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PAGE 10B PICKENS COUNTY PROGRESS THURSDAY. JULY 12. 2007
Local realtor shares, information
What they don’t teach in real estate school
By Ron Barnes
Associate Broker
Prudential Georgia Realty
There are a couple of similar
ities between being a real estate
agent and
being a brain
surgeon.
Both parties
have to
attend a spe
cial school.
Both have to
pass an exam
and acquire a
license to
practice,
which must be updated and
requires continuing education
after the license exam. Both can
be sued for malpractice.
However, while I have heard
people say, “I think I’ll try real
estate,” I doubt that anyone ever
said, “I think I’ll try brain sur
gery.” The biggest difference
between the two, besides the
obvious, is the level of commit
ment of the individual.
Let’s take a look at some sta
tistics that are hard to believe
but true. Over a period of 10
years, 1988-1998, observations
were made on the real estate
industry and the results were
staggering:
1. There is an average first
year failure rate of 86%.
2. Only 7% will renew their
license.
3. 76% of the industry is
earning less than $30,000 per
year.
So, it becomes pretty obvious
that what they teach you in real
estate school has nothing to do
with how to be successful in real
estate! They teach how not to
lose your license, how not to get
sued for malpractice and even
how to stay out of jail by not
engaging in such activities as
fraud.
New agents have another rea
son why their failure rate is so
high - they don’t go after busi-
If you are
thinking about
entering real
estate, give it
some serious
thought before
taking the
leap of faith
ness. They don’t have a business
plan and they don’t treat it like a
business. While agents do have
some degree of flexibility in
scheduling their activities, there
is nowhere close to the huge
amount of free time that many
people outside the field think
they have. You are an agent of
the broker, not an employee, and
as such you get no salary and
you have no schedule but your
own. However, if you don’t
work, it is definitely you that
pays the piper.
Here is a little truth and com
mon sense that prospective real
estate agents should consider:
1. Your friends and family
are not obligated to provide you
with a living. If you charge the
same commission, what makes
you think they want to trust their
most valuable asset to a new
agent? Also, the chance of them
needing to buy or sell a house in
a short time frame is slim. It is
true that networking is an
important part of the business,
but don’t take it personally if
your kid’s baseball coach or a
member of your church decides
to list his home with another
agent.
2. Your broker will probably
not provide you
with
many
boss you will have to leave early
to make a listing presentation
(which may help enable you to
quit working for him). Another
scenario might be telling a
prospective client that you can’t
make an appointment because
you’re still working a regular
job, just in case you fail at real
estate; that’s a real confidence
builder!
4. Many agents who fail
(roughly 30%) start out with too
little money. In addition to the
fees your broker charges each
month, which vary widely, you
will probably have to give up
part of your commission to the
broker. Those checks the agent
picks up at closing are not all his
or hers. It is common for new
agents to relinquish half of their
commission, while more experi
enced agents get to keep more.
Furthermore, like any other self
employed worker, you will have
to pay your own expenses,
which may include
advertising, member
ships, edu-
leads. Many bro
kers have a referral
or relocation depart
ment, but that frequently entails
charging agents as much as 35%
of the commission for the refer
ral. Furthermore, they will prob
ably give those leads to more
experienced agents who can
make the sale and further
enhance the broker’s profit line.
After all, the broker’s primary
function is to make a profit,
which may or may not include
helping new agents with train
ing and assistance. By taking
office duty, where you answer
the phones for the broker, you
may get lucky and secure a lead.
However, no one should count
on this as their main lead source
since over 80% of home buyers
actually start their search on the
internet. Don’t blame the broker
if you fail; it was probably not
them who decided you should
go into the real estate business.
3. Do not assume that you
will get lucky. Sure I believe in
luck! In real estate, the harder
you work the luckier you will
get. You can be in the right place
at the right time, but if you’re
not the right person for the job,
you will fail. While starting in
real estate, some people keep
their regular job until they get a
“lucky break.” I know of some
cases where that worked, but
more frequently the adage that
you can’t serve two bosses
applies. Imagine telling your
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may want to reconsider. There is
no accurate profile for a suc
cessful real estate agent. I once
heard a saying that goes some
thing like this: “It doesn’t matter
if you think you will succeed or
think you will fail, that is proba
bly what is going to happen.”
The statistics are gathered
from the National Association
of Realtors. Opinions expressed
are not made as a representative
of the Pickens County Board of
Realtors or Prudential Georgia
Realty. Ron Barnes can be
reached at 678-520-6648.
Prudential Georgia Realty is an
independently owned and oper
ated member of Prudential Real
Estate Affiliates, Inc., a
Prudential Financial company.
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cation,
phone, busi
ness cards,
printing, signs, lockboxes,
office equipment and supplies,
multiple listing fees, thousands
of gallons of increasingly
expensive gasoline and more,
depending on the broker pro
gram. Couple those with paying
family expenses and many
agents who fail simply run out
of money. Unless you are very
lucky (see paragraph above) you
will probably not have any
income for at least three to four
months. First you have to find a
client, then you have to secure a
contract, and usually it takes a
month or more to close the
transaction, which is when you
actually get a check. Instead of
thinking that the cost of entering
the business is a few hundred
bucks and you will make thou
sands, you might want to con
sider that the true cost of enter
ing the business is a few thou
sand bucks, and there is no guar
antee you will earn it back. You
will also have to pay state and
federal taxes on what you have
left after expenses.
The number of realtors (those
affiliated with the National
Association of Realtors) as a
percentage of the population has
never been higher. The Pickens
County Board of Realtors (asso
ciated with NAR) has 199 mem
bers as of May, and while that
all time high most likely repre
sents a majority of active agents
in Pickens County, there are still
many people who are active
agents that choose not to join
PCBR. To my knowledge, no
one knows how many people in
the county had a license at one
time which has lapsed or is no
longer active, but using the
national failure rate that number
could be astonishing in size!
If you are thinking about
entering real estate, give it some
serious thought before taking
the leap of faith. If you are a
self-motivated hard worker,
who has a decent amount of
money to get started, realistic
earnings expectations relative to
work invested, who enjoys
being around people and is
capable of working mostly
alone, it might just work. If you
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