What’s it like to be a Realtor? I suppose a question like this is best answered: It depends who you ask. Like anything, there are those who are successful and those who are not. A real estate agent is an entrepreneur who wakes up every morning unemployed. There’s no store front, there’s no brand other than what you make (you can see my website here), no salary, no 401K and no vested stock options. You can’t get fired and you don’t have to go to work if you don’t want to. But then you won’t make any money either. It’s the Wild West, it’s a precipice; it’s sky diving without a parachute. It’s not for the weak of will or heart and like every sales position, it’s not for everyone, even though just about everyone tries. Makes you wonder, “Who’s crazy enough to think this is a career?”
One day my son was speaking to my mom after landing his first job selling TV’s for Sears over the summer. He said, “Nana, being a sales person is easy, you just talk to people and help them find what they’re looking for.” My mom disagreed, she said, “Adam, being able to speak with people and be comfortable talking to strangers, is a skill and a gift. Not everyone can do it.” My son didn’t see it. “Anyone can do it, it’s easy. You just talk to them.” Ah from the mouths of babes. What my mom understood but my fearless young adult son did not, is that selling is a skill and not everyone is good at it or cut out for it. It’s not always easy to understand what people need, what they want and how best to help them. This is especially true when your livelihood is dependent on you selling them something. This is why so many people fear a salesperson is more concerned about earning a commission, than helping them. Staying true to the belief that you can only be your best when you are helping others can’t just be lip service, it has to be real and sincere. Another pitfall is that salespeople need to be “up” all the time, but it’s not easy to be “up” all the time, especially when you haven’t closed enough deals and money is tight. All sales is tough racket but that’s why sales people in every industry are paid well. It’s high risk and high reward and real estate sales are especially difficult. You just never know where the next buyer or seller will come from.
It’s said in real estate that 90% of the money is made by 10% of the agents. This means that 90% of the agents are fighting for a mere 10% of the commissions. If you’re in the 10%, real estate is a good business and if you’re in the top 5% it’s a great business, but most people starve. This is why you find so many part time real estate agents; they need a real job to pay their bills. You can’t blame people for trying out real estate. Realtors drive nice cars, it’s not that hard to get a real estate license, you don’t need a lot of money to get started and those big commissions! Realtors drive nice cars it is true, especially in Los Angeles, it’s really a basic tool of the job. We’ve all heard the phrase, “Dress for Success” and to a Realtor a car is an extension of that theme. Most people will tell me that they wouldn’t hire a Realtor just because of the car they drive. Yet, a car is an easy way to prejudge a Realtor’s success and when it comes to your most important financial decision and investment, hiring a successful agent is essential. With so many amateurs with real estate licenses (think of the 90/10 rule) appearance really does matter. Is this superficial? Yes. Is it still important? Absolutely. A real estate agent has to be the first or second agent thought of; being third means you never get the call.
Early this year I had a buyer in escrow on a $900,000 property. He had read in the local weekly paper that I sold $26M in real estate last year. He says, “Is that true?” I said, “Yes it was.” He said “I want your job. I did the math and $26M times 3% means you made…” I stopped him right there. “That’s just not how it works.” Why? Because I don’t get all that. I’ve got to spend literally tens of thousands marketing myself and my listings. And even though I am a broker, I still work under a broker and that broker takes a cut. So does the Company and sometimes there are referral fees due. What made the conversation so ironic was that we had been working together for over a year. We’d written some offers and even been in escrow before this one. Then when it came time to put his money up and lift his contingencies, 4 days before close, he called to tell me to cancel. As I hung up I said to him, “So, you still want my job?” Nice homes and sometimes not so nice homes; fancy cars, an occasional suit and tie but usually casual dress. It all sounds pretty good or would if not for the fact that you work for free until you actually close something. That’s right, for free. No retainer, no stipend, no per diem, nada.
On a typical day I’m working on marketing – who to reach out to, what mail pieces do I mail… I write letters to clients, make calls, write in my blog… A good day is a listing opportunity. A great day is a sale and a “Woo-Hoo” day, a closing. Listings are the business. Think about it, in a weekend I can work with 2 maybe 3 buyers in a day if each is only looking at a few homes. How many listings can I have on any given weekend… 5, 10, a 100? So it’s all about listings. When I meet with a prospective seller, I have already started assessing how to help them from our initial phone conversation and now in more depth, in person. I have to rest their fears, understand their motivation and goals and I have to be able to do this within an hour interaction. I pride myself on being able to listen and know how best to advise them. I know my market as well as any and better than most. Every seller is different. Many times I am faced with this situation: Tell a seller what they want to hear and get the listing or tell them what I think they need to know, understanding that this honesty could cost me the listing. “Obvious” you say, but not as easy as it sounds. Imagine saying this: “Mr. & Mrs. Seller, I understand what you need from the sale of this home to buy your new home: you need me to sell your home for 10% above the market.” That doesn’t go over real well. But over pricing a listing could mean an agent is going to spend a bunch of money and not sell, eventually losing the listing to someone else who undoubtedly gets the seller to list for a more realistic price. The prevailing opinion is, “Take the listing and you can always get the seller to reduce later; after all it’s their home…” It takes a lot of savvy to be able to sit there across the table across from a would-be seller and set them straight, knowing that a competitor is almost certainly going to pander to them and offer to list the home at whatever it takes to get the seller to sign. But after so many years of seeing what results from that approach, I’ve learned I just have to stand tall and come correct, (contact me here). If that doesn’t work, you have to able able to live with yourself and hope you’ve demonstrated you’re still the agent to hire and if not, that you’ll be the agent they call when the home doesn’t sell and the listing expires.
Real estate coaches teach, the real estate business is not so much about the houses or marketing, it’s all about prospecting. Getting a client is the first and most difficult part of every day I’m a Realtor. Some agents door knock; they’re always around the neighborhood, saying “hi” and handing out pads or magnets. This is a very effective type of marketing. Other agents build special relationships with past clients. They know your birthday, they send your kid’s birthday cards, and invite you to poetry readings and bunko games, wine tasting. They are like family and who better to trust?
Me, I approach real estate more like an account or attorney. It’s a professional services business and that’s how I approach it. I’ve been doing this a long time and most of my business comes from referrals and past clients though do I specialize in a few neighborhoods, so that makes me the area expert. Of course mine is just one approach, I just happen to think it the best. I’m friends with my clients, there when they need me, but they know when it comes to real estate I’m all business and that’s why they hire me.
It’s funny really, I see lots of homes, lots of décor and get to drive a cool car; this is the persona of a Realtor. Being a Realtor is about helping people, but it’s also about understanding the numbers; knowing how to negotiate successfully, how market and sell property, how to manage the process and after all that, getting out there prospecting for future business. That’s the life of this Realtor. It’s a tough racket my father in law used to say. It’s rewarding, it’s terrifying, but I wouldn‘t trade it for anything… this week anyway.
You hit the proverbial nail right on the head – well written my friend! Both an honor and a privilege to assist clients in the biggest investment(s) of their life.
Really appreciate this article! Couldn’t agree more.
Enlightening post, enjoyed reading it!
You are spot on with your analysis.