Going once, going twice….
AKA: Big fat commission check. What could be easier?
In part two of the chasing the dream job series I go find out if being a real estate agent is the career for me.
The idea of the series is to go and talk to a friend, ex work colleague, high school sports teammate or family member who works in the industry to find out first hand what the career is like and because they would have my best interests at heart, would tell me the complete truth. What they love, like, dislike and flat out hate about their day to day. I often find myself day dreaming after a rough day at work about how much better life would be if I had another career. This series is to put my mind at rest, firstly to see if switching is worth the effort or secondly to know the truth so I don’t have to think about it going forward.
To get to know more about the career of a real estate agent, I spent a couple of hours on a sunny weekday morning (I took a day annual leave) to catch up with my old work colleague Keiran from a previous company. He switched from being a supply chain planner (think containers, trucks, pallets) to a fully qualified real estate sales person in six months time and recently just sold his first house.
How does someone get into real estate?
Here in New Zealand you are required to sit a real estate sales person national certificate. Depending on where you get your qualification, it takes 12 weeks full time study (think going to lectures, in person) and will set you back $1000-2000. But hey, it’s worth it now you can sell $1 million dollar homes legally. So seems fairly simple. Easy money from here on in right. Well, lets find out.
What do you need before you start selling real estate?
First off, you need to set yourself up with a real estate company. This is a crucial step Kieran said, as the agency you choose and the suburb you are based in can have a big flow on effect on how well you do in your career. He chose a reputable company (Auckland’s largest agent Barfoot and Thompson) to begin his career with as they had great training and to boot his father and law has been an agent with them for over two decades. He also needed a slick haircut, new business suits and a newer car as in this game, image is EVERYTHING! If you total up the time he wasn’t able to work being 3 months at say $4000 a month net income ($12,000), the $2000 for the course and buying new suits, shoes, etc ($1000) and a late model car ($10,000), it has set him back $25,000 just to get into the game. This isn’t small change in anyone’s books.
I’m beginning to understand why he told me to get into real estate you either need;
A: Money behind you to begin with.
B: Your significant other working full time to support you in the early stages. Unfortunately (or fortunately) for him, his wife joined him in making the switch so they sell real estate together now.
How to get your first property listing?
This is where the reality of this profession really hits home.
Keiran had left the more or less secure income in the supply chain industry with annual leave, sick leave and other perks built in for the unknown future of being his own boss. He had been a real estate agent along with his wife for near on four months when I spoke to him. He hadn’t had a single sale yet. They just got their first listing. At the time of writing, him and his wife had just sold it. Pocketing their 1.5% commission on the 800k-ish property. So for months of work, two people with no income and $12k to show between them. With a three year old baby, this is really sink or swim.
In order to get their first listing, they divided and conquered. Their main sources of leads for listings were;
- Knocking on doors. This is self explanatory. You went around your neighbourhood with business cards in tow and introduced yourself to strangers and asked if they were interested in selling their house. The hours of this were generally 7.30-8.30am when people were home before work or 5.30-8.30pm at night when they were back home from work. They found that going during the day was futile because not many people were home. They estimated over the course of a week, they would knock on the region of 200 homes. Be prepared for rejection after rejection. A few people politely told him to fuck off, and others invited him in for a tea and biscuits.
- Mail drop. Miss Health and I must get about five of these a week from different real estate salespeople. They are little postcards with a spiel about how great they are, how they will sell your house for a good price and promise the earth. You have to find people at the right time for this. Perhaps you drop your filer in the mail the exact day someone gets a job in a new city, someone in the household passes away or they want to upgrade or move suburbs. Timing is everything. Otherwise, like for our household, it is just expensive glossy paper recycling that goes straight in the bin.
- Social media. Linked in, Facebook, blogging. For the most part everyone has access to the internet who wants to sell their house. If you have a big internet footprint, you are more likely to pop up in news feeds, articles and Google searches. This creates a “story” behind the agent.
It must be hard working yourself ragged not knowing where the next paycheck is going to come from. A family to feed, leaflets to pay for, bills to pay with no income coming in can get hard really quick. Keiran said 90% of agents don’t make it through the first year for the above reasons. Of those that survive, only 90% of those left make it to year five. So five years after starting your real estate career, you have a 1% chance of making it five years.
Those are not great odds at all. You need to (I need to) seriously consider this before I ever make the switch if I choose to.
Luckily for my friend Keiran, his wife’s father is a competent and vastly experienced real estate agent. This was partly the reason they both decided to get into the career in the first place. He is essentially their mentor and because he is now a branch manager and cannot legally sell properties anymore, he will get phone calls along the lines of “Hey, I remember you sold a house for us several years ago, we would like you to do the same again because we liked your service so much” this generally leads to “I can’t due to being a branch manager, but my daughter and son in law are now agents, who I highly recommend, I can come to the first meeting with you to meet them”. This is essentially they got their first listing after four months in. Lucky break! If it wasn’t for the father/father and law, I believe they wouldn’t have made it. They admitted this to me near the end of our discussion also.
Day in the life of a property salesperson?
Keiran and his wife wake up, get all dressed up for the day and get their daughter ready for preschool. By 7.30am he is out of the house, banging on doors before he reaches the office. He checks in with the sales team, the branch manager and any enquires that were left for him via the receptionist. He then builds rapport with the team to make them think of him if any potential house sellers are walk ins into the office.
After that, it’s off to meet with potential clients, prepare sales brochures, scope the neighbourhood and hand out those flyers into mailboxes and door knocking. Several times a week they go to the auction room to keep tabs on the marketplace.
Working late nights is commonplace with phone calls, emails and other related tasks. If you think being a real estate salesperson is standard 9-5 you would be very wrong. You are meeting people outside of these hours, early mornings, late nights and weekends. Children’s sport and after school activities will become difficult going forward, however your hours can be flexible to suit, so there is no hard and fast rules.
Being a real estate salesperson is a great chance to be your own boss and get rewarded for hard work that you don’t necessarily get compensated for working as an employee. There are benefits such as unlimited earning potential, flexible hours as you choose when to meet clients and complete tasks. It’s also a great industry if you are a handy sales guru, dealing with big numbers with houses approaching the million dollar mark.
There are claw backs. The industry is overrun with salespeople and getting a foot in the door and differentiating yourself from the thousands of others leaves you with a 1% chance of succeeding after 5 years in the industry.
You are going to receive a lot of rejection from door knocking and tire kicking buyers and sellers taking up your time with no sales commission from them.
Overall, I’m not quite sure if leaving my current career path to pursue real estate selling is quite for me. But never say never, it could be a post retirement job that I would relish. The near future of becoming a family with Miss Health and having children and the lack of secure income would make me lose sleep I’m sure.