Real Estate Agent FAQs
1. What are the fees I encounter as a real estate agent?
The base fees required of all real estate agents are the fees to the real
estate commission.170 to get the license and --- every 4 years for renewal. 91
to take the state test.the rest is up to the individual brokerage. in bob wood realty's
case. the fees are 254.50 to NAMAR, the local board of realtors. and
$22 per month for MLS and internet access. Things to look out for
are E&O insurance, monthly fees, franchise fees, desk fees, phone fees,
sign fees, lockbox fees, computer fees, broker call fees, yearly contracts, transaction
fees, copy fees.
2. How hard is selling real estate?
The comparison of Atlanta real estate and Atlanta rush
hour traffic. They both have hundreds of thousands of people trying to get to
the same goal . . .the gold. Fortunately, in the midst of people
cutting you off, taking shortcuts (and illegal ones, at that), saying a few
unkind, select words to you, and giving you a few obscene gestures along the
way, there are a few kind, steady paced souls that aren't concerned with how
fast you can get there at whatever cost or getting rich quick no matter who
they step on in the process. Some will get their client, show them
homes, have a happy customer that never thought they could get a home of their
dreams, and you are the one that made it happen . . . the bonus for this type
person, you got paid in the process.
3. How do commissions work?
This is hard to explain in a paragraph, but here's an attempt at a
scaled down version. Say John Smith lists his home for 7% total
commission. Generally, this commission will be 3.5% to the listing
agent and 3.5% to the selling agent. When a closing occurs, if you
are the selling agent, your brokerage office receives a check for 3.5% of the
sales price. Your broker will then cut the agent a check for their portion
of the commission earned based upon the agent’s commission split with your broker.
4. Why is training so important once I get my real estate license?
Once you are licensed, an excellent training program will teach you the
most efficient ways to make the most of every minute. Every minute
spent on ineffective techniques at getting business is time wasted. An
excellent training program will point you in the right direction and on the
path to success in your new career. You might can learn the industry
without training on your own, but if you can get paid one month earlier, if you
can get one extra deal that year, if you stay out of trouble and stay legal,
and if you know what to do and when to do it so your deal doesn't fall apart,
every minute spent in training is priceless. Considering that the
average commission is over $5000 per deal, wouldn’t you be best served getting
the training you need to get your business started. The real estate
industry is overwhelmed with agents; however, many of those agents will end up
letting their license lapse because they either chose not to do the things to
become successful or they never had the opportunity to learn the things they
needed to know to become successful. A high commission split does
not mean anything unless you have closings. 100% of nothing is
nothing; 70% of twelve closings in a year at $5000 is $42,000 - not a bad start
in a new industry!
5. Do you recommend going full-time or part time into real estate?
Either. It depends on how you like the career, how well it is
working out for you, and how much money you have saved for your transition
period. Most agents start out part-time, slowly increasing their
business and income until they no longer need or rely on their other income
from their other job. Be sure to check the option of being part-time
at brokerage offices. Many offices have production requirements of
their agents, have different commission splits depending on whether you are
full or part-time, or simply do not allow agents to be anything but full-time
if they are licensed with their brokerage office.
6. How much can I make in real estate?
As much or as little as you work at it. Real estate takes
constant long hours to make the "big bucks". If you are
looking to work leisurely, you will receive leisurely pay; just like any other
job. If you work 40 hours a week with your current employer, you
will receive a paycheck reflecting 40 hours of work; if you work 10 hours a
week with your current employer, you will receive a paycheck reflecting 10
hours of work. Real estate is no different. You get out
of it what you put into it. It's all up to you!
7. What are the pitfalls of becoming a real estate agent?
Being self-employed in any industry has its rewards and drawbacks. Unfortunately,
or fortunately depending on how you look at it, real estate agents usually work
the hardest when everyone else is off work. This means you may be
showing properties on Labor Day when everyone else is at the lake; however, you
can go to the lake during the week after Labor Day when the lake is not as busy
and everyone else is back at work. Again, it is all in how you look
at it. As an independent contractor, you can work as much or as
little as you choose. Not having a clock to punch can be rewarding;
however, many find the transition into monitoring ones own time and becoming
self-motivating on those cold, rainy mornings rather difficult.
8. What are the rewards of becoming a real estate agent?
Being self-employed in any industry has its rewards and drawbacks. The
rewards of managing one’s own time, choosing one’s clients, deciding when and
how to promote one’s own business is both challenging and fulfilling. The
sky is the limit in real estate. The Atlanta market provides an
unlimited demand for your services. If an agent is willing to invest
the time necessary to cultivate their business, they will realize the
self-satisfaction of helping thousands of families find their dream home while
earning a nice nest egg, themselves, in the process.
9. Why are there so many real estate brokerages?
The State of Georgia used to require five years as an active
salesperson to be eligible for broker status; the State now only requires three
years. Many investors have entered the brokerage industry as an
investment. They are not in the industry as a traditional broker,
rather they are licensed as a broker to be eligible to hold the licenses of
salespeople and collect fees from them. The concentration of these
brokers is on monthly fees, not commission percentages. When a
broker concentrates on collecting monthly fees, rather than being tied
financially into every transaction by splitting the commission with you
(meaning the broker does not get paid, unless you get paid), many brokers
unfortunately choose to become investor brokers, rather than the traditional
function of the broker as originally set out by the Georgia Real Estate
10. Why are real estate brokerages necessary?
Someone has to take responsibility for the professional reputation of
consumers. The broker is the first line of defense at inadequate or
improper client representation. The broker should be knowledgeable
of the limits of agents at different stages of their career and put adequate
measures in place to train and supervise both experienced and inexperienced
agents. Even the most experienced agent will take something away
with them from a training class. With the fast paced changes
occurring in the industry and the prevalence of mortgage fraud in the Atlanta market,
the broker is charged with supervising the activities of its licensees and
stepping in when necessary to ensure that the consumer is protected against
unethical, unprofessional, and illegal practices in the industry.
11. What do real estate brokerages do for you?
It depends on the brokerage. At one end of the spectrum, the
brokerage office merely supplies their name as your broker; there might not
even be an official office for the brokerage, choosing to use the broker’s
residence address for the brokerage address. At the other end of the
spectrum, the brokerage office supplies you with training, administrative
support, an office with desk space and meeting rooms, copies, flyer generation
and production, signs, lockboxes, and virtually everything you need to be an
agent. Whether you pay for what you need whether you have a closing
or not or whether your broker pays for everything and keeps a percentage of
your closing when (and if) you have one, is up to you. There is a
brokerage model to fit every agent!
If you have additional questions, give me a call at