What It Is Like to be A Real Estate Agent
To the general public, the profession of a real estate agent looks glamorous and exciting. The idea of driving around and looking at beautiful homes with excited buyers looks rewarding and fun. It is rewarding and fun, however there is a lot of time and hard work that has to happen behind the scenes to finalize any real estate transaction. Popular reality television shows only give the general public a glance into the glamorous side of the business — showing million dollar homes to wealthy clients — while leaving out all the hard work that has to happen behind the scenes to successfully close a real estate transaction.
The real estate business is fairly easy to get into. Compared to opening other types of businesses, buying an existing business or national franchise, real estate is quite inexpensive to get started in and the income that can be realized is great. Arizona requires a state-issued license to legally do business as a real estate agent. Ninety hours of classes are required by an accredited real estate school or university in addition to passing three tests, a school test as well as state and federal tests. Upon passing all the tests, and fulfilling a few more minor requirements, you can begin your career in real estate — for less than $2,000. The licensing requirements do not teach the fundamentals of being successful in the business so it is important to affiliate with a brokerage that provides support, great education and training. All agents must hang their license with a designated broker who is responsible for their agents’ actions.
Many different personality types are successful in real estate, however most successful real estate agents are outgoing and self starters with a drive to focus on setting and achieving their goals. The best agents are education-based and have the skills to coordinate the many activities necessary to successfully and smoothly help their clients buy and sell properties. The most important activity a real estate agent must do is to prospect for clients. There are two types of clients, buyers and sellers. Buyers are looking to purchase a property and sellers have a property to sell or “list.”
Most new agents find working with buyers to be more comfortable. This involves finding someone looking to purchase a home and asking consultative questions to learn what they are looking for and then going to work to help them achieve their goals. It is important to have a great team of professionals to help you help your client, starting with a great lender who will qualify the buyer for a loan. Once you have a price range they qualify for and feel comfortable with, you can begin looking for properties that fit their needs. Being a great listener is a great asset. Being knowledgeable about neighborhoods, schools, builders, and the market in general are all important in helping buyers. Once a home is found that is right for the buyers, the next step is to write an offer on the home. It is important to review comparable sales in the neighborhood to make sure the buyer is not overpaying or not offering enough to secure the home. The offer should be prepared to make it look like your buyer is the best buyer for the property. This is especially important in today’s market where there are bidding wars on the best properties. A poorly written contract, an offer missing paperwork, and any offer not representing your buyer in the best possible way can cost them the home they desire. Once an offer is accepted, the agent goes to work on the inspections necessary, getting all of the loan documents together, negotiating repairs, coordinating title work, appraisals and everything necessary to get the home sold (“closed”) successfully.
Listing a home is another important activity of a real estate agent. Listing is offering a property for sale for the owner. This involves positioning the property on the market so that it sells in the least amount of time for the most amount of money. The agent must study the recent sales to set a price that will attract attention and get the buyers excited enough to look at the house and make an offer. Along with pricing the home properly, the agent must make sure that the property shows in the best possible way and that it is easy for buyers to get into to see the home. Once the price is determined and the home is in great showing condition, the agent will begin to market the home. Today, that is mostly through the MLS (Multiple Listing Service) and various real estate-related web-sites. Listing properties offers an agent the ability to gain buyers and sellers through the marketing of their listings. A properly priced and positioned listing will stand out and sell. Listings are the best way to become successful in real estate. It takes less time to manage many listings than it does to work with many buyers. Having a sign in front of a property and listings posted on the internet attracts more clients to the agent as prospects. Just like with buyers, once an offer has been negotiated and accepted by a seller, the agent goes to work coordinating all of the activities necessary to close the deal.
Most real estate agents work on straight commission. They do all of the work up front with no pay until the transaction is successfully closed. The listing agent charges the seller a commission that is a percentage of the sales price and shares this commission with a buyer’s agent that brings a buyer to the listed property. When working with an agent to purchase a home, it is important to work exclusively with one agent. Many buyers do not realize how much time and money is spent up front by the agent in the effort to find the buyer the home. Working with multiple agents at the same time actually duplicates efforts and does not help you in your home search.
The part of the business that the public sees is the exciting part of the business. Buying and selling a home can be a very stressful and emotional experience! The agents need to be the calm in the storm and work very hard behind the scenes keeping deals from falling apart and keeping emotions from entering the transaction. A great agent will have the ability to manage many activities and personalities necessary to complete a transaction. Real estate is a relationship business. Buyers and sellers want to know you care about them. If you do a good job, they will refer their friends and families to you and use you for all of their future real estate transactions. Referral business is a big part of becoming successful in the business.
Most real estate agents are self-employed. This involves financial obligations including marketing, advertising, continuing education, office supplies, professional fees, auto, gas, and health insurance. Real estate agents are responsible for paying their own income taxes and planning/funding their own retirement savings.
There are many rewards to becoming a real estate agent. It is a great feeling to find a family the perfect home or handing the keys to a first time homebuyer. It is easy to get into the business and there are many successful real estate agents in the business that can serve as mentors to help avoid the pitfalls and keep you on track to a successful, fulfilling and lucrative career.