|
| Posted By |
Message |
none4me
LIF Infant
Member since 7/08 168 total posts
Name:
*
|
Real estate?
I currently have a full time job that I love but helped a friend show and rent an apartment on craigslist. It got me to thinking of exploring my real estate license for supplemental income. I could show on evenings and weekends. I'm not sure if that is possible or a sufficient income can be made that way. Any advice from realtors as to how it works in terms of salary. Do you keep the entire comission or just a percentage? Is there a lot if overhead involved? I'm very personable and can really see myself being successful at this. Tia!!
|
Posted 9/22/12 4:18 PM  |
| |
|
Long Island Weddings
Long Island's Largest Bridal Resource |
|
|
Re: Real estate?
First, feel free to contact me directly via FM or at [email protected] if you have any specific questions or want to just hear more about the business from someone who is in it. I am a full-time agent.
As far as whether it would be worth it to get into the business part-time to supplement your full-time job, I think you have to consider a few things:
1. There are some costs, both to getting started in the business and to maintain your license. First, you need to take the licensing course. I didn't have to take it, because I am an attorney so it's waived, but I believe the licensing course is 90 hours. You can do it online or at a real estate school, but either way, you have to pay for it. Then, there's the licensing exam (which may involve a fee, but again, I didn't take it so I am not sure). Then, you have to pay for your license -- you renew it every 2 years, and I think the cost is in the ballpark of $150). You can look on the New York Department of State website to get more information on how to get licensed.
2. Once you are licensed, you also have to pay annual membership dues to be a member of your local MLS. On Long Island (which includes Queens, Nassau, and Suffolk), the dues are approximately $580/year.
3. Once you are licensed, you need to take courses for continuing education (again, unless you are an attorney and the requirement is waived), and the courses cost $.
4. As a real estate agent, you may want to invest in marketing efforts, as you are essentially running your own business and responsible for generating your own customers/developing your own business, even though you are working under a broker within a larger company or franchise. So you are an independent contractor with related expenses.
Of course, all of these expenses are tax deductable, but you still have to lay out the cost of them upfront, and they still eat into any income you generate from your business.
As far as how commission works -- In real estate, you work solely off of commission. And you definitely DON'T keep the entire commission. Different companies have different commission structures. At a lot of large companies, you pay what's called a "franchise fee" that comes off the top of your "side" (usually, you get one side -- buyer or seller -- per transaction, but sometimes you can have both sides, i.e., sell your own listing). Real estate commission varies, but the average side on Long Island is probably somewhere between 2% to 3% of the purchase price. Some companies don 't have franchise fees, but will charge you a "desk fee" (a flat fee per month or year for being affiliated with the company and using the office resources).
Once the franchise fee (if applicable) comes off the 2-3% you are getting, you split the commission with your broker. The split varies - it can be 50%/50% or it can be 90%/10%, or anything in between. Many agents within the same company are on different commission plans and have different arrangements. A top producer who meets certain sales goals will often get a better split than a brand new agent who has yet to bring in any business. Sometimes the split will vary depending on whether the customer who bought or sold a house was found by the agent or generated by the company (through company advertising, etc.).
It can take awhile to get your business up and running in real estate, even if you do it full-time. So you have to be prepared not to make that much money right off the bat. But I have seen agents be successful on a part-time basis. However, many of those agents partner up with another agent and work as a team, to allow for better coverage. For example, you will be available nights and weekend for showings, but other aspects of real estate work (e.g., home inspections, calls to banks and attorneys, closings) occur during the day during business hours. So having a partner can help you provide better, more comprehensive service to your clients and customers. Of course, working as a team will cut your commission in half, but 100% of nothing is nothing, you know?
Another things some agents with other jobs do is maintain their license but just work by referral. By that I mean they find the customer who has a need to buy or sell, refer that customer to an active agent, and oversee the process, but the active agent handles all of the day-to-day work. Then, the active agent gives the referring agent 25% of their side. It's a good way to get into real estate if you have a large network of people to tap into but don't have the time or desire to service all of their needs yourself.
I've also seen a lot of agents in higher end markets "dabble" in real estate (do a sale or two per year). If you are working in a more exclusive area selling multi-million dollar homes, one or two transactions per year that you may get from friends and family will more than pay for your licensing and dues and net your a decent amount of money, too. If you are selling condos or co-ops or starter homes, it's going to take a lot more sales to make it worth your while. But then again, only you know how much money would make it "worth your while."
I would just make sure your current employer doesn't have any rules to prohibit you becoming a part-time real estate agent. I know certain companies would consider it a potential conflict of interest or have clauses governing "moonlighting" activities.
Let me know if you have other questions! I love real estate and think it's a very fun and flexible career with a lot of income potential for people who come in with the right expectations!
|
| Posted 9/23/12 5:38 PM |
| |
|
none4me
LIF Infant
Member since 7/08 168 total posts
Name:
*
|
Real estate?
Thank you so much for your really comprehensive answer! Defiantly food for thought.
|
| Posted 9/23/12 6:56 PM |
| |
|
Beth
The Key to your new home....
Member since 2/06 24849 total posts
Name:
Beth
|
Re: Real estate?
as a full time realtor- I am going to be honest and tell you that it would be VERY hard
I work all day at the office, doing marketing, setting appointments, following up on deals- I was just at the building department doing a C/O search for a buyer
and then in the evening and weekends I show, go on listing appointments and do home inspections
there is so much more to real estate then just being nice and having people like you- that part is important- but putting the actual deal together is where I spend much more of my time
showing the houses is the easy part- to me
dealing with the contracts, mortgage, c/o issues- which has to be done during the day- takes time
most full time agents don't even make money- 50% of realtors with lic don't close 1 deal a year
93% of the business is done by the top 7% of us
I think it's a great business- but the days of the part time agent are over- my broker wont even take on someone who isn't full time anymore
ETA- it's a 75 hour class and it's $50 to renew you lic every 2 years for a sales agent
Message edited 9/24/2012 4:38:40 PM.
|
| Posted 9/24/12 4:36 PM |
| |
|
|
|
Re: Real estate?
I'm an attorney and I have never claimed my license (as Christine said, we do not have to take the exam.) I know only 3 attorneys who have.
1 is Christine, above.
Another is a close friend who shut his law office down in order to give real estate a go. He didn't feel that he could go back and forth and he had to give it a proper shot in order to know if it was right for him. So far so good but he is in Manhattan and has connections for some very high end listings.
The final one is an attorney full time and he does some real estate on the side but his wife is a full time broker. So he has her to fill in where he is part time. I think that's really the main reason that it works.
I think that buyers and sellers, especially if you re in NY, demand an extreme amount of availability.
I know I am not exactly encouraging but in the end only you can make the decision. I think it's tough to start any profession part time before you know the ropes.
|
| Posted 9/25/12 11:13 PM |
| |
|
none4me
LIF Infant
Member since 7/08 168 total posts
Name:
*
|
Real estate?
Thanks for the feedback. I'm sure being a realtor like all professions can be very time consuming. I was thinking on a smaller scale such as rentals. Not so much houses as I wouldnt be able to dedicate as much time to it as need be.
|
| Posted 9/30/12 1:32 PM |
| |
|
Beth
The Key to your new home....
Member since 2/06 24849 total posts
Name:
Beth
|
Re: Real estate?
rental can be very time consuming for very little money
let's say an apartment is $1000
that's $500 for you
minus a brokers fee- 50% at most places
so that's $250
minus gas, taxes and time....
|
| Posted 10/5/12 4:53 PM |
| |
|
|
|
Re: Real estate?
Posted by Beth
rental can be very time consuming for very little money
let's say an apartment is $1000
that's $500 for you
minus a brokers fee- 50% at most places
so that's $250
minus gas, taxes and time....
I totally agree with Beth. I don't work with many renters for this reason (unless it's a referral or a past customer). Most of my business is sales, and when I handle rentals, it's often from a listing standpoint (listing houses for rent on MLS).
As a real estate agent, your time is money, and you have to be efficient. You don't get paid unless you close a sale or a rental, so you want to spend your time doing the activities that will yield you the most money. I think the people who get burned out on real estate are those who come in like gangbusters, and spend all their time doing a lot of busy work that won't result in closed transactions, and then they get turned off to the business when they don't make any money.
The time investment of working with a renter can be comparable to working with a buyer, and there's less pay-off (the agent commission for a sale in my market area is probably around $4K, versus a few hundred dollars for the rental). Plus, there's also less loyalty. A lot of new agents in my office start out handling rentals, and invest a lot of time setting up appointments, researching properties, only to find out that their customer found their own apartment on Craig's List. Buyers really do need real estate agents, but there is a bit less of a need with renters. They really can do it on their own, if they want to. Some people feel more comfortable with the real estate agent as an intermediary and think not all Craig's List rentals are legit -- which is a real concern -- but the need for an agent is more optional.
There are a few successful part-time agents in my office, and they are partners with another agent (who is either part-time or full-time). These agents may have other M-F, 9 to 5 jobs, but their partner covers work during that time period, and the part-timer will handle more of the weekend work (e.g., open houses). I also know agents who work together but one does more of the "behind the scenes work" (computer stuff, phone calls, booking appointments, etc.) and the other handles more of the "fieldwork" (consultations with clients, showings, etc.).
You can work out whatever arrangement you want with your partner (it doesn't have to be 50/50) based on whatever you think is fair (it can be based on who is doing more work, who brought in the client, etc.) But I think you would still make more income that way, concentrating on sales, and working with someone to ensure you can provide full service.
Also, some part time agents in my office close only a couple of deals per year. To them, it's worth it to maintain their license and make a little extra money on the side. With real estate, you are your own boss, so you can decide what your income goals are, and then the amount you work can flow from there. Some part-timers don't try to bring in new business, they just handle whatever referrals they get from family and friends, andt that's enough for them. It's defintely do-able as a part-time thing, but you can't expect to make six figures if you only can spend an hour or two a week, you know? It's all about expectations.
|
| Posted 10/6/12 10:28 AM |
| |
|
Potentially Related Topics:
Currently 43757 users on the LIFamilies.com Chat
|
Long Island Bridal Shows
|
