(CHEROKEE LAKE REALTY WRITES A WEEKLY COLUMN FOR THE GRAINGER COUNTY JOURNAL NEWSPAPER. THIS WAS A RECENT QUESTION ASKED BY A READER.)
I will try. Please let him know not to take his struggles personally, it is a very tough business. You are basically self-employed. If you don’t sell a property, you don’t get a paycheck. It is strictly a commission business. To start a real estate career, you must be licensed which involves paying for courses, examinations, and licensing fees. You must also carry errors and omission insurance. Then when you are hired by a firm, they typically require that you pay a share of the firm’s overhead through desk and advertising fees. There are MLS and board dues. When you sell your first property, it may take more than three months to close the deal and receive a check. So, many times you are going months without money coming in, while you are still incurring expenses. And, when that check comes in a percentage goes back to the firm. This can create an awful amount of pressure which can affect performance. As we all know, when one tries too hard at something it can often backfire. According to the National Association of Realtors, roughly 75% of new real estate agents quit within their first year. And 87% leave the industry within five years. Last year I answered a question as to what I would recommend to someone starting out. My advice was to make sure you have some money in the bank, because you will need it to begin with. Personal savings to cover your first 6-12 months are ideal. If your spouse also works, it does help.
You wrote that your husband works primarily with buyers. Here is some advice on that. Ask the buyer a lot of questions as to what they are looking for in a property and what they can truly afford. Qualify, qualify, qualify. Don’t let them guide you, you guide them. You are supposed to be the expert. A lot of buyers are in town for a few days only and want to see every home in the area that is for sale. I’ve taken calls where a client wants to view homes from Johnson City to Chattanooga and everywhere in between in a single weekend. You are not a tour guide. You don’t get paid for showing folks around. Gas is not cheap. Your time is valuable. When a buyer pulls out Zillow and tells you they want to see twenty or more homes, you will only confuse them if you give in. There is no perfect home. They will like this one’s backyard, they will like the other one’s kitchen, and they will like the other one’s neighborhood. All you are doing is confusing them. If they want a perfect home, they should be looking at land to build their home on. Three homes are the ideal number of homes they should be viewing if you properly qualified them. Save the last one for the one you think they would be most interested in. That last impression will stay with them. If you do a proper qualifying job (and there are courses your husband can take if his brokerage has not trained on the subject) there will only be so many homes that will truly match up with what they are currently looking to buy. And “currently” looking to buy is important. If they are not looking to buy now, and you are spending a weekend with them showing homes, and “if” they come back in a year, what are the chances those homes will still be available for sale? One of your very first qualifying questions should be, “if you find the right home NOW, are you ready to put in an offer NOW.” I know that sounds aggressive, but if they are not, so many things can happen between now and when they are ready to buy a few years down the road. If you are basing your financial future on folks that will be buying much later, who is going to cover your living expenses today? Sure, it’s great to get a call a year later from a buyer that you worked with the year before, but that is rare. Once you have been doing real estate for a bit and have enough deals in the pipeline to cover you financially for the foreseeable future, and you have some down time, take this type of client on. Hopefully you will see the results of your hard work when they are ready to buy in a few years. But for now, you need buyers that will make an offer today if they see a home they like. There is much more advice I can give your husband, but as you mentioned, space is limited. Good luck I hope the career works out for him.
