Real Estate is not for the faint of heart…
Real Estate is not for the faint of heart… 12 years ago when I got my Real Estate license, little did I know that what they teach you for the exams is not what you land up doing in real life scenarios! And another thing I did not know that our industry is viewed so poorly by the general public.
Consumers think that we are all con artists, looking to make a quick buck from an unsuspecting consumer. Our industry leaders have done nothing to improve or elevate the status of Realtors. And why would they? Issuing licenses indiscriminately is a way for the BRE to make money! After all, the government agency wants people to pay dues, fees, taxes in order to survive and thrive.
As much as it frustrates me, I sometimes agree with consumers. Hundreds of thousands “fly-by-night” agents inundate the Real estate industry. When I got my license in 2004, I was lost for a long time. Not knowing what I was doing and feeling that I am a liability to my client, especially since I knew nothing! The language of real estate, what is escrow and title, what are the terms on the contract and many others- I knew nothing. And I deal on a daily basis with agents who know nothing and I am literally doing everything for them!!
Many people who just got their licenses tell me they are doing this to supplement their income. Which means as soon as the market takes a dip, all these people will vanish. They are not operating as business owners and the chances of survival are slim to none. We are part of a service industry and fulfilling that role to the best of your knowledge and skills is critical.
Another big misconception consumers have that Realtors make “tons of money”. When I hear that dialogue, I try to stop myself from laughing! This country operates its small businesses on a multi dimensional platform. The real estate industry is operated by brokers who provide an umbrella for the independent contractors to hang their licenses with. For that purpose and the fact that large brokerages own market share and branding- agents have to pay a split of their commission to the brokerage, along with franchise fees, office fees etc. And after that, let’s not forget the wonderful IRS that digs in over 40% in taxes! Then we have to pay board dues, fees for our state level and national organizations, MLS fees, Lockbox fees, marketing (which costs an arm and a leg), staff salaries, health insurance that comes out of our pockets, gas costs – do the math yourself? I sure wish I was a multimillionaire after paying all these costs.
As an industry, we need to work towards gaining the respect of consumers. Many companies have tried to “buy” clients by “offering rebates” as an enticement . All these so called disruptors try the route of volume business but eventually then circle back to the traditional brokerage model because it is financially impossible to survive by giving away their money.
It is about time that the government and our governing agencies created :
- A higher bar to entry, raising the standards of required education and testing standards.
- Mandate that all new agents must gain certain amount of experience working in a team to go out and conduct business on their own.
- Increased regulation of the industry- just like the mortgage industry- this will clean up the house.
- Licenses to be issued only for full time professionals and not part timers. Part time realtor’s, in my opinion, are a big menace to consumers.
- Mandate that all buyers must sign a buyer broker agreement, just like a seller has to sign a listing agreement. This will increase productivity for the Real estate agent as it commits the buyer as well.
There are many states in the US that have stringent regulations, why can’t these be replicated at a national level? It is my sincere hope that the readers of this article understand the challenges we face as Realtors. Futile hours, weeks and months of working with clients, not getting paid and probably getting dumped by the client- it’s not pleasant or fair that after all the hard work put in, the consumers treat you like scum. Have some respect, we too work hard to make a living and feed our families!