By Tina Plett

People have this idea that being a real estate agent is a high-paying endeavour. After all, the four to seven per cent an agent might charge on a 250K property is a quick $10,000-$17,500, so why not? At that rate, a person need only sell five houses a year to make a nice living. It sounds easy and profitable.

But that kind of monkey math gets a lot of people in trouble.

By forgetting to count the cost, they become either unprepared real estate agents or clients who think agents should work for free. Allow me to debunk that a bit by telling you about my first year in the business.



I had taken all the courses, had outlined my goals for year one, and was ready to begin my first year in real estate. From my first day on May 1 to the last day of December that year, guess how much I made?

I’ll tell you my expenses were $22,000 for that half year. From what, you ask? Licensing, office fees and supplies, MLS fees, advertising, fuel for the thousands of miles I drove, and the list goes on. These expenses were deducted from my income. Which was zero. In my first year I sold absolutely nothing. By the end of year one, I was in the hole $22,000. Not exactly the fast track to riches.

What kept me going when all seemed lost?

The reason I got into real estate was to help people. I did not get into real estate to get rich. I wasn’t in it to burn piles of money either – I did mean to make an income. But because money was not my primary goal, I was not deterred by the lack of it. Neither was I “just trying it out” as many do. I wanted so badly to help people find a home, I would have done it for free. And I did. Maybe that sounds crazy, but it’s really what I’m passionate about. It’s my favourite part of this job and worth every frustration.

What we love, we are willing to do, even in the face of opposition or great cost.

If you’re new to the real estate game and it feels like it costs $40 to make a dollar, I understand.

If it feels like talking to a brick when trying to wheel and deal with the old pros, or you question your sanity for having chosen this job, I want to encourage you with this.

Pursue your passion. Chase what you love.

If you do that, all the confusion and hardships and tough times won’t matter as much, because you’ll be pursuing your passion and that will propel you forward.

What challenges do you face as a real estate agent?

What is the passion that drives you forward during tough times?

Attentive From Sign Up Till Sign Down, rural agent Tina Plett wins the affections of people near Steinbach, MB. with her unique blend of forward-thinking business savvy and down-home, countrified lifestyle. Sutton Group-Kilkenny proudly calls her their own. Visit her website

  • RossK

    I was remiss in not acknowledging someone for her contribution in my first year in real estate…actually my very first deal. REM is the only place such acknowledgements could be read by other agents, so now this post.

    Ann Steele carried the first listing I ever brought an offer on (my 2nd “Frebreeze” week in the business) and while at that time both registrants involved in the transaction were Agents of the Seller with buyers only legally allowed customer service, Ann handled this newbie (me) with kit gloves.
    Ann was never a push over earning her strips in a business dominated by men. Successful women were often criticized then for being too aggressive or too firm or too “manly” in their dealings. Ann clearly would never let any male agent take advantage of her or her clients, willing to be the “bad gal” when needed.

    Ann acted more like an Aunt to me that night. Treated me with respect. Allowed me some freedom to develop my craft. Never once addressed my innocence at the offer table.

    I wish all new registrants were treated with this respect and shown this mentoring practice!

  • Joanna Makowicz

    Like most newbies dreaming of entering the RE business (for the right reasons) I keep optimistic but cautious and hopeful but realistic. I am alos pretty nervous about my choice of enetring this professional path..
    At this ti me I have one more course/exam left to pass and…Exactly, and what next?

    I don’t have access to an unending sources of cash to burn paying “the system” all the initial costs and/or working myself to the ground with no chance of an income in the first year…
    I can’t afford to drive myself into personal financial ruin by trying to do what I love, which is selling….
    I don’t have a full rolodesk for I am a newcomer to the area myself.
    Thus, counting on such an enormous pool of talented and successful professionals as i see on REM,can I please challenge you and ask to reach out to share some of your wisdom as for the “do’s and don’ts ” for a would-be sales representatives like myself?
    NB. I am NOT expecting to make an unrealistic income. All I would like is to earn a decent living by dedicating myself to what I love doing and am good at too.

    Thank you kindly,

    Joanna

    • Alan M.

      Joanna,

      A long time ago, I told a local veteran real estate, lady, agent that I was thinking about getting into the real estate business. Her advice to me was: “you better make sure that you have the contacts.” Needless to say she knew what she was talking about, but back then it was the old reality too, brokerages weren’t luring seller’s with grandiose promises or dreams of big savings etc., etc., — the high volume (full service but less time) brokerage concept hadn’t seen the light of day, yet.

      If you don’t have lots of contacts, you should watch some of Bruce Keith’s videos, to get a sense of what’s involved with raw sales and hardcore prospecting. Bruce’s videos will give you a sense of what has gone on in this business, in terms of what was required to generate numbers and keep generating numbers. Some of the newer brokerage models are designed to eliminate the need for prospecting through the suggestion of consumer “SAVINGS” but when everyone starts doing the same thing, hard-core prospecting may become fashionable again. If you get the sense from watching Bruce’s videos that this business has been more about prospecting than about service, you’ve probably watched just the right amount.

      The bottom line is, if you don’t have a large sphere of influence or if you’re uncomfortable walking up to a strangers door and knocking on it, to give your pitch, and another and another, you should bail now and save your money. You’re about to come into a business that many don’t understand (inside and out) but consumer’s tend to be attracted to the veteran agents — literally, like a moth to a flame, in many cases!

      • Joanna Makowicz

        Alan,

        Thank you very kindly for your reply.
        It is exactly because I don’t know the in’s and out’s of this particular business that I am seeking to learn more….as a matter of fact I am seeking to learn as much as I possibly can. I find Mr. Keith’s
        lectures to be very helpfull as well.

        Thanks again.

        Joanna

        • Alan M.

          Joanna,
          If you do find Bruce Keith’s lectures helpful, you may indeed have the makings of a star! I don’t think it’s so much about what he says, or how he says it, I think it’s actually about what he does with his hands.

    • Brian Martindale

      Joanna:
      You say that you want to do what you love doing…selling. If that is true, then you should not be pursuing a career in real estate, in my opinion. Here is why I say that.
      A person who wants to sell for a living is a person who wants to influence another to his/her way of thinking in order to make a sale in order to collect a sales commission. Selling is all about influence. The only time a Realtor should be in selling mode is when he/she is trying to influence a consumer to deal with him/her. Once that endeavour has been accomplished, all selling should stop and said Realtor should shift gears into an advocate mode. One, therefore, had better be able to live up to one’s own billing. A Realtor should then be doing only one thing, and that one thing is working for the best fiduciary interests of his/her client. All thoughts of commission-collecting (especially within a pre-defined time frame) should be banned from one’s conscience. If you can do this, you can become a successful Realtor, and by “successful” I mean a true-to-yourself, honest, hard-working, effective representative of your clients’ interests. The money will come ‘if’ you remain true to the demands of this straight-and-narrow road of ethical and competent behaviour, no matter how bare the cupboard of financial desperation might be at any given time. You will either survive the lean start-up times or you will not. If not, you will have given it an honest try. If you do survive, and ultimately flourish, you will be able to look back and say that you did it the right way, and you will not have established ‘iffy’ (read sleazy) ways and means of influencing people to do what you want them to do for the sake of collecting commissions. You will become a professional Realtor, and you will be in the minority.
      One must have a deeply-rooted belief that he/she can be an expert advisor to one’s clients. One must be truly confident in one’s ability to guide one’s clients toward a satisfactory transaction, for them, and not just be an arrogant talking head racking up sales numbers for the sake of showing the world how successful one is. One, therefore, must have more than a modicum of psychological knowledge.
      One also must have enough funds to sustain one’s self for up to a minimum of six months (ideally one year) as I had when I first came into the business in 1980. That will take the pressure to “perform” off of one’s mind. The only thing that one should have on his/her mind is serving the public interest. That mindset should shine through one’s persona loud and clear, but by constantly trying to one-up everyone else in the field by bragging about one’s ability to best everyone else in order to secure clients will only serve to turn one into another sales person amongst the plethora of talking head generic money-hungry mouth pieces.
      If you truly want to become a real live professional Realtor, forget about becoming a sales person…again…and focus on becoming a missionary, with your mission in life to become the best representational advocate for your clients’ interests (those who choose you) that you can possibly become. Forget about money for awhile, and if you succeed in this business or not, you will be a better person for it.
      I am sure, by the tone of your request, that you will find your calling, and how much it pays will be of secondary importance.
      Hint: You will have up to one year after receiving your license to implement that license. If you are currently short of funds, keep your job, or if you do not have one, get one, and save your money, all the while letting everyone you come into contact with know about your plan to become a “professional”, not stereotypical, Realtor. Print out a thousand cards to start, with your name and contact info. thereon with the message that you plan to be in the business at a certain point in time (about a year from your license-granting date) and hand them out to everyone with whom you speak with, no matter where and when, except at funerals of course. Promote yourself and your beliefs personally, one person at a time, relentlessly but with no pressure, and honestly, for that one lead-up year. Study everything that you can real estate related for that one-year period. When you secure a position with a brokerage you will be well primed for success. You will possess the self confidence required to do what you will need to do for your clients, and you will make it…your way.
      The foundation for success is just that, a proper foundation. Build that foundation, then build the structure of your vocation thereon. You have a long way to go. If something is worth doing, it is worth doing right. Do it properly.
      Best of luck.

      • Joanna Makowicz

        Brian,

        Thank you so very, very much for sharing your wisdom with me. Your advice made a huge and positive change in my approach to this challenging business..Now my goals have become much more clear and defined..I was able to re-energize my thinking in the right ( I hope) direction.

        With gratitude,

        Joanna

    • Carolyne L

      Hi Joanna:

      This might help. There are plenty of useful tools along with good advice, here on REM.

      You can read for hours. Become a regular reader. There is much to learn. And learning never stops. The real estate business is in permanent motion.

      Just one example of many – go to Google search and type in the search bar:
      REM Carolyne L
      and dozens of my comments over the years will come up.

      Many will know I am a strong advocate of “farming” and employed multitudes of worthwhile related efforts, many of which I shared with REM readers over the years. I’m sure you will find some useful ideas.

      Just a word of caution: it often takes 3 years to establish a base (no idea why, but stats seem to validate) from which to build a base to work successfully over the next 25 years. Don’t be disappointed if you aren’t a superstar overnight .

      Forget what other people do. If you find magic success, be prepared to be critiqued and criticized by colleagues who can’t imagine how what you do works.

      But plod along and you will get there. Keep your own stats from day one. Make charts and graphs. The business world only functions using percentages.

      Over again we hear: often less than 50% of listings sell. So for every 10 you list, you can only prognosticate earnings for 5. But you will have “expenses” for all ten.

      I have no idea why but those stats never applied to me, I didn’t have 10 expiries in 10 years. I wish I could say why, but I really have no idea.

      Back to the farming method… Choose your farm area carefully. Only work a market that appears to have been sustainable year over year. No sense trying to build a business in spots that rarely turn over.

      Keep activity charts. (It was much easier to do in real life – before computers.) Work your charts and graphs EVERY DAY. Never let a whole week pass without doing what looks like useless work.

      You have to start some place and that’s as good a place as any – do your research; and, drive those streets.

      Record any activity to help you with your research: typical days on market is just one item. I recorded even such silly stuff as what side of the street the property was on. Over time, a picture took shape.

      Do what Brian suggested and give out your business cards every where you go.

      If you are so inclined, perhaps do a homeowner survey: ask questions such as length of time living there and why they chose that particular subdivision.

      Do not ask if they plan on moving soon. They won’t fall for that sort of thing. You are doing this to build rapport, yes. But – over time.

      If they want to communicate with you they will. Failing that, many will keep your own ‘repetitive’ information and contact you only when they need you. It can take time. Years. But it is all about building business for “the future.”

      Best of luck.
      Carolyne L

      Sent from my iPhone

      • Joanna Makowicz

        Carolyne,
        Thank you very much for sharing your insights. I shall definitely apply your suggestions.

        Kindly

        Joanna

  • Carolyne L

    Tina, you might find this useful. I wrote it for my public readership but discovered agents and Boards across the country found it worth distributing… They contacted me for permission to reprint and/or made a link to my article for their own sharing.

    Realtor Costs : Your Costs

    http://www.carolyne.com/costs.html

    Carolyne L

  • RECO Update

    Evelyn, Can you tell us how many homes sold in Canada last year? Your numbers seem high?

  • Evelyn Oteng-Pabi

    Hi Tina,

    I wanted to just briefly touch on the figures you give above. Statistically speaking, across Canada double ends are 1 in 4, and the average agent has a total gross sales value of $2 million or less.

    Leon d’Ancona B.T.L., M.T.L., RRESI
    President / CEO
    IMS Incorporated

    • PED

      Evelyn, from where are those stats derived? I’m presuming that a 25% double-end ratio is resulting from communities dominated by one or two brokerages.

      I just did a quick check on the sales within the last 60 days for Toronto and York region and found the percentage where the listing brokerage is also the selling brokerage, the overall percentage is 13.4%.

      For Toronto, sales totaled 4,000, I looked at the 4 core districts – sales 465
      For York Region, total sales of 3,649 core districts – sales 461.

      And that was strictly on the brokerage level and not the double-enders by the listing Realtor which reduces the ratio even further.

      That is more in line with what I know the number to be.

  • Carolyne L

    Brian (at other post but thought applicable to post here at Tina’s noted experience):

    There’s always the possibility that the missing links are not exactly always things that can be taught, or even learned, but rather are created, naturally, over time – time reference being “before” RE days.

    Often those who manage to be successful would have been successful anyhow, in any career of their choosing.

    Likewise, sometimes the reverse is true. Those who were not successful, as has been stated, will have a go at sales, and since sales in real estate is probably a an opportunity for a more financially large end result, that is the entry level deciding factor.

    How often is the answer to the question: “why did you decide on a career in real estate?” – “oh, I just L-OOO-VE to look at houses and watch all the real estate tv shows.” Followed by: “We spend all our free time checking out builders’ model homes, so decided to make a career of it, since I know all about staging and evaluating brand new models.” (WHAT??? has THAT got to do with a real estate career?) But very often that IS the basis on which a career decision is made.

    It’s so cruel when these people come back to earth and realize that has absolutely no bearing on anything relative to a career in real estate.

    But by the time the candidate is ready to fly the real estate plane into the wild blue yonder, they have contributed dearly, financially, to “the system.”

    Some brokerages would even pay all the newbies’ initial costs, to be reimbursed from all those would be incoming deals. Even pay for the courses.

    When no sales happened, and the candidate elected to leave at the first practical opportunity, the brokerage owner put a mortgage on the candidate’s house, and oh, yes – had the candidate sign a non-compete reinforce document just in case the rep decided to reinvent the wheel and join up again in the near future, elsewhere.

    I worked at a brokerage in the beginning of my career, where that situation happened to a young bookkeeper woman come real estate agent. It got ugly.

    She took me to lunch to ask how I had become what people referred to as an overnight success. We were both licenced at about the same time. What was I doing that seemingly she wasn’t doing…

    And the success ratio doesn’t necessarily relate to how smart or well educated the top producer is, either, because like others have said: throw enough of it at the wall, some of it sticks often applies in real estate.

    It wasn’t so much that I was smarter than others, but I employed the ‘marketing’ concept long before it was the popular thing to do. I was just doing “something different,” not yet experienced by local community.

    Don’t forget: I was completely new to town; knew absolutely no one. Didn’t know a single thing about all the things needed to be successful in real estate.

    I had a map, a desk, and an office land line. Office secretaries typed offers, six pages thick. Listings were handwritten forms put in an overnight mailbag, and processed at the Board, where information was put on a daily hot sheet delivered by that same mailbag system to each office. The system worked miraculously well. Amazing when you think back. Listings were printed on daily year sheets (Jim and Heino will know all about it.) and printed in thick catalogues.

    I had only visited the city once, perhaps twenty years earlier. Had just moved there myself. Bought new from a builder whose on site rep had lied like a rug, we later found out.

    I applied a percentage of every sale’s earnings toward the ‘next’ transaction. I did that from day one. I produced beautiful full colour print brochures within a couple of days of taking a listing. But often the property had sold overnight in a dead market, even.

    Other agents tossed out their own office advertising in such a circumstance. Me? I recycled it all.

    I had the printshop over print it all with a sold sign and sent it out to the neighborhood to attract a new listing. Nothing ever went to waste. I paid for all my advertising myself, even so it was frowned upon.

    I had to get permission from head office, because it might make me look more productive than other reps the office mgr said.

    When in fact, the public presumed the costs were borne by the office. Many thought I drove a company car. Still today some in the public think agent cars are paid for by company and totally surprised to learn that isn’t so.

    Buyers who stopped by and took a brochure would often keep it and call me, telling me they couldn’t afford this property, but would keep the brochure (truly for several years in some cases) and call me if they ever decided to sell.

    They wanted their home marketed ‘my way.’ I was always a little surprised when they really did call. But remember: I was an oddity.

    No one else at the time was doing marketing “property-specific.” In fact brokers frowned on that sort of tailor-made marketing; too narrow minded, they said.

    Needed to do more generalized marketing to attract a broader would be client base.

    If you do “market specific” promo, make sure you hire a professional photographer. Most often you simply cannot do what they do no matter how clever you are with your camera. He has to be available on short notice.

    And if your brain doesn’t compute in the graphics arena, let the print shop prepare. But do double check their work. They make mistakes. You don’t want the wrong house picture in the wrong word ad.

    Those who never look for repeat business fall in the category of being silly, perhaps. Clearly it could be nearly a guaranteed client base source.

    But for some reps building business for the future is not on their planning board. They only deal in the now.

    They don’t think about five years down the road, much less 25 years, during which time they may contract with a given family as much as eight times, reselling the same house many times, over and over again for the people, each time, who bought it. Sort of a domino effect.

    Likewise, those current buyers will, chances are, become sellers down the road. And, some might be surprised that a sales rep will list a property and never ask the seller what their buying intentions are.

    Next thing you know the sellers let their listing rep know that on the weekend they “bought a house.” GOLLY!!! huge surprise.

    And the look of outright shock can be seen on the face, and the rep goes home distressed, maybe saying: but they really seemed to like me – what did I do wrong….” Never ever thinking the sellers would be “disloyal.”

    I was so surprised 35 years ago when first in the business, when a colleague more than ten years a salesman was called into the broker’s office to “train” on this topic.

    The surprise was that no one had noticed the rep’s way of collecting large numbers of listings, many of which never sold, during his ten years???

    But other agents in the office would ask his sellers, when showing his listings, what their buying intentions were – and go out immediately and sell that owner a house; right out from under the nose of the listing agent. Yes. Right in the same office. What a business I had found myself in.

    Mr. Lister had never turned his sellers into buyers. He worked religiously, rain or shine. So sad. He finally left the business, finally, when his recession expenses became to much to bear, to sell insurance.

    Carolyne L

  • Roger Arsenault – Broker

    Great job.. Remember the philosphy of “We get by giving”. Things will turn around for those who perservere.

    • Like the principle of sowing and reeling. This was my tilling season!

  • JerryB1020

    Kudos for sticking it out, Tina.
    Question: Looking back, what didn’t you know on May 1st that would have made a difference?

    • “By forgetting to count the cost, they become either unprepared real estate agents or clients who think agents should work for free. Allow me to debunk that a bit by telling you about my first year in the business.” Tina Plett

      I didn’t know that the cost of operating as a registrant was so high. I had no idea how vast the difference is between gross and net income. The difference for me would be that I would have made an informed decision had someone explained it to me.
      Part of the reason that I initially poured these thoughts out publicly was because I resented the general public thinking we made too much money. The other part of the reason was to educate or caution anyone who is thinking of going into the business so that they can make an informed decision. Real estate business is like farming. It takes a massive time commitment and a lot of expenses to operate.

      • Joanna Makowicz

        Thank you Tina.
        I am about to step into “your” May 01.
        And yes, I am nervous….

        Kind regards

        Joanna