate agent will be the hardest, but most important phase of your career. You are on your own, and you must work hard to secure leads and clients. This is the hardest phase of your job as it could take many months to earn your first commission after successfully closing the deal for a client.

You may be required to utilize funds from your savings account to manage your household during this phase. Once you pass this critical phase, your career as a real estate agent takes off, and you can expect decent income through commission. On average, agents from both sides get around 2.5-3% of the total value of the transaction as their commission. Even if you sell one property worth $250,000 a month, you can expect an income of around $75,000 in a year.

6. It will be important to build long-term relationships

Your success in your chosen career as a real estate agent will hugely depend upon your ability to develop strong relationships with your leads, clients, vendors, contractors, investors, and lenders. You can easily iron out wrinkles from a real estate transaction through your expertise as well as your network in the real estate industry.

In fact, highly successful realtors get most of their business through referrals from their previous clients. You can hope to get high volume of business without making hard efforts if you have great communication skills and seen as a reliable and honest real estate agent. For this to happen, you will have to learn to manage your relationships with your clients and other realtors so that they remember you whenever they need your services.

Sales Agent License vs. Broker License

In an age of specialization when good paying jobs are few and far in between, a large number of men and women become attracted to the profession of a realtor. With very low barriers to entry and substantial earning potential, the career as a broker in real estate has become extremely popular these days. 

Even though tens of thousands of individuals join the profession of real estate with high hopes, nearly 90% of them fail miserably and quit within the first year. The success rate of newbie brokers may be minimal, but thousands continue to jump on to the bandwagon every year. In such a scenario, it is worthwhile to ask yourself whether you should get a broker’s license or stick with a sales agent license.

Difference between a sales agent and broker

There is a fundamental difference between the job as a sales agent and a broker in real estate. Brokers can work independently while a real estate agent must work under a brokerage with the necessary license. You can become a real estate agent by doing a course and then passing the state and national board exam, but you need to obtain an additional license to work as a broker. A broker is a professional who has also obtained the other license and experience required to function both as a sales agent and a broker. All brokers are real estate agents whereas all agents are not brokers.

Understanding the responsibilities

It is not just the function of a broker that is different from that of an agent. Both have differences in their responsibilities also.

Agents are salespersons in the sense that they represent buyers and seller. They do prospect for buyer and seller leads. They are required to market the properties and find buyers for owners. They show different properties to buyers. A significant function of a real estate agent is negotiating on behalf of their client. They help in drafting the contracts, sales agreements and help their clients during the closing of a deal.

The main job of brokers is to train and manage agents. They recruit new agents and resolve conflicts in their real estate transactions. They review contracts drawn by agents and make sure that they comply with the rules and regulations put in place by the state governments. They must market their brokerage and market the leads they get to their agents.

Once you know the functions and responsibilities of both agents as well as brokers, it becomes easy for you to decide on what you want to grow in the future. If you have an outgoing personality and you believe you can convince others in buying and selling properties, becoming a real estate agent is a good career option for you. On the other hand, if you are better at managing your office and staff, it is a better idea to become a broker.

Benefits of having a broker's license

You can work as a real estate agent without obtaining the broker’s license. However, you must pay the fee of the brokerage that is licensed to conduct real estate sales. It is not just the savings on your commission but also the control you get with a broker’s license that is important while working as a realtor. You also get the freedom to hire other real estate agents to work for your brokerage. This means you can increase your earning potential by having a team of agents working under your brokerage. With a broker’s license under your belt, you can enjoy many more real estate investing avenues that aren’t possible with a simple real estate agent’s license.

Brokers can earn more by recruiting agents under them

Of course, you need a bit more training and education to be eligible to work as a broker. You are one step above an agent who must work for you whereas you can run your independent business. The exam to become a broker is lengthy and requires in-depth knowledge about real estate. It is undoubtedly more difficult than the exam needed to become a real estate agent. Once you get the broker’s license in your state, you can set up your own real estate firm and hire agents to work for you.

How do you become a broker?

Different states have different criteria for obtaining the license of a real estate broker. You need to find out the educational and licensing requirements in your state before you take a step in this direction.

You must be over the age of 18, completed the required broker pre-license courses for your state, and passed the broker state exam. You must have experience as a real estate agent for a specific time depending upon the state in which you are living.

You also need to have accumulated a certain number of points based upon real estate transactions done as a real estate agent. Broker licensing courses are generally on the same subjects as a sales agent’s license.

The bottom line

At the end of the day, it is entirely your personal choice whether you want to work as a real estate agent or a real estate broker. Both professions are in high demand, and both earn attractive income yearly. You can choose to continue as an agent. But if you want to take a different path in your career, you always have the option of becoming a real estate broker.

7 Tips To Nail Your Interview

The legal structure in real estate undergoes various changes regularly, so it is crucial to know what you need to ask a broker before starting to work under his or her supervision. There are many financial factors involved that can impact your career, so it is in your best interest to get the clarity of the situation as early as possible.

You can structure your career in a better way if you get the right experience working at a reputable brokerage. You have to undergo an interview with the broker before you can start working in a firm, and we would like to give you 7 tips to follow while interviewing at a real estate broker to kick start a great career.

1. Ask about their Training Programs

First of all, you need to receive a clear vision of the type of training you will receive in the brokerage. Various mentorship programs are going on at different brokerage firms, and you need to ask whether you will be provided with one or not.

You also need to know about the mentor you will be assigned, and whether he or she has the credentials and the experience to give you the training which will be helpful for you in the real estate market. With the best available training in the market, a real estate agent can enhance his or her potential to perform better in the market.

2. Understand the Structure of the Company

Try to ask about the business entity formation you would have with the brokerage firm. Most of the real estate brokers offer you a sole proprietary contract, which won’t be in your best interest if you don’t have savings because it does not provide litigation protection as well as a tax reduction.

You should find a real estate broker that can provide you with an LLC contract because not only you will get protection from any potential lawsuits, but you will also be able to save a lot of money through tax deductions.

3. Find Out the Costs Involved

Ask your broker about the costs involved in working with the brokerage firm. It will be essential to buy error and omission (E&O) insurance because if you can buy the right coverage, you can definitely save a significant amount of money, and instead, put that capital to work in other parts of the business.  It is necessary to understand the coverage you will be provided by the brokerage and how you can maximize it to help you in sustaining your business in the real estate market.

It is pretty tricky in the beginning to run a business solely on your own savings, so you need support from the brokerage firm. Make sure that the broker you are talking to is not greedy, and is trying to take every penny you earn without even giving you value in other ways, such as services or training. It is essential to look out for yourself because nobody else is going to do it for you in this field.

4. Will They Provide You with Marketing Support?

One of the most important tips regarding when you interview with a real estate broker is to ask him about the marketing material his or her firm will provide for you. Marketing is one of the most critical factors of success for a real estate agent.

There are different kinds of marketing material provided by various brokerage firms, and every one of them will give you a different angle. You need to know that the firm you are going to work for is committed to going to provide you with the best kind of marketing material, both in word and graphics form.

5. Request a Copy of their Policy Manual

Before starting to work for a brokerage, it is essential to read their policy manual, so you are aware of all the guidelines and policies. This way, you will not risk making a mistake after you get hired.  Often times, real estate agents forget to ask for a policy manual, and they later realize its importance once they get into a situation where they break one or two policy guidelines. Then, its damage control, and they have to pay for it.

If your real estate broker is not comfortable in sharing the policy manual with you, it is definitely a sign that there is something fishy going on in the organization, and you should leave immediately.

6. Inquire about the Percentage Commission Split

Starting from the very first meeting with the real estate broker, you need to know the percentage split of the commission to save yourself from any issues in the future. Finances are the backbone of any kind of business, and you will earn most of your money in real estate with the help of a good commission structure.

Get to know the industry standards of the commission split, and then bargain with your broker. Make sure the commission split being offered is reasonable and acceptable to you because it will affect your future goals.

7. Request an Independent Contractor Agreement

It is vital that the brokerage you are going for provides an independent contractor agreement. Get it done before starting your career because you have to ensure you’ve got the bargaining power in your hands.

Legal help could also enhance your chances of getting an independent contractor agreement, and you should pursue it legally if necessary. If you are in an interview with an experienced real estate broker, he or she will agree to provide you with such a contract if you can impress them as a promising real estate agent.

Such a contract builds a trustworthy relationship between both parties, and you won’t have to worry about your rights being violated at your time with the brokerage firm. On the contrary, if you are working without a contract, even if your rights are being violated, it won’t be possible for you to legally fight the brokerage. It is this kind of an agreement that leads you towards having a more honest relationship with the broker. You can start working without being worried about facing issues in the future which could negatively affect your career as you will have a legal foundation to stand on.

10 Tips To Pass The State Exam

You can’t wait to become a real estate agent!

What is standing between you and this dream is the real estate exam. It is an essential step if you are to get the license and become a full-fledged realtor.

Here we will explore a few tips that can help you prepare for the estate exam and increase your chances of getting a real estate license. While at it, just know that these are tips, they are not guarantees for success. However, if you take them into serious consideration, they can help you in maximizing your chances of passing the test, at least the first time you take it.

1. Focus on the Exam Materials

You will find that the amount of materials that are supposed to be covered for this exam is overwhelming. However, there are several study packs that you can rely on. Focus on these materials and gauge yourself, you will be able to know your strengths and weaknesses. Aim at improving on areas where you feel inadequate. Familiarize yourself with mathematical formulas that need to be known when sitting for this exam, practice working on them, so that during the exam you will not experience difficulties.

2. Get a Study Buddy

They say two heads are better than one. Nowhere else can this apply than in preparation for an exam. You can find a real estate friend who is also preparing for the exam. You can study together and help each other out. This not only an effective way to study, but it also makes it less dull.

3. Seek Advice

If you want to learn the experience of something, talk to those who have been there and done it. Talk to real estate agents who have successfully sat for the exam, ask them what is required to pass. These guys will give you tips that have worked, they will also tell you precisely what is needed on the actual day of the test, and how you should present yourself.

4. Relax

People tend to be tense when they are preparing for an exam. They become anxious. You need to control yourself, prepare yourself with ease, and relax your mind and body as anxiety can be a source of stress, something that can affect your success in this.

5. Understand the Scope of the Exam

This should have been the first tip owing to its importance and the effect it can have on preparation. With that note, I will cover it extensively. When we talk about scope, we refer to what is included and by extension, it also refers to what is not included if you look at it from a different perspective. Knowing the scope of the exam will help you concentrate on what is covered and essential.

Given that you have limited time to prepare yourself, you will not waste time on content that will not be examined. If you feel that any area which is not part of the exam is essential, you can also go back to it later when you are done with the exam.

6. Get a Good Night's Sleep

The test day is tomorrow, and now you feel that you are well prepared. Even with thorough preparation, lack of enough rest or sleep can interfere with normal functioning during exams. You need to ensure that you have had enough rest and sleep days before the exam.

If you do this, you will be relaxed on the very day of the test and will be in a position to concentrate. Lack of sleep can make you sick, and you do not want to have such kind of an experience when you are sitting for such an important event.

7. Wake Up Early

Here comes the exam day, make sure you wake up early, and in a relaxed manner, scan through your materials. You are just doing this to remind yourself. If you find that there are some areas that you may not have grasped, you can either decide to read through it, but if you feel that it is too much for you, just leave it. It may be difficult sinking in something new at this time. All of this should be done quickly. Do not strain at all.

8. Be Thorough

Prometric Test Center

During the exam, make sure you read each question carefully. They give you plenty of time to take the test, so go slow and answer them correctly the first time.

It will take more time if you try to speed through it and have to go back through the questions. Take the time, if you need it, to re-read the question until you are completely clear about what it is asking you. 

9. Attack the Easy Questions First

Although questions are numbered, you do not have to start with the first one. You need to start with the questions which you feel are easy and can finish quickly, this will save you time and also increases the chance of completing the test. This will also make you less anxious because you will have more time to spend on the difficult ones.

10. Double-Check Your Work

Once you have answered all the questions, go through them all to check whether you may have missed any or change an answer. This will ensure that you don’t lose points for making any silly mistakes.

With these tips, you are ready to go, wish you all the best with your real estate exam!

Top 5 Reasons Why People Work in Real Estate

Working as a real estate agent has always been a very popular career choice. More and more individuals are joining the real estate industry and getting licensed. In many housing markets, there are more realtors than the number of real estate transactions taking place in a year.

Also, the profession that was once dominated by men is now spearheaded by women. It is seen as a lucrative career where anyone can join without any educational qualifications and hope to earn a decent income. Here are the top 5 reasons why people work in real estate.

Freedom from the boring 9 to 5 office job

This is a big attraction for those who hate going to a physical office every day and spending many hours sitting behind a desk. Thousands of men and women doing clerical jobs feel they are wasting their life, sitting in offices as they only get a nominal income that is insufficient to live a lifestyle they dream about.

A career in real estate allows them to realize their dreams without asking them to be confined to a physical office daily. They love the flexible schedule that they can enjoy after becoming a realtor. They know that without the restriction of an office, they spend more of their time with family and friends. They can work whenever they want rather than being in an office all day long.

In an office job, the employee has no choice but to come to the office every day, five days a week. You must spend time every morning to get ready and commute to the same workplace day after day… after day. This isn’t the case when you’re a real estate agent. Every day is an adventure. Every day will be different.

You are the boss

A vast majority of those who decide to switch careers to become a realtor are those who are fed up with being monitored continuously and reprimanded by their superiors. If you are doing an office job, you will have someone who works as your boss. Most people remain frustrated with not just the rules and regulations imposed upon them in the office but also with the attitude of their bosses. But they have no option as they must earn a livelihood. As the saying goes, “people don’t quit the company; they leave the manager.”

The profession of a realtor gives them the option to break free from the chains of their office and their bosses. They can hope to become their own bosses by working as a realtor. Many people begin as a hobby realtor and later give up their office jobs when they are reasonably sure of earning a decent income from this profession. Of course, there is a learning curve involved with this profession, but the good thing about being a realtor is that one can continue with his job during this phase.

For those who hate to work under a boss, a career in real estate is like a dream. There is no one to find fault with your style of working or your decisions, and you are free to call the shots.

Low barriers to entry

One of the biggest attractions for people considering a career in real estate is its relatively low barrier to entry. You need not have a particular degree to become a realtor. Even someone who is not a graduate can hope to become a realtor after obtaining the necessary license from his state authorities. It doesn’t matter whether if you have a degree in liberal arts or have a science background as the profession of a realtor does not demand knowledge in any subject.

Anyone irrespective of his age and gender can do a course required by his state government and then pass a state and national board exam to obtain the necessary license to work as a realtor. Of course, you need to work under a brokerage to get some experience, but there aren’t many other professions that give you the most bang for your buck in terms of qualifications. It is no wonder then to see large numbers of middle-aged adults, including housewives, choosing real estate as a career option for themselves.

Opportunity to earn an attractive income

Salary from an average office job is not enough to allow an individual to provide for a typical family. Realtors earn a fat commission on real estate transactions that is around 5-6% of the total value of the property being sold or purchased. Though this commission is equally divided among realtors of both parties, a realtor whether he is forming the side of the buyer or seller can hope to earn an attractive income from this career.

If you can conduct just one real estate transaction valued $250,000 in a month and assume a commission of 2.5% on every transaction, you can hope to earn nearly $75,000 per year. This is much higher than the income of any ordinary man or woman doing an office job. This is much less than the income levels of highly successful realtors who are earning annual incomes in 6 and even seven figures.

The sky is the limit as far as your income earning potential as a realtor is concerned. You can make as much as you want, provided you are willing to put in the hard work and effort that is required.

Meeting new people and challenges every day

Large numbers of men and women are attracted to the profession as a realtor because it gives them a chance to meet new people daily. This profession is very attractive for those who have an outgoing personality and those who love to meet and interact with other people. If you become bored and frustrated with seeing and interacting with the same set of people in your office daily, it is high time you switch careers and become a realtor.

This career also offers new challenges as every new real estate transaction has its own unique features and conditions. Many people who like to face new challenges at work place are attracted to real estate because of this aspect.

How Much Do Realtors Make?

A few weeks ago, while relaxing on a bench in a park, a group of young men and women were engaged in a heated debate on the career prospects of real estate. One of them said that real estate was lucrative and one can make money very quickly.

He continued, “You only need to make a few calls to prospective buyers. One in five calls that you make will definitely buy the property that you are selling. This is something I can do, and get rich all within a short time.”

This is not the first time I am hearing this. I have met so many people with a similar outlook. Some even go to the extent of saying that real estate and brokers get paid for absolutely doing nothing. They use other people’s wealth to make money.

I wish it were this easy. If I had more time, I would have talked some sense to this man, show him what effort real estate and brokers put into earning the commissions that they take home. However, I did not have time as I was heading for a meeting with a client in the next thirty minutes. I could not miss this meeting as we were about to close on a deal and the client was also to going to give me a check on the same day. 

This was my payday, how on earth could I miss it and listen to people who out of ignorance think that real estate agents earn money so quickly. I wish they knew what was involved: all the meetings that one has to attend, the haggling, research among other aspects in the process of selling.

One question that came out of that experience is: how much do realtors make to attract that kind of attention. Also, I was personally curious to find out what the public perceives realtors make.

In this article, I will attempt to answer these questions. I will do this with my own experience in mind. I would like the young man, who thought that we make easy money, to read my article, and get to understand what is truly involved in all this.

First, let’s be clear about what the agents earn. They are paid on commission. This is a percentage of the amount of the deal.

Normally, this commission is pegged at five to six percent of the sale price. The amount may look huge, especially when the property in question is pricey but when it is split between the agent and the broker, the amount goes down significantly.

For example, when selling a house worth $ 250,000, each takes home approximately $7,500. At times this amount is not just for one broker or agent, it may be shared among several of them. This means that the amount earned by prospective realtor reduces even more.

The amount earned by a given agent is the gross amount. It is subjected to several deductions. Taxes are also deducted from this amount among other levies. There are also expenses that a real estate agent incurred in the course of working on this deal. These expenses include professional fees, signs, advertising cost, rent, and other bills which are all needed to make this sales process successful.

So with these deductions, the amount that one takes home decreases. Another way of calculating the real estate earnings is when you take the whole amount and then get a figure for the entire year. This can be taken as the amount earned and then consider the deductions as regular expenses.

One problem with this method is that it may exaggerate the amount earned by the real estate agents, giving false hope to those who would like to join this career in the future.

Having said that, it is essential to know that amount earned by a given real estate agent will depend on several factors. The most obvious is the number of sales. The more sales one makes, the higher the earning.

Also, you have to consider the expenses that are incurred during the course of working on any given sale. The more costs you have, the lower your earnings.

 The number of agents involved in the sale of a property will also reduce the amount taken home. When the amount is to be split among parties, the take-home commission reduces significantly depending on the number of people involved.

The Bureau of Labor Statistics estimates that on average real estate agents take home approximately $45,990 per year, but they also agree that this amount can significantly vary given the factors mentioned above. Some statistics indicate that one-tenth of the agents took home an average of $ 23,000 while ten percent of these earned a figure of $ 110,000 and above.

When you look at these figures, there is a significant disparity between the low and high earning real estate agents. Also, given the amount of time that one puts into their profession and when you factor the amount earned per hour, it can be even lower. Some agents are known to put in more than sixty hours a week. Research has shown that there is a correlation between the number of hours put into your real estate career and the income earned.

To sum it up, it is relatively hard to put a figure on how much money a real estate agent earns. There are many factors at play, but at the end of the day, it is up to you. The harder you work, the more money you will make.

How To Choose The Right Broker To Work For

Anybody who has ventured into real estate business will tell you that finding the right broker to partner with is the most critical aspect of a fledgling career. It will also to a great extent determine whether you succeed or not. You are required to take this exercise seriously, take time to research, and meet with as many brokers as possible. If you have a strong beginning, courtesy of a supportive broker, you are assured of success in this business. So how do you find the right broker?

This should not be a difficult task. Here are some tips that can help with this.

Training

As somebody who is starting out in a new career, you need to learn the ropes. You require some skills that will help you navigate through it.

The right real estate broker will offer this, train you on how you are supposed to start out, and what is required to make it in this lucrative yet competitive business. The kind of training offered by the broker needs to be targeted in equipping you with the skills necessary to be an excellent real estate agent. You need training on how to come up with a list of prospective customers, how to approach them and convert them from leads to prospects and ultimately customers.

You need knowledge of how to handle meetings with clients. This can be one of the most challenging parts especially for those who are starting out. Nothing you have done before would have prepared for that, but the best thing about it is that this can be learned.

With training, you can avoid mistakes that a majority of people who are starting out make. You will definitely make mistakes, but they might not be grave as when you have not been trained.

Any broker who is not willing or has no time to orient you to this profession is a no-go zone. That is a harbinger of more things to come up in the future. You can avoid all this by selecting a broker, who is willing to take you through the starting out process.

You will not only equip yourself with the skills and knowledge that are required to make it in this business but will gain enough courage to overcome challenges that come your way.

Commission Split

As a real estate agent, you are most likely to be paid on commission. This means if you do not sell, there will be no income for you. What you make after completing a deal will be split between you and the broker.

You will learn that brokers have different commission structures. There are some who may opt to give you a salaried position. Various factors will play out when it comes to commissioning splits.  They include company resources, market share, reputation, and culture.

The trick here comes selecting a broker who will give you an amount that is enough to keep you going. A broker who is out to exploit you should be avoided from the word go. It may not be easier in knowing whether the broker will give you a good deal, but there are some indicators which can tell you the kind of person or company you are dealing with.

The bottom line is that the commission earned should be reasonable, commensurate with the efforts that you put in getting the business. A broker who pockets a large portion of the income while leaving you with an amount that cannot support you is a no-go zone.

You are in this business to earn a commission, and if a broker does not guarantee you that you will be compensated adequately for your effort, he or she may not be worth his or her name.

Company Culture

Before settling on a given broker, you need to ask yourself the type of real estate company that you want to work for.  You need to consider the amount of support you need from those you are working for and with.

A real estate brokerage is just like any other type of business. It will have its own working culture, you need to understand it and know whether you will fit in well. You do not want to get into a brokerage only to realize that your aspirations and interests are incompatible.

You would have wasted your precious time as well as a chance to grow as a real estate professional. Although there may be different ways through which you may use to find out about the company culture, talking with other agents, especially those who have worked or may have interacted with the firm, may shed some light towards this end.

Summary

The bottom line is that you should strive to know more about the brokerage that you intend to work for. While it may be difficult studying several firms, it is worth the time and effort. And to make it easier, narrow down a few on a shortlist that have the qualities that you are looking for. Those are the ones you should spend more time researching and ultimately, selecting from.  

Choose a broker wisely. Your choice will significantly determine how your real estate career turns out.

 

Should I Join The NAR To Become A Realtor?

It is a question that every real estate agent faces at some stage of the career that whether it is worth joining NAR and choosing realtor as a career or not. Maybe it sounds like a long shot for a real estate agent as you’ve just earned the real estate license so why would you need to become a realtor?

There are different pros and cons of becoming a realtor, and we would like to tell you all about them so that you’ve got an idea before making a career-changing decision.

What is a Realtor?

People often mix up the concept of a real estate agent and a realtor, thinking that both are the same. But if you are in the real estate industry, you would definitely know the difference. A real estate agent is a person who has a license to sell or buy real estate, and a realtor is a real estate agent who has joined the National Association of Realtors (NAR).

NAR was founded back in 1908, and since then, it has become one of the most significant trade associations in the United States of America, with more than 1 million members. NAR represents commercial and residential real estate agents, and you can join any chapter of the organization. You have to pay the association dues and fill out a form to become a member of this organization.

Pros

Networking

By becoming a realtor, you join an organization having more than 1 million members all across the country, so now you’ve got a networking connection in almost every part of the country. Building a strong relationship with the other real estate agents can help you create a successful career in a few years. You will be able to access the MLS listings that are only available to NAR members which will give you leverage over your competitors in the area. You can find out exclusive details which aren’t available online regarding a property with the help of NAR MLS listings.

Reputation

In real estate, your image is quite vital because most of the clients create a perception of an agent in the first meeting. When you introduce yourself as a realtor, you create a unique identity for yourself as you are part of one of the most prominent trade associations in America.

With this introduction, the clients become aware of the fact that you are different from the other real estate agents. You will have a higher standard of ethics because you need to adhere to the rules and regulations of NAR. With the NAR behind your back, you can create a better image for yourself in every meeting and gain the trust of the clients much easier as compared to a real estate agent.

Support

National Association of Realtors continuously works towards protecting the rights of the realtors, and you would get great support from the realtor community by spending a bit of money in the form of the association fee.

If you have an issue, you can quickly contact the representatives of NAR and get the legal experts on board along with hundreds of thousands of NAR members ready to help you in every way they can.

The support of the local and national chapters of NAR would mean a lot when you’ve got a tax issue.

Your business would also benefit from this network as even if you have to move from one state to the other, you will instantly get the support of the local chapter of the NAR to reestablish your business.

If you want to buy or sell a property in any other state, you can contact the NAR members in that particular area and close the deal much quickly as compared to other real estate agents.

Special Discounts

There are several other benefits involved with being a recognized realtor, which includes different kinds of discounts on various products like property and insurances. You will be able to reach out to the NAR credit union, which will help secure a loan for your business and car more easily. There is also a possibility to collect a special realtor credit card. Corporations like FedEx, etc. have special discounts going on for the NAR members all year long.

Cons

Education

One of the biggest cons of becoming a realtor is that you will have to take additional courses. You may have just finished the real estate pre-license course if you are a newbie, and now you will have to pay the NAR which could be an added pressure.

All realtors are required to complete at least 2.5 hours of ethics training every 2 years. The continuing education course must meet specific learning objectives and criteria approved by the NAR. 

In the end, you will be able to enjoy several benefits after you have joined the NAR, so you can take this pressure and convert it into something positive to kick-start a better career.

Cost

When you become a member of the National Association of Realtors, you need to spend some money as you have to pay association dues for the local and the international chapter. If you add up all the fees, you will have to spend hundreds of dollars in total. Not only do you have to pay for the initial registration fee, but you will have to keep paying on an annual basis to stay associated with the organization.

Bottom Line

Every real estate agent should strongly consider becoming a realtor. Although there is a substantial cost to join the NAR, you can think of it as an investment that you are making for getting connected to hundreds of thousands of realtors all across the country. You will have a reference in each part of the country, and you will have the support of an organization with more than 1 million members. You can quickly expand your business with such support, and you will have someone to trust if you have to face any kind of issue in the market or example tax issues. It is like having your own union in the market, and the only difference is that this union is much more powerful as compared to any other union. We think it is totally worth it to become a realtor.

5 Things To Consider Before Jumping Into A Real Estate Career

Many people in the world find that being a real estate agent is a rewarding career choice. You are in control of your own destiny and can make as much or as little as you want since you are typically paid on commission.

However, it’s not all roses and sunshine. The real estate industry can be cut-throat at times. As a new agent, you will have to get up to speed quickly because you will be going up against experienced ones that already have an established network of contacts.

So, if you are aspiring to start a new career in real estate, here are five things that you need to consider first.

What is Your Motivation?

You need to ask yourself this question. It is one of the most important things to think about since if you do not know what is driving you into this, you will have started it off on the wrong foot, and your chance of failure will be high.

If the drive is a lure for quick and easy money, stop! You are in the wrong place. A career in real estate will not be easy. It will take loads of hard work. The money will be there but only when you put some effort to get it. It is not a place where you will just sit there and wait for the check to come. This is a career where hard work determines what you take home.

If you are afraid of working hard, meeting different people and sometimes odd hours, this is not the career for you.

How Do You Feel About Change?

This is a career that is characterized by the high pace of change, and if you are not up to the game, you will just sink. It is a career that will require you to carry out an aggressive campaign, use modern tools to reach out to prospective customers and keep them engaged. If you cannot match up these demands, you will be in for a rude shock as others will be miles ahead of you.

Given that the competition is very stiff, I assure you that that’s the furthest you can ever go. Know what motivates you, be ready to embrace change, use modern technology, and you will be cut out for success.

Get a Glimpse of What Goes on in Real Estate First

If you want to do something or take a trip to a place for the first time, you need to gather some information. The same applies to a real estate career.

You may have heard stories about what has happened to some people in this career. Some of the information you may have heard may be true, and others may be false.

If you are getting into it, you do not have to wait for people to tell you. Research about it, get some factual information, collaborate it with credible experts. Have an idea on what to expect so that you can manage expectations.

Getting into this career without first understanding what is required of you, will lead to wrong choices. Some of which may cost you significantly.

You need to get a glimpse of what happens, the things that you will be required to do.

There should be very few surprises. In fact, you should have none if you are to make it. Talk to those who are already practicing, ask them what they do, how they started and what they have done to get there.

While doing this, make sure you talk to the right people. Some may withhold information in fear of competition. Others might mislead you so that you are not a threat to them, especially if you are targeting the same market or area.

With this information, you will be delving into this career knowing what to expect, this will help you moderate the expectation and increase your chances of success.

Get a List of Contacts

A career as a real estate agent will involve looking for customers, people who need selling or buying a property or those who require advice on real estate investment.

To start off, you will need a list of potential customers to contact and tell them what you do and how you can be of value to them. You need to build a list, start by people you know. These can be friends, people in the neighborhood. Get as many as possible, screen them and identify those who are likely to need your services.

At all times, keep on updating this list, adding more and also striking off those whom you think don’t fit your profile of customers.

Be Prepared for the Learning Curve

A real estate career does not promise a regular income. It depends on the deals that you make at a particular month. There will be times when there will be no income, especially when you are starting out. You need to have saved enough to take you through these months. Otherwise, you may experience some financial difficulties which may affect how you work.

Aspire to be the Best

In the course of your research, you may have found out that there are people who are successful in this business. Aspire to be like them. Learn from them. Follow their footsteps, and you will be successful too.

Learn these things before starting out, and you will be among the best real estate agents.

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