By Jack Kazmierski
Special to The Toronto Sun
A bustling economy, low interest rates and a booming housing market have kept real estate agents very busy over the last few years. Perhaps stories of real estate agents raking in hundreds of thousands of dollars per year have aroused your interest in the profession. But what's the life of a real estate salesperson really like?
"I only work seven days a week," admits Sam Moses, v.-p., Norman Hill Realty Inc. "I also believe in only working half days -- any 12-hour period will do."
Moses is only half kidding, but advises anyone interested in a nine-to-five job that real estate is not the place to be looking for a career.
"You could be knocking on someone's door at 9 a.m., and then closing a deal well after midnight the same day. So there's no such thing as set hours."
Real estate agents are always at the beck and call of buyers and sellers. If a buyer wants to do business on a Sunday afternoon, then the agent must be willing to work those odd hours as well.
It's also not an industry where part-timers do very well. Not only do agents have to work whenever their customers require their services, but add to this the fact that simply being in business can cost an average of more than $1,000 a month when you factor in all business-related expenses, like cellphones, gas, advertising, promotion, and more, and it becomes apparent that you have to be dedicated to the job 24/7 just to stay in the black.
But for those willing to commit the necessary time and energy, real estate can be rewarding.
"A type "A" personality -- someone who likes to talk and deal with people will do well in this business. You definitely have to be a good salesperson," Moses says.
"The most successful real estate person is the one who knows the greatest number of people," adds Bill Kindou, broker, Sutton Group Incentive Realty Inc. "These could be people you know from social, religious, sports, or business organizations, and they're the ones who will bring you business."
But launching a full-time career in real estate requires a great deal of planning. "Don't count on any income in your first six months," Moses says. "You have to give it six months to a year, so you better have a bit of a nest egg to live off."
Here's a typical scenario: A new agent starts showing prospects a number of properties. Nothing happens during the first few months, and then finally, a sale. However, the sale isn't completed until another three or four months go by -- that's when the buyers finally move into their new home, and that's when (at last) the agent gets his first commission cheque.
Another obstacle younger agents in particular must overcome is age bias.
"It can be especially tough if you're very young, meaning between 18 to 25 or so," Kindou says. "People have a hard time trusting someone that young with their life savings and their home."
After a salesperson overcomes the challenges of the first year, revenue varies dramatically. "Income depends on the firm you're in, the clientele, your contacts, how hard you work, etc.," Moses says. "We have salespeople making as little as $30,000, and we have those who make over a quarter million."
"Most agents aren't making a great deal of money," Kindou says. "Ten per cent of the agents are making 90% of the money. Our top guy makes over $300,000 per year, others only $20,000 to $30,000, while the average is probably about $50,000."
REAL ESTATE 101|
In Ontario, anyone interested in real estate must graduate from a program offered by the Ontario Real Estate Association (see www.orea.com/le). The curriculum is divided into a three-phase program. Candidates are given 18 months to get through the program, but some complete in as little as six months.
Phase 1 ($380) is offered on a home-study basis only. Phase 2 ($420) is offered on a home-study basis or in a classroom environment. Phase 3 ($620) can be completed entirely in class, or the first part can be completed at home, while the second part must be completed in the classroom.
After completing the third phase, candidates are able to register with The Real Estate Council of Ontario ($250 for a two-year period plus $151 a year for insurance), which allows them to begin working in the industry (see www.reco.on.ca). However, they must be working for a broker at this point.
Next, candidates enter a two-year articling phase, during which they must take another three courses. After this two-year period, they finally receive their permanent licence.
In order to keep up-to-date with the industry and changing laws, all real estate agents must continue their education, even after receiving a permanent license. Every two years, a total of 24 credits must be earned, just to stay in the business.
Fresh out of real estate school (see sidebar), a salesperson must work under a broker who runs the business. Some brokers charge the salesperson a desk fee (average $1,000 per month), allowing the salesperson to keep most (some brokers keep another 5% to 10%) of the commission.
Other brokers provide the salesperson with a desk and advertising for free, while keeping a larger percentage of the commission cheque (between 50% and 70%).
Sutton Group, on the other hand, runs its brokerage differently. Salespeople pay a flat fee of $275 per month and only $315 per sale. So instead of giving a broker 50% to 70% of a $10,000 commission, for example, Sutton Group only gets a standard $315 fee.
With such an outstanding agreement in place, we asked Kindou why all real estate salespeople don't work with Sutton Group.
"Salespeople believe that the brokerages with the big names are bringing them more business. But once these salespeople realize that customers are more interested in the individual salesperson, and not in the name of the broker, they come over to Sutton. Most of the agents that come to Sutton Group have been in the business for a while and realize that they, as individuals, are attracting business, not their broker. They come to us realizing that they can make more money here."
"It's a rewarding career, and you can make a good living provided you're willing to work hard and you like people," Moses says. "It should always be a pleasure for you to serve your client."
(Jack Kazmierski (firstname.lastname@example.org)
is a Toronto-based freelance writer and editor.)
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