What I Wish I Knew Before Entering the Real Estate Industry
As a seasoned realtor, I've learned many valuable lessons over the years, but some of them could have saved me a lot of heartache and frustration had I known them earlier. In this article, I share some of the things that, if known before embarking on this journey, could have made my experience much smoother and more rewarding.
The True Nature of Neighborhoods
Before you decide to purchase a property, it's essential to spend some time observing the area during off-peak times. Often, what looks appealing during the day or on advertisements might not reflect the true daily life of the neighborhood. For instance, I never would have bought a condo in what was labeled "The Hood" in North Las Vegas, near Cheyenne Ave across from CSN-College of Southern Nevada, had I seen it at night and on weekends as your future neighbors do. This experience teaches us that understanding the true character of a neighborhood is crucial.
The Realities of Compensation and Expenses
The commission rate is around 2% for the first two years, which might seem enticing. However, this rate is actually quite misleading. During these initial years, you'll likely earn less than the minimum wage. This is because new realtors have significant expenses, including your own training, malpractice insurance, and the NAR pin, which can cost about $1,500 per year at a minimum. Additionally, you'll be required to pay for certification and continuing education, further eating into your earnings.
The financial realities only get more challenging as you learn that over 80% of real estate agents quit within the first two years. This high turnover rate can be discouraging but also serves as a stark reminder of the intensity of the profession. Furthermore, the broker you work for takes a significant cut of your earnings, leaving you with less than you'd expect. The only consolation is that your customers often call you at 2 AM, indicating that you are on call 24/7. Despite all this, you'll be blamed for anything that goes wrong, and malpractice insurance is a necessity, not an option.
Career Dynamics and Trust
Your career as a realtor involves a lot of hard work with little reward at times. The broker you work for takes most of the money, and to make matters worse, you're expected to do all the work. Additionally, you'll often have to deal with ridiculous requests from clients, which can be both stressful and frustrating. Female realtors often find themselves alone with strange men for extended periods, and it can be scary. It's crucial to maintain a level of vigilance and not fully trust another agent, as they may try to poach your commission.
Networking is Key in the Real Estate Industry
One major rule in real estate, and any sales, is to maintain an ongoing relationship with everyone you meet. This includes databases of potential buyers, sellers, and other professionals in the industry. The importance of staying in touch cannot be overstated.
Geographical Fit and Market Adaptation
At the beginning, I wish I had understood that concepts and market dynamics can be specific to geographical regions. I was a highly motivated individual, but I unsuccessfully tried to achieve my goals in a small, dying town. Relocating to South Florida proved to be a better fit for me and allowed me to better understand the local market and adapt my strategies accordingly.
When it comes to investing in real estate, early exposure to the potential is critical. I realized during my education that real estate investments are often a solid choice. Even though it's crucial to acknowledge that real estate investments carry risks and may not always appreciate in value, the long-term benefits often outweigh the risks. Always stay informed about market trends and be willing to adapt your strategies based on the environment you're in.