Being successful in a real estate career isn't "rocket science," but it isn't "as easy as falling off a log" either. Entering the business with realistic expectations and a plan for overcoming obstacles will help to avoid becoming a statistic.
Average Income of a Real Estate Agent
According to the Department of Labor, the median real estate agent's income in 2004 was $35,670 (median means half above and half below). That's gross income, out of which all their business expenses had to be paid. The bottom 10% had a gross median income of only $17,600. Even if you're with a broker that provides an office, phone, business cards and some prospect leads, you'll still have expenses for your car, personal marketing, client gifts/entertainment and more.
The Competition is Fierce with More Agents Than Ever
With over 1.18 million members of the National Association of Realtors®, and record numbers entering the field each year, it's imperative that new agents understand their market and the competition. Know your abilities, both business-wise and financially. Learn everything you can about your market and where buyers and sellers come from. Then plan your marketing to capture them at the best value.
Are Your Expectations Realistic?
Something we've heard many times is "I'm good with people and I've got a huge number of friends and family. They'll give me enough business to carry me through my first year or so." That's not the way it goes. First, they have over estimated the number of actual transactions all those friends do in real estate. Only a small fraction will buy or sell property in any given year. Also, they don't owe you the business, and you may find that they don't remember you when the time comes.
Be Finacially Prepared for Lean Years in Your New BusinessNot entering the business with adequate financial resources is a common reason for failure. It's not just having enough cash on hand to make it to the first commission. It's also making a plan and a budget that is realistic in estimating expenses, allows for the unforeseen and hopefully includes a budget for marketing. Don't rely only on your broker for prospects and business. Make a marketing plan and develop a budget to fund that plan through the first year. Debt may be a viable vehicle for a good plan.
Avoid Real Estate Agent Burn-outOne reason given by agents who've left the business is that they just burned out. It's usually in relation to working with Buyers, and driving many miles showing hundreds of homes without a deal. The temptation for a new agent is to take any prospect that comes along, hoping for a deal at the end. You can avoid this ticket to Burn-out City by qualifying your customers as to their motivation and buying schedule. Develop a list of tactful questions that help you to do this.