What Is It Like To Work In Real Estate?
Real estate is unique for a complex transaction compared to other industries. The entry-level requirements are low. In most states, one does not need a high school diploma to qualify for a license. While there are countless college graduates with advanced degrees practicing real estate, neither formal education nor lack of it translates to correct or substandard service in real estate. As an example, when comparing training in an Apple retail store where the sales prices average is $5,000 or less, to real estate with an average sales price of $150,000 or more, real estate offers minimal training. Forty to seventy hours of pre-license real estate training plus a written exam is average around the US. An Apple Store requires about one hundred sixty hours before you even get to see a customer.
Real estate agents work as independent contractors, which essentially means they cannot be required to do most things regular employees can be required to do. Agents must volunteer. As an example, they attend training sessions voluntarily. They are essentially their own boss. With this said and under these circumstances, agents must perform well at every step in the process – which my experience suggests is unattainable in most cases. My theories are supported with low industry production levels, unusually high turnover rates in the agent population and low grades in independent consumer satisfaction surveys.
Wait! It Gets Tougher
Here is the work an agent typically does (or should do) regularly:
- Find customers by prospecting in a variety of ways
- When they find one, they must learn the customers needs
- Compete with other agents to secure a relationship with the customer
- Show homes and conducting area tours
- Prepare and present listing presentations
- Prepare broker price opinions for potential sellers (BPO)’s
- Stay in touch with potential prospects
- Follow up with the details of pending transactions
- Present offers to purchase to sellers
- Handle counter offers between buyers and seller
- Negotiate on behalf of the parties to reach an agreement
- Counsel customers on financing options
- Work with other service vendors in the transaction such as inspectors
- Hold open houses to generate activity
- Take “floor time” in the office – calls from agents and prospects off yard signs and ads
- Attend a variety of meetings
- Conduct MLS computer searches
Keep up with changes in the community like zoning, improvement projects and more.These tasks require a variety of different and competing skill sets. For example, preparing a BPO requires an analytical mind and sharp reasoning skills while taking a “floor time” call requires a quick wit and strong social skills. Trying to master a wide variety of tasks is difficult for all of us to do. This is the main reason most other industries segment job functions. Multitasking in right brain-left brain activities is one of the reasons a “service lapse” in the real estate process is so likely to occur.
The Work Environment
Now the agent has the license. They learned from the broker what is expected from them. They are now allowed on the street to work. What happens next? For starters, they are paid commissions only when a property sells. Agents fund their own expenses while waiting for their first transaction to close (which could be 3-6 months). Gasoline, business cards, MLS access, real estate board dues, education and more are all out of pocket costs. Other expenses, like yard signs and advertising are often shared expenses with some real estate companies. There is no such thing as vacation pay or health benefits of any kind. In this highly competitive atmosphere fees are often shared with those same competitors, who ironically, are often the best source of business with their in-house sales and listings, co-brokerage and referral fees.
All this is taking place with consumers who may or may not yet know what they want or how they should go about it. Sometimes there are timing issues that prevent or accelerate customers real estate decisions. Some consumers are guarded in sharing their expectations until they feel at ease with an agent. Others consumers are very open, direct and know exactly what they want. Consumers may have unrealistic expectations as to what can be achieved. Work schedules can be difficult to set because the agent must be available whenever it is convenient for their customers.
Real Estate Is A Highly Personal And Complex Transaction
Real estate is closely tied to family, life experiences and represents a large financial commitment. For most consumers, it only happens 2-3 times in an entire lifetime. Consumers become uncomfortable when conflicting information is presented, when perceived pressure or indifference is unknowingly communicated by agents.
Agents also have expectations, but there is often little or no time invested in expressing those expectations. Many agents legitimately feel that sharing their expectations with the customer would create pressure with the customer. Customers and agents can both be terrific, honest, caring and trusting. Both parties can also be non-communicative, uncertain, demanding and, even untruthful.
So for the agent, this can be a frantic, fast paced, and edgy career. For the consumer, the decision on which agent to select should not be taken lightly. The structure of the industry creates an environment where the agent and the consumer are both seeking comfort. They are both determining if they should invest the time in developing a relationship. For both the agent and consumer, time is money. It is no wonder real success in real estate is often so difficult to come by.