Thursday, June 11, 2015

So You Think You Want To Be a Realtor?





The #market turned around and we instantly saw a huge spike in the number of people acquiring their real estate licenses. Many old #agents are coming out of retirement. Many new agents are rushing to get their license with the hopes of coming onto our side of the market and making a million dollars a year. Many others are considering following that crowd and getting their own real estate license.

Before you run out and join the crowd, here is what you need to know. I am not a negative person. I LOVE what I do. Becoming a licensed real estate salesperson is one of the best moves I’ve ever made. Becoming a full time #Realtor has proven to be the smartest thing I’ve ever done. BUT, I didn’t go full time when the market was hot and everyone was making #money hand-over-fist (supposedly). I went full time when our country went through one of the worst market crashes ever. I went full time during the bubble burst. I went in when everyone else was running the other way. So guess what; I went into the market when there were agents dropping like flies, and the true professional #Realtors were the only ones staying in the game.

What should you know about becoming an #agent? First you should identify the motivating factors or expectations and compare them to the experience of others. Most people come into our professional field with two huge expectations: 1. I can make a lot of #money (potential income); 2. I can make my own schedule (#independence). These are the real benefits of being an independent contractor (all licensed real estate salespersons in #NY State fall into the tax category of 1099 independent contractors). Just don’t expect the potential income and independence to come without a price. You will be paying nearly every business related expense out of your own pocket. Many of these expenses are due before you collect your first commissions check.

According to Realtor.com, the average agent spends about $5,000 out of pocket each year. I didn’t get into this business to be average. I know that my expenses are much higher than that. Any top producer will tell you that the expenses of being a top producing agent are much higher than $5,000 a year. But let’s look at what the average agent will be spending that $5,000 on. Below is a list of the most common expenses an average real estate salesperson incurs.

Real Estate Salesperson Expense #1: Pre-Licensing Education & Fees
Sure, this is one of the fastest professional licenses to obtain. The real estate pre-licensing education hour requirement differs from state to state. For example, in California you have to take 45 hours of real estate pre-licensing education before you qualify to take the state exam. In Florida it is 63 hours. Here in New York it is 75 hours. In Colorado it is 168 hours. As you can see from this brief example, the requirements change from state to state. The prices for these courses vary from state to state, and will vary if you take the course online or go to an actual school. In NY I’ve seen it as low as $99 and as high as $599.

When you have completed your real estate pre-licensing courses, you will then qualify to take the State Licensing Exam. There is an additional cost for that, and this cost varies from state to state. I believe it is now $70 in NY. There may be other expenses associated with the exam such as fingerprinting, background check, etc. Keep in mind that the numbers I’m giving you are subject to change. I’m giving you the prices as of June of 2015. This is not a one-time deal. In NY, you have to renew your license every 2 years, and this can only be done after you complete a real estate continuing education course which in most offices comes out of your pocket. The number of hours of continuing education required will also vary by state.

If you think you have learned everything you need to know after you’ve taken the pre-licensing course, you are wrong. Many Realtors, including myself, will invest in additional education, coaching, seminars, training courses, etc. I invest an average of $2,000 a year in additional learning materials and courses because I want to stay one step ahead of my competitors.

Here is a basic breakdown of expenses associated with real estate licensing and education:
  • Real Estate Pre-Licensing Courses – $99 to $599.
  • Real Estate State Licensing Exam – $70 to $150
  • Real Estate License Fee: $45 to $100
  • Real Estate Calculator – $10 to $100 (You can't use your cell phone as a calculator at testing sites)
  • FBI Background Check – $75 to $100
  • Fingerprinting: $50 to $100
  • Continuing Education: $99 - $250
  • Additional Education and Training: $500 - $2000 per year
Real Estate Salesperson Expense #2: Advertising
I make it a habit of spending 10% of what I make on advertising. I don’t recommend that for everyone because if you do not know what you are doing, you will simply be throwing your money away. There are ways to advertise for free (social media, blogs, trade publications, photos, public appearances as a professional on news networks, local classifieds, YouTube videos, word of mouth, referrals, #networking events, etc.). Still, if you don’t want to just be average, you will have to plan on making advertising one of your larger expenses. Some people will tell you that you should be very conservative when you start out. I recommend that you take your first commission check, all of it and approach your office’s top producer for advice on how to spend it in advertising. That sounds scary, doesn’t it? I recommend this because most agents will take that first commission check and spend it faster than the time it takes to make a cup of coffee (the nectar of the real estate gods). I’ve seen young agents sell their first property and go lease a #luxury car (no exaggeration). I say the better thing to do is to spend it on yourself, especially since in the beginning you are simply trying to build a customer base. I don’t recommend my level of advertising spending for everyone. What I do recommend is that all new agents sit with a seasoned real estate sales professional, manager or broker and work on coming up with a well planned, realistic, sustainable advertising plan, business plan and a clear budget. The sad truth is that most of the newly licensed real estate agents quit before the 1 year mark, and I believe for many of them, this happened because no one with more experience sat down to help them figure out the intricacies of this business.

Below are some examples of potential advertising expenses:
  • Real Estate Website: $100-$500/month (complimentary if you are with Coldwell Banker)
  • Print Advertising: $100-$500/month (includes yard signs, mailers, newspapers)
  • Business cards: $500-$1500/year (depends on how busy you are and the quality of the cards)
  • Online Advertising: $50-$500/month (includes pay per click, internet lead generation, social media pay ads, premium placements on real estate sites)
  • Industry publications: $500-$1500/yr (although these are optional, I get at least 3 good leads a yr)
Real Estate Agent Expenses #3: Professional Organizations
Real estate professionals can choose to work in an office that is part of the MLS (Multiple Listing Service), or not. Some independent offices have opted out of the MLS, primarily those that focus most of their business on rentals. For those that choose to be a part of the MLS, the cost per agent varies per state, per city and per location or organization. Our office is part of LIBOR and Multiple Listing Service of Long Island (MLSLI). These cover two of our three major areas of concentration (Brooklyn and Queens). Our agents have the option of joining other similar organizations to cover our Manhattan business. These organizations carry dues, and the agents are responsible for covering their own dues. MLS dues vary depending on location and size of the organization. These dues can be fairly affordable at one location and very expensive in another:
  • MLS dues can be as affordable as $99/year and as much as $600/year (these amounts are subject to change at the discretion of the organization.
Real Estate Agent Expenses #4: Public or Private Transportation
Does the number $3.8 billion sound like a lot? That’s the estimated number of collective miles real estate professionals add to their vehicle odometer each year. While we are starting to see more Hybrid vehicles pop up, for the most part our vehicles still run on gas. While gas prices do fluctuate (they are fairly low right now on June 2015), they don’t tend to become so affordable that we don’t feel the cost of filling up the tank. I make it a rule to carefully qualify my clients because I take them out to see houses. I went into the real estate business to sell houses and help clients find the perfect home to suit their needs. The last thing I expected was to become a taxi driver, delivery boy, tour guide or shuttle driver. I still get caught off guard when a client demands that I drive him/her to and from listings, and that client expects me to scoop them up from their current home and drop them off there afterwards. You may think this is farfetched. Well, it isn’t. As a matter of fact, I had a client that wanted to move to Brooklyn from Bellport, Long Island. She expected me or one of my associates to pick her up from her home in Bellport (1 hour & 20 minutes away), and take her back home after showing her my listings. That was the last time I drove to the office. I would rather ride a motorcycle or cab it. I tell my clients I do not drive and ask them to meet me at the home we are viewing. It works wonders on my stress level. Driving for work can be very expensive. Here’s where the expenses come from:
  • Auto Insurance: $1,000-$4,000/year (depends on many variables related to the car & driver)
  • Gas & Maintenance: An average of $0.28/mile for economy cars and $0.39/mile for #luxury vehicles
  • Parking: If you have ever conducted business in Manhattan, or even in some sections of Brooklyn and Queens, you know that parking can be a nightmare. Many of us simply pay for parking when out on an appointment. This can get expensive. $0.25/minute to $45 for a couple of hours in NYC! 
  • Parking tickets: OH BOY! I am sure you are an excellent driver and you are very careful about where you park. Still, here in #NYC we have a crew of very busy city employees known as NYPD Traffic Enforcement Agents. These guys will ticket you if you sneeze the wrong way. While their department is a vital part of our city’s functioning infrastructure, they are still some of the most hated people in our city. I usually try not to argue with them by reminding myself that they are doing their job. But I will tell you that I’ve been guilty of losing my cool when a traffic enforcement agent tickets me because I’ve gone a few second past the meter ticket’s expiration time. It makes me even crazier when the ticket is issued because my client was late to an appointment or took too long during an appointment. Probably my least favorite business expense!
Before I leave you, I want to assure you that I truly hope this hasn’t discouraged you. I will tell you that I would not trade my real estate career for anything in the world. I left a lucrative JOB for this career and I have no regrets. I’ve been successful. It’s been a great ride, and it’s just getting started. I am blessed to be a part of a great office (Coldwell Banker Kueber) and a great franchise (Coldwell Banker). I am truly blessed to work with the best office in our entire sector, and live roughly 1,000 feet away. My morning commute is as simple as it gets (walk for 3 minutes max). I can work as late as I want because my shower and bed are only 3 minutes away from my office.

For those that decide to go for it, the best advice I can give you is to make sure you choose to work in a town that you absolutely love. You cannot be successful selling something you hate. You have already secured your failure if you do. I service the GREATEST city in the world, my New York City. I am in a serious love affair with my great city, and I get to share that love affair with others in a very personal and professional manner. I get to help others develop their own love affair with my favorite place in the world. You have to love New York to make it here. I love New York and I am definitely making it here. I’m not alone in my sentiments.
  • “If I can make it there, I’ll make it anywhere.” – Frank Sinatra 
  • “Make your mark in New York and you are a made man.” – Mark Twain 
  • “For me, New York is comfortable, not strange.” – Karl Lagerfeld 
  • “The glamour of it all! New York! America!” – Charlie Chaplin 
  • “I get out of the taxi and it’s probably the only city which in reality looks better than on the postcards, New York.” – Milos Forman 
  • “When I’m in New York, I just want to walk down the street and feel this thing, like I’m in a movie.” – Ryan Adams 
  • “New York was his town, and it always would be.” 
  • “The true New Yorker secretly believes that people living anywhere else have to be, in some sense, kidding.” – John Updike 
  • “One belongs to New York instantly; one belongs to it as much in five minutes as in five years.” – Tom Wolfe 
  • “People go to LA to ‘find themselves’, they come to New York to become someone new.” – Lindsey Kelk 
  • “If London is a watercolor, New York is an oil painting.” – Peter Shaffer 
  • “When you leave New York you ain’t going anywhere.” – Jimmy Breslin 
  • “Skyscraper National Park” – Kurt Vonnegut 
  • “There is something in the New York air that makes sleep useless.” – Simone de Beauvior 
MY FAVORITE:
“I go to Paris, I go to London, I go to Rome, and I always say, “There’s no place like New York. It’s the most exciting city in the world now. That’s the way it is. That’s it.” – Robert De Niro

AND MY OWN:
"My soul relaxes in my Puerto Rico. My mind wonders in Tina's Greece. But my heart skips a beat, my eyes tear and my smile is ear to ear the moment I return to my New York." - George L. Rosario, Google My Name, "George L. Rosario"


------- 
George L. Rosario
NYC's Hometown Realtor
Coldwell Banker Kueber
DESK: 347-671-SOLD
CELL: 917-945-4211


Follow Me Online Here: 

Coldwell Banker: http://www.CBBigApple.com 




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Location: 200 West 56th Street, New York, NY 10019, USA
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