what are the downfalls of becoming a realestate agent?
February 52010
The two biggest concerns are whether you are adequately capitalized to start a business and whether you have the necessary discipline to save money when times are good so that you can stay in business when the real estate market slows down, as it inevitably will. Real estate is a very cyclical business.
When you are just starting out, you likely will have more expenses than income for the first 6-12 months. So, you need to be financially prepared to pay for advertisements, business cards, networking, driving around, etc. Even if you get a sale in the first few months, it takes 30-60 days to get your commission paid (at closing).
Right now, the housing market is in a down cycle. But if you have enough money to stick it out, and you’re genuinely interested in the work, you can turn these circumstances to your advantage. During a down market, the agents with staying power are the ones who benefit once the market makes a comeback.
Once that happens, it is very important that you stash some extra money away for the times when the market cycles down again.
Good luck!
February 5th, 2010 at 8:19 pm
The two biggest concerns are whether you are adequately capitalized to start a business and whether you have the necessary discipline to save money when times are good so that you can stay in business when the real estate market slows down, as it inevitably will. Real estate is a very cyclical business.
When you are just starting out, you likely will have more expenses than income for the first 6-12 months. So, you need to be financially prepared to pay for advertisements, business cards, networking, driving around, etc. Even if you get a sale in the first few months, it takes 30-60 days to get your commission paid (at closing).
Right now, the housing market is in a down cycle. But if you have enough money to stick it out, and you’re genuinely interested in the work, you can turn these circumstances to your advantage. During a down market, the agents with staying power are the ones who benefit once the market makes a comeback.
Once that happens, it is very important that you stash some extra money away for the times when the market cycles down again.
Good luck!
References :
former real estate agent
February 5th, 2010 at 8:32 pm
Doreen K’s answer was very good but the etc. includes many many expenses. You need a sizable nest egg to hold out until your business becomes profitable. Then be sure to save a lot and begin making quarterly income tax estimated payments or you may get into big trouble with the IRS.
References :
I have been a real estate agent for 4 years. It was tough getting started with only $20K in the bank and a pension to boot. I still haven’t caught up with paying taxes to Uncle Sam.
February 5th, 2010 at 8:48 pm
It is a commission only business, so you only get paid if you make sales.
No benefits, you pay for those out of your pocket too.
It is a job where you actually have to pay to do it. Business cards, MLS fes, advertising, signs, gas, letterhead, desk fees, E&O insurance, website fees, it can go on and on. You pay money out of your pocket to do this job.
You are also your own business, so if you are the type that would rather goof off than work because no one is watching, this probably isn’t the business for you.
References :
Oregon Realtor