|Fall Real Estate 2006
Publication Date: Friday, October 13, 2006
So you want to be a real estate agent?
by Sue Dremann
In their former lives, they were a ballerina, a lawyer and a dot-bomb refugee. The Bay Area's hot real estate market seems like a good prospect for people looking to break into a new career, but professionals who have switched to real estate careers say it's not a slam-dunk.
Working nights and weekends, real estate agents shell out thousands of dollars in out-of-pocket expenses for advertising and desk space. They can spend months -- or even a year -- without making a sale, they said.
But these new real estate professionals say they love their new vocation. It's a people-oriented business, where open houses can become gala events, with latte carts and catered food. Every day brings something new; every home is different, and so are the clients.
"I'm so much happier than when I was doing law. You can get very entwined with people in real estate," said Ken DeLeon, a former attorney with Wilson, Sonsini, Goodrich and Rosati in Palo Alto.
DeLeon switched to real estate in 2002 after buying and selling several homes in the area for a number of years. He wanted to combine his love of houses with his expertise in law, he said. He now works as a broker with Keller Williams Realty, Palo Alto.
The market's high prices and the area's well-educated clientele demand a highly educated agent, conversant in statistics, trends, marketing and analysis, he said.
"There are so many Realtors. You have to set yourself apart. The more recent entries now are more educated. The profession is rapidly changing. Many have advanced degrees, such as MBAs," he said.
DeLeon has a mathematical and economics background and his law experience provide him with the analytical tools his clients expect and need, he said. He combines a broad knowledge-base with the personal touch: an outgoing personality and flairs such as a latte cart and catering at home openings. And he advertises incessantly, placing full-page ads in seven local newspapers, he said.
The stakes are high: In the last four years, DeLeon estimates he has sold more than $100 million in homes.
Tim Foy turned to real estate after leaving behind a successful career in high tech. Foy joined Midtown Realty, Palo Alto, his father Tom's business, in 2002. Tim had sold real estate while in college. After 12 years in high-tech, he grew tired of being cooped up. A self-described "people person," real estate offered him a chance to mingle and fulfill a childhood dream.
"I'd wanted to have my own business since I was a kid. I really wanted the independence of working for myself," he said.
Becoming a real estate agent is easy, but becoming a good Realtor is very difficult, Foy said.
"You need to understand the technical, contractual and market knowledge: why one street sells more homes than another or why one floor plan is more desirable.
"It's knowing your market: the home values, how the value is different in parts of the city; what the trends are in the neighborhood. It never stops.
"At the end of the day, you are selling your knowledge of the market. ... If you don't know the inventory -- if you haven't looked at the listings for three weeks, you're lost," he said.
And, "listen, listen, listen," Foy added.
When preparing a home for sale, Foy gives the seller price estimates for improvements, then gets bids and manages the work.
He is a firm believer in first impressions, he said.
"By the time they open the door, everything (prospective buyers) do is to confirm the data," he said.
There are no prerequisites to becoming a real estate agent, according to David Fastenau, director of marketing for University of California Cooperative Extension, Santa Cruz, which offers a real estate certificate program at its Sunnyvale and Cupertino campuses.
The program focuses on career-changers.
Nine required courses, including property management, real estate investment, accounting, business law, sales and marketing and preparing a home for market appeal, take up to 500 hours, he said. Courses average $400 to $500 each.
Jennifer Buenrostro, an agent with Alain Pinel Realty, Palo Alto, became a Realtor in February after a stint as a stay-at-home mom.
A former ballerina with the San Jose/Cleveland Ballet, Buenrostro has a degree in economics from Stanford University. She worked with accounting firm Coopers & Lybrand and E*Trade, where she was a project manager in Web design, and then managed E*Trade's Intranet. She turned to real estate through the encouragement of her mother, a Realtor for 18 years.
Getting started can be costly -- upwards of $20,000.
In addition to classes, California Department of Real Estate Exam and licensing fee, Buenrostro paid $1,500 to become a member of the Silicon Valley Association of Realtors (SILVAR), which allows access to the Multiple Listing Service, the source for agents to list homes and find them.
Agents work as independent contractors, paying approximately $3,000 for desk fees and Errors and Omissions insurance per year within a real estate broker's office. Intensive sales seminars cost up to $1,000; and personal promotion can cost $5,000 to $10,000 per year. It can cost an average of $3,000 to $5,000 for the various forms of marketing a home, she said.
Making that first sale can take six months to a year, so new agents should have a nest egg set aside to live on, she added.
After a sale, the average 6 percent commission the seller pays is split between the listing agent and the agent who brought in the buyer. An agent shares a percentage with the broker. As an independent contractor, an agent is responsible for his or her own taxes and needs to set funds aside for that purpose. The agent recoups advertising and other costs from what remains, she said.
A good agent puts clients first, she said. Agents often work on weekends and evenings, when clients are not working. But clients are part of the appeal.
"Every transaction is different. You become entwined in people's lives. It's lovely to get to know people this way and help them with this very important decision in their lives," she said.
Staff Writer Sue Dremann can be e-mailed at email@example.com.