This is the third article in our series on career advice for those considering starting a career in real estate in Edmonton. We originally outlined the top 5 reasons that most new agents are out of the business within two years as: 1. Lack of planning, 2. Lack of commitment, 3. Lack of resources, 4. Selecting the wrong brokerage and 5. Lack of business savvy. Today we are going to touch on the "lack of resources" that is common among new agents trying to make it in this competitive industry…
After 20 years as a REALTOR® I can look back with perfect hindsight and see all the great and not so great decisions I've made. One particularly brutal year early in my career I had 9 deals fall apart in one month. This would have been financially devastating for me if I hadn't listened to my father (and mentor) when he drilled it into my head to always keep a reserve. Changes in the market last year wiped out a few high flyers, and seriously affected many in the industry (as one very well known agent commented to me – between the drop in his stock portfolio and lack of sales he was almost ruined).
Starting out doesn’t require a huge amount of money in relation to the income you can make. The main issue is to make sure you have the resources to survive should things not go well for awhile. If you don’t and are unlucky you may make some desperate choices that will not only see you out of the business but also in court.
Some companies try to attract agents with extremely low costs, telling them that they will be able to direct their commissions into their own advertising and marketing (since the brokerage doesn't do any). In theory this works well but generally not for new people. Newer agents often are more likely to hold on to the money they earn rather than reinvesting it in themselves through education, technology or marketing. They often find it risky to spend much money marketing their listings (which because of the lack of good marketing don’t sell and become another financial burden instead of an opportunity).
Even though as an agent you work for a brokerage, when you become an agent you are starting a business and you need to plan your success as an agent the same way you would a business. And one thing every new business needs to get off the ground is money. Depending on the type of brokerage you select you will need a different amount of start up capital (for example some brokerages will provide you with new business so you need less start up money for marketing). Start up costs include, but are not limited to your course, licensing and membership fees and may include a laptop (or tablet at our company), marketing materials, a new vehicle, new clothes etc…
Of course you have to remember that one of the most valuable resources you have is your time. So if you have lots of money and no time the result will be fairly similar to having no money and nothing but time. The way I've come to look at my career is that I am always unemployed since I'm always looking for work.
If you're considering a career in real estate we'd be happy to chat with you about the opportunities and challenges that come along with becoming a real estate agent. Our brokerage offers new agents the best chance at success – every one of our new agents has had at least one sale in their first month, and has earned over $100,000 in their second year in the business.
