When you first get your real estate license, you’re full of anticipation and a little trepidation. Your first broker experience is a lot like getting interviewed for a new job.
Although I might be a bit critical of some over-zealous broker recruiting tactics, I must say, some of the best brokerages do actually interview real estate agents and make a decision on whether to hire them or not.
There are a ton of things that you learn in the first year of real estate, and unfortunately, brokers (with some exceptions) fail to prepare you for it all.
Here are eight things your recruiter broker didn’t tell you about real estate.
1. How much paperwork there is
This is a big one. The real estate schools are full of people coming for the perceived money in the transactions, but few come for the compliance paperwork. I imagine if they explained the amount of work in just one real estate transaction, there wouldn’t be as many people getting their license.
Michael Perna, a Keller Williams Realty Agent in Novi, Michigan, said, “My first broker didn’t walk me through the anatomy of a transaction or the paperwork associated with it. He said ‘go make deals happen.’
Perna said that he had no idea what paperwork to do with his first listing, and with his first buyer, he couldn’t figure out how to open the lockbox.
“Both deals subsequently fell apart because of my lack of skill and his lack of availability to help with questions,” Perna said.
He said one thing to do when being interviewed is what any good interviewee does, “ask questions!” In particular, he suggests looking at the training calendar.
2. How long it takes to get paid
In the process of writing this post, I was surprised at how many financial things were missing from the conversation. After all, the No. 1 reason agents get licensed is usually related to money.
“When I started, I was told it might take a while to get my first check, but [I] was not ready for it to take six months! I received my license in the fall, and by the time I went through the training, it was early winter,” Ed Huck, a Keller Williams Agent in Cleveland, Ohio, said.
Luckily for Huck, the hard work and perseverance paid off. Unfortunately, Huck’s story is very common.
Even under the best scenario, where you get licensed and immediately find a client, there is a servicing time of 30 days or more in some states, closing time of 30 to 60 days and then simple check processing.
New agents aren’t likely to get paid for 60 to 90 days even under the best circumstances. One little fact that is excluded from most “interviews.”
3. How to manage finances
Another big one that a few agents mentioned when asked was how to manage finances. They signed up to be a real estate agent to get the fat checks, but no one explained to them how to budget properly.
“A lot of agents will join our office (we don’t recruit much), have a closing, then go spend it all and be broke until the next commission check,” said Robert Arnarumo, the broker-owner of Florida Realty Marketplace in Davenport, Florida, said.
Another agent, team leader I spoke with suggested that every agent needs to go through a financial planning class to learn how to budget.
4. How small the checks really are
It’s certainly debatable about how “small” a check is. However, one common theme from new agents is that they simply didn’t realize how much money goes to the broker and taxes. Many of them got their license and are surprised, particularly by the first few checks.
The agents I talked to were really surprised by that first check, which in their cases were 50 percent or less. They caution other agents to read the fine print of those recruiting documents.
If a company is offering you signs, lockboxes, CE credit (or the license class itself), then chances are really good you’re going to pay for the convenience. There is no free lunch in real estate.
5. That it’s going to require a lot of uncomfortable work
As a real estate team owner myself, I can remember sitting down with new agents and seeing the shock and disdain when I described what kind of work I wanted them to do.
In my case, I was handing them homebuyers to call, but they’d have to call for hours every day.
The funny thing is that brokers don’t lead with, “Oh and tomorrow, you’ll go knocking on doors,” Pam Ahern, A Palmer House Realtor in Atlanta told me.
“They tell you to go make a bunch of friends, and you’ll have a great career. How can you make a bunch of friends calling them at dinner, or showing up at their house unannounced?” Ahern was half-way joking, but the reality of lead generation is that it’s hard work and harder still to be consistent.
6. That it’s a business (not just a hobby)
So many of the veteran agents I spoke to would tell me they wish they went into this career with a business mindset.
“My life changed when I started approaching this like I would any other business,” said Brayson Verzella, a Keller Williams Agent with teams in San Antonio, Texas, and Orange County, California.
“When I started treating real estate like a business, my habits became better. I started to think about ‘what would a business do in this situation?’ Ultimately, when my team is organized like a business, and I hire salespeople for that business, just like most businesses,” he said.
Several agents referenced The Millionaire Real Estate Agent book by Gary Keller as a source of inspiration in this regard. The sentiment I got from talking to agents was that brokers are quick to add people to their brokerage, but if they slowed down and educated agents about the business that they’d actually have a more successful brokerage.
The parting shot of many of the agents when asked, “Why do you think brokers neglect this?” was that brokers are scared of creating competition for themselves.
7. How important the job really is
One common theme with agents I spoke to is that they wished their recruiting broker cast the vision of how real estate can be run like a business and that approaching it like a hobby wasn’t illegal but might not be in the best interest of the client.
Real estate is the ultimate side hustle, but veteran agents told me that they can’t count how many thousands of dollars they have saved their clients by being on top of their game.
As an agent, you help someone during one of the most stressful events in their life, and if you do a great job, you can reduce the stress. If you, on the other hand, take the responsibility lightly, you could add to the stress.
When there is stress, there is an atmosphere for some bad things to happen, many of which are expensive.
One particularly interesting side note was a story from Reilly McGregor of Harborview Realty in Marco Island, Florida.
“When a new agent lists a home on Marco Island, the veterans all get excited because they know they will be able to exploit the ‘out-of-towner’s’ lack of knowledge of the area in order to get a deal on a home,” he said.
Reilly explained to me that although the market does tend to force pricing issues, little things like move out dates or understanding the homeowner’s association rules can be huge. He has seen agents lose deals because they didn’t disclose things like no-rent clauses to clients.
Conversations like these remind us that while real estate can be fun, that people’s lives and money are in our hands to direct and be stewards of.
8. How many different opportunities there are in real estate
Brokers are usually so lazer focused on recruiting and so worried that they will dilute their message that they rarely tell agents how many opportunities are out there for them.
Including different forms of lead generation, different niches to specialize in and completely different real estate types to sell are often available but never mentioned.
To be fair brokers can’t cover every possible thing for new agents.
At the same time, however, brokers should be more interested in finding great long-term “team members” versus just recruiting bodies. In particular, setting proper expectations on what it takes to succeed, how to manage the funds and being transparent about commission are all big takeaways.