So, You Wanna Be a Real Estate Agent… How Much Does it Cost to Go Into Real Estate? Part 1
Guest Post by Jennifer Allan-Hagedorn
So, moving on from our earlier cheerful discussion about the income potential of a real estate agent…let’s talk about whether you can AFFORD to go into real estate right now.
Fact is, it costs money to be a real estate agent and chances are that you will not make any money for several months once you officially begin.
Let me say that again and please “listen” with every fiber of your being: “Chances are you will not make any money for several months once you officially begin.”
Many first-year agents do not make a dime until their sixth or seventh month in the business; some take even longer than that. That’s a fact and should not be taken lightly, or dismissed as something that won’t apply to you because you’re special. You very well may be special; in fact, I’m sure you are, but you MUST prepare for this possibility. If you are among the few who begin making money right away, that’s fantastic, but I’m sure you won’t regret having a nice nest-egg socked away for yourself. But PLEASE do not go into this career thinking that you’ll receive your first paycheck in a month or two because it’s likely you won’t. And all the while, you’ll be paying out money for the privilege of having a real estate license.
A few months ago, a first year agent contacted me to ask about one of my training courses. During the conversation, she casually commented that she felt misled by her early advisors because they failed to mention how many nickel and dime expenses there were to being a real estate agent. Of course, she wasn’t referring to actual nickels and dimes; more like $200’s and $400’s! I felt bad for her, but I confess I had to ask myself why on earth she would have gone into business for herself with so little financial commitment that a few unexpected $200 expenses put her at the brink of failure.
Because, my friend, you ARE going into business for yourself, make no mistake. And you need to take that concept seriously.
How seriously? That is – how much money should you have put away before jumping in?
That, of course, depends on you and your personal situation.
Some new agents have saved up a nice nest-egg for their venture into real estate and will be able to pay their start-up costs, ongoing expenses and household bills for a reasonable about of time.
Some new agents have a supportive spouse or partner who is willing to pay all the household bills during the agent’s non-income-producing months.
Some new agents have taken out personal loans to finance their venture into real estate (I don’t recommend this approach).
Some agents have (and intend to keep) a relatively well-paying and flexible job that they feel will accommodate their venture into real estate.
But some agents have a family to support, with no outside or supplemental income, and no discretionary money in the bank.
Before I continue, I’d like you to spend a little time today being honest with yourself about your own personal financial situation. Please do the following assignments by the end of the day today:
- Add up how much money you have saved to invest in your real estate career
- Figure out how much it takes to run your household on a monthly basis
- Calculate how much income would be coming into the household if you become a real estate agent
We’ll return to this discussion soon!
Jennifer Allan-Hagedorn began her writing career after ten years of selling real estate successfully in Denver, Colorado. She was dismayed at the low level of professionalism she frequently encountered in the real estate industry and, with her “soulful” message, hopes to encourage the real estate community to self correct the negative stereotypes of the profession.
Jennifer’s message to agents is that they should strive to be competent real estate advisers, rather than competent real estate prospectors. She urges agents to respect the intelligence of their clients, rather than attempt to insult that intelligence with aggressive closing techniques. She preaches that agents should appreciate the significant commissions paid by their clients, rather than complain that they, themselves, are not appreciated.
Allan-Hagedorn is the author of seven books about real estate and one of the industry’s most popular bloggers. She is also an avid dog rescuer in the Panhandle of Florida.
To learn more about Selling Real Estate with Soul, visit Jennifer’s website www.SellwithSoul.com