CHAPTER 1: THE SALESPERSON
LECTURE NOTES
I. The Salesperson
The total number of real estate licensees tends to fluctuate with the
market place. As the market softened and residential sales slowed,
many newcomers to the field have become disillusioned and left
whereas others will take this time to learn their craft and be prepared
to bring their expertise to the market place with the next real estate
boom. Typically real estate cycles last about 10 years.
This is an excellent time to learn the skills of the business and to be
prepared for the next upsurge and perhaps make a decent living
while doing so over the next few years.
A. Things to consider:
1. Working Part-Time in Real Estate
While it is possible to work part-time, most large brokerages frown on
it. The large brokerages want to hire sales associates who are
committed to making this their full time chosen career. They do not
want to invest their resources in novices who may get disillusioned
and find it too easy to go back to their other career.
That said. There are many independent and small brokerages that
encourage part time sales associates. They know that you will be
able to get listing from family, friends and perhaps people you work
with in your other job and are happy to accommodate you.
2. Fringe Benefits
When you work as a sales associate you are considered an
independent contractor for most purposes. This means you must
provide your own health insurance (which can become very, very
expensive as you get older). The same is true of your pension plan
which you must fund entirely yourself. If you take a vacation, you
simply lose productive time; you are not going to get a check unless
you have a listing that sells or a sale that is progressing through
escrow. There are no paid holidays.
The bottom line is you pay for all of the traditional fringe benefits that
many people enjoy with a full time career.
3. Long Hours are the Norm
Last Spring the Los Angeles Times reported on a survey of very
successful brokers to see what characteristics they shared The single
most obvious trait was that they worked an average of 70 hours a
week. The other trait was that they found is most advantageous to
employ a licensed personal assistant to who they either paid a salary
or paid a fractional share of their commissions to.
Some recent licensees find working as an assistant to a very
experienced and successful agent is an excellent way to learn the
business and acquire the skills needed to be successful on their own.
4. Create a Realistic Picture of Real Estate as a Career
Many individuals are attracted to real estate with unrealistic
expectations for earnings that may never materialize for them. Real
Estate is not a get rich quick scheme. It takes a lot of hard work and
specialized knowledge to establish a successful client oriented
business. The brokers who success tends to be people and service
oriented and know how to listen to their clients desires.
II. Questions to Ask Yourself Before You Decide to
Obtain a Real Estate License
1. Why do I want to leave my present job? Do I perceive real estate to
be a get rich quick scheme?
2. Do I have a lot of personality conflicts with my current co-workers?
One of the characteristics of a successful sales person is the ability to
get along very well with others.
3. How many sales will I need to complete annually at the median
price for homes in my area, to produce an equivalent income
including the value of fringe benefits and other perks you may
currently receive.
4. Do I have about six months in savings set aside to cover my
expenses until I start making some commission income? (Very few
new sales associates are able to complete a first transaction in less
than 6 months, even in the best of times).
5. Do I own a recent model, clean and presentable vehicle in which to
make sales calls? While the driving a Mercedes is a myth in most
cases, nevertheless, first impressions always count and this is part of
putting your best foot forward when meeting initially with a client. In
general, a fairly recent, clean, un-dented Camry, or Accord, or similar
vehicle will usually suffice in a smaller brokerage, although some
larger brokerages insist on more of a status vehicle (used Lexus
300s area common choice).
6. Do I have the stamina and energy to persist in sales?
7. In addition to meeting my familys expenses, do I have funds for
continuing out-of-pocket expenses that are recurring?
a. Professional fees for the Local Real Estate Association, The MLS,
the CAR and NAR which average about a $1000 per year.
b. The cost of maintaining a vehicle appropriately plus the extra cost
for fuel and increased insurance for using a vehicle in the course of
business and to co-insure the broker you work for.
c. Office costs broker materials, signs, business cards, listing
materials, etc.
d. Sales Training Classes - While some brokerages provide courses
for their new associates at their expense, others require the new
associate to take expensive training at the expense of the new
licensee. Some of these course charge $2000 and more. Sometime
more than one course will be required of a new hire.
e. A professional wardrobe is now required at most large brokerages.
Levis and T-shirts dont cut it.
f. Incidental Costs such as entertaining a prospective client,
business lunches and occasional dinners.
8. Does my family support and encourage my decision?
III. What Opportunities Exist for a Career In Real Estate:
In addition to positions in real estate residential sales, opportunities
exist in the fields of:
Appraisal
Finance and Lending
Escrow
Title Examiners and Title Insurance Officers
Real Estate Development
Commercial Brokerages
Industrial Brokerages
Leasing Agents
Property Management
Buyers Representative
Right of Way Agents
Property Auctions
Subdivision Sales
Land and Farm Brokerages
Manufactured home re-sales
