by Wendy McPherson
At last count, there were 327,341 licensed agents in the State of California. Half are probably inactive — a quarter of them are part timers — of those that are left, half make a decent living at it. All of this is supposition on my part but, I bet I am pretty close to accurate.
In our immediate area, the statistics are much rosier than the above. We are blessed with very healthy prices and the competition among agents is fierce, thereby creating a perfect Darwinian landscape. Only the best generally survive for any substantial length of time.
After hiring and firing dozens of agents over the years and observing the traits that make success and failure in this business, it is obvious that this is a business not for the faint of heart. Some words that come to mind that are absolutely necessary in this business: self-starter, confident, creative, determined, compelling work ethic.
Unfortunately, the barriers to entry in this business are very low. A trained chimp could pass the State Real Estate exam. It is what happens after that that determines whether you will be wildly successful or struggle to stay in the business — and it is an expensive business to be in. Costs are ongoing and include Errors and Omission insurance, MLS and Board of Realtor fees, lockbox fees and advertising costs (on some large listings agents spend upwards of $15,000 per listing — with no guarantee that they will ever get paid) to name some of them. Many top agents must employ clerical help for assistance once in awhile (or full time) and when you go out of town, you will have to pay someone to cover for you. No paid vacations here. Remember too, you are paid as an independent contractor (1099) so a number of tax burdens are left to you personally as opposed to being an employee and being paid on a W-2.
Some other issues that should be top of mind when considering the business is what can be a very long learning curve — read no income — for a long time. You need to have pretty strong financial legs to deal with a possible six months to a year with no income to speak of. That is a long dry period for most people.
Also, the business end of the business is just that: very serious business. You are dealing in assets that are most times your client's single biggest asset and it needs to be treated with gravity and conscientiousness. Every document that is associated with the transaction needs to be read and read carefully by you: You are the person the client is relying on. You are the client's fiduciary. This is a weighty burden and takes skill, intelligence and experience to understand. This is not a business for a dilettante.
Now the good parts of the business! The business is never dull. Repetition is not even in our lexicon. There is a great satisfaction in finding people the right house, and you meet an enormous number of people of all walks of life. Good agents become a part of the fabric of the community. The only capitation on your earning power is the number of hours a week you are willing to work.
Many years ago when I became a Realtor (the word "many" should be in all caps, actually), I was simply following in a business that my father dabbled in. It has been an extremely rewarding career and one in which anyone can excel given the right guidance and willingness to dedicate yourself to it.
There will be that Friday night dinner for eight you have been planning for four weeks when your big client calls to say he is in town and has to see a house on Friday night. Yes, one more thing about the business — it is pretty much 24/7!