Homes for Sale - A Career in Real Estate
Selling the American Dream
It's what most American's dream of, and it's usually the largest purchase people ever make. And helping people to own their piece of the American dream (and helping them make their largest investments) is the job of Real Estate Agents.
A Brief Discussion on Commission
Like in every sales profession, the income of real estate agents varies greatly. And while the compensation plans may differ from agency to agency, the overwhelming majority of agents work entirely on commission.
That means that as a real estate agent, you only earn money after you make a sale.
For those who prefer the security of a weekly (or bi-weekly) salary, real estate may not be the best career choice. But for those who believe that they should be paid for their success and who enjoy the freedom of setting their hours and vacationing when they choose to, a career in real estate offers plenty of attractive benefits.
To help protect American home buyers, every state requires that those who sell real estate hold a license. There are two primary licenses that you will need to study for, attend a course and pass a test before receiving. One is for those interested in becoming a real estate broker and the other, and the focus of this article is for those who choose to be a real estate sales professional. The former license is what agents will need.
Testing and course requirements vary from state to state.
Visit your state's real estate licensing office or website to learn exactly what you will need to do to become a licensed agent.
Beneath it all is the Land
This is a famous quote that most every professional in real estate is familiar with. Real Estate agents are not only sales professionals that sell homes, but who also sell land.
In truth, while a house is what will draw potential buyers to your agency, it is the land, the laws, and rights that involve the land, that real estate agents must fully understand.
Without a deep understanding of whatever "land ownership" laws exist, an agent could be subject to liability after selling a home. For example, let's say that an agent sells a home that sits on a parcel of land that is part of a land claim dispute. The buyers are unaware of the land claim dispute and only later learn that they may be forced out of their home if the land claim is settled in a manner that is not favorable to them. If the agent had knowledge of the land claim but did not disclose the information, she, or her broker, would be held liable for any damages the homeowners suffered.
In the above example, ignorance is not an excuse for the agent and does not spare them from their liability. Understanding the laws of the land is an important part of the licensing process and a critical component of every agent's ongoing training.
They Can't Take Away Our Freedom!
Enough of the liability and responsibilities that agents must expect and accept. The two most attractive benefits of the real estate industry are income potential and freedom.
As discussed earlier, the income an agent earns is a direct result of how well they perform. The more houses they sell, the more commissions they earn. While the rate of commissions earned varies, a general estimate is around 5 to 7% of the selling price. Sell a house for $300,000, and the agent will earn around $15,000 to $21,000 in commission. Again, many factors are involved with determining the final commission figure, including brokerage fees (the amount an agent gives back to the broker with whom they work,) and MLS splits. MLS, or Multiple Listing Services, effectively allows a broker who lists a house but doesn't sell the house the ability to earn a percentage of the commission that the selling agent earns. This works both ways so don't think the MLS will only cost you money. You get to earn some of the MLS income when you list a property but don't sell it.
When it comes to flexibility and freedom, few sales careers can compete with the real estate career. While you may have to work hours that extend past 5 pm and that often reach into weekends, much of your time will be your to do what to do with. Most agents who work for brokers are independent agents who set their hours, work as often (or as little) as they want and can pick and choose what clients to work with and which properties to represent.
With that in mind, it is important to realize that a career in real estate is not for those who are not willing to put in the work required to build a successful "book" of business. Agents rely on networking, referrals and repeat customers to earn their living. If an agent is lazy, they will have a very difficult time with any of these three critical success factors. While they may enjoy the freedom that their career choice affords them, they probably will grow tired of having no income after a while.