SW03ES Posted January 17, 2005 Share Posted January 17, 2005 Well not really changing, more adding onto, for now. As a lot of you know I own my own business. I design customer retention and satisfaction systems for car dealerships. I've been doing this for ~3 years now and its been going well. I've however come to a point where I'm not sure where to take this business. I have it set up now where my only task is making and maintaining the relationships with my clients, I outsource all the actual work of building the materials used by my customers etc. It gives me a lot of free time, I mean a lot. I may only work 2-3 hours a day when I work, maybe 10 hours a week. That was really nice, for a while. I've also reached capacity with the people I'm outsourcing the actual work to and if I work harder to grow my business I'll need to find other sources for work. SO, I've decided to go back to school and get my real estate license and try my hand at selling real estate. I'm still going to be overseeing my business as it is (which is nice, you know I've gotten used to being able to eat). I've done a lot of research into the business and talked to a lot of people and it seems like it might be a good fit for me. Real estate agents are self employed which is very important to me but it will give me more hands on contact with people, which I really like. I've already started the course and am really enjoying it so far. There's so much more to it than I ever realized, and there is so much potential for people who are good both in personal fulfillment and in money. One thing I have learned already is...never buy a house without a realtor. It is so complicated and involves so much tehcnical knowledge and paperwork you just have no idea. What a lot of people also don't realize is if they're buying a house that is listed with a realtor then they're paying the same amount in commission to one realtor that they could be paying half to their own realtor who will negotiate and fight for their best interests. Buying a house on your own that is listed by a realtor is like suing someone who has a lawyer when you don't have one, but paying for your own anyway. Makes no sense. The job of a realtor hardly is driving people around and showing them homes and listing properties, it involves a lot of knolwedge of law and the whole transaction seems a lot more like a legal proceeding than a purchase. Its sort of like being a lawyer actually. There are a lot of legal and ethical responsibilities realtors have towards their clients (the realtor listing the house has the house's owner as a client, so when you go to negotiate with them they fight for their clients best interest, not yours. But if you have a buyers agent then you are their client and they do the same. A lot of the same responsibilities of agency that lawyers have. Even if I dont stay in the real estate business, I'll never buy or sell a home without a realtor. So, feedback, opinions or advice are welcome. Quote Link to comment Share on other sites More sharing options...
amf1932 Posted January 17, 2005 Share Posted January 17, 2005 The only negative I find about your new endeavor, is that you generally drive your prospective customers to see the property. Knowing how carefully you maintain your car, this can be a bummer with people that don't give a s**t, such as slamming the doors, putting their dirty feet on your beautifully groomed carpet, etc, etc. Alan Quote Link to comment Share on other sites More sharing options...
SKperformance Posted January 17, 2005 Share Posted January 17, 2005 I am not too big a fan or of the realtor market I perfer to buy and sell my own houses last time i saved over 20 000 which i would much rather put in my pocket than someone elses beside i have a good lawyer who closed for less than $200 as i submitted all my paperwork Good luck on it Quote Link to comment Share on other sites More sharing options...
Lexusfreak Posted January 17, 2005 Share Posted January 17, 2005 Well not really changing, more adding onto, for now.As a lot of you know I own my own business. I design customer retention and satisfaction systems for car dealerships. I've been doing this for ~3 years now and its been going well. I've however come to a point where I'm not sure where to take this business. I have it set up now where my only task is making and maintaining the relationships with my clients, I outsource all the actual work of building the materials used by my customers etc. It gives me a lot of free time, I mean a lot. I may only work 2-3 hours a day when I work, maybe 10 hours a week. That was really nice, for a while. I've also reached capacity with the people I'm outsourcing the actual work to and if I work harder to grow my business I'll need to find other sources for work. SO, I've decided to go back to school and get my real estate license and try my hand at selling real estate. I'm still going to be overseeing my business as it is (which is nice, you know I've gotten used to being able to eat). I've done a lot of research into the business and talked to a lot of people and it seems like it might be a good fit for me. Real estate agents are self employed which is very important to me but it will give me more hands on contact with people, which I really like. I've already started the course and am really enjoying it so far. There's so much more to it than I ever realized, and there is so much potential for people who are good both in personal fulfillment and in money. One thing I have learned already is...never buy a house without a realtor. It is so complicated and involves so much tehcnical knowledge and paperwork you just have no idea. What a lot of people also don't realize is if they're buying a house that is listed with a realtor then they're paying the same amount in commission to one realtor that they could be paying half to their own realtor who will negotiate and fight for their best interests. Buying a house on your own that is listed by a realtor is like suing someone who has a lawyer when you don't have one, but paying for your own anyway. Makes no sense. The job of a realtor hardly is driving people around and showing them homes and listing properties, it involves a lot of knolwedge of law and the whole transaction seems a lot more like a legal proceeding than a purchase. Its sort of like being a lawyer actually. There are a lot of legal and ethical responsibilities realtors have towards their clients (the realtor listing the house has the house's owner as a client, so when you go to negotiate with them they fight for their clients best interest, not yours. But if you have a buyers agent then you are their client and they do the same. A lot of the same responsibilities of agency that lawyers have. Even if I dont stay in the real estate business, I'll never buy or sell a home without a realtor. So, feedback, opinions or advice are welcome. ← SW, my father is a Real Estate Broker & has been in the business since 1981. He started his own company in 1999 & has been at it ever since. He's worked for the 'big 3' which would be Re/Max, C-21 & A.E. LEpage. If one wants to make serious money, you get your broker licence, not just your regular 'agent' licence. It's not something that you can do 'part time' as there are MANY aspects to the business depending on which you want to get into (IE: Residential, Commercial, Industrial etc). I'm not sure how the laws are in your neck of the woods but I assume they are different than in Ontario. If you want any additional info or even speak with my Dad for any advice......PM me & I'll give you his info. He's VERY good at what he does & can provide you with some 'heads up' info should you need any suggestions or have any questions. B) Quote Link to comment Share on other sites More sharing options...
steviej Posted January 17, 2005 Share Posted January 17, 2005 both my aunt and a coworker have done just what you are doing and they do it on a part time basis. They make good money for what work they do do. I wish you the best. steviej Quote Link to comment Share on other sites More sharing options...
SW03ES Posted January 17, 2005 Author Share Posted January 17, 2005 AMF- I've thought about that LOL. This is a pretty expensive,, high class area but if that proves to be a problem I'll buy something exclusively for driving people around to see properties that I can not care about. A Chrysler 300 or something. SK- You can have a realtor just close and I bet they'd do it for $200. Lawyers are just that, lawyers and it actually can be illegal for them to participate in certain parts of a real estate transaction for profit, at least in the United States. Realtors can give you advice as to market pricing, repairs that can be made and how much value they'll add to the final sale etc. Plus they market the property for you, a lot of realtors won't even show for sale by owner properties because they don't want to deal with/negotiate with owners. Generally comissions don't take anything out of your pocket, they're built into the sales price above and beyond what you want to get. For instance you're selling a $400,000 house, well the comission built in would be lets say 6% or $24,000, well the agent would list the property for $424,000. You'd still get the $400,000 you would have gotten had it been for sale by owner and you have an agent that negotiates for you and gives you the benefit of agency. Plus like I said if you're buying a property that is listed by a realtor you're paying the 6% anyway, its just all going to the listing realtor instead of half going to your realtor instead. If you're selling and your buyer has a realtor then thats still 3%. LF- Thanks! I might just do that! I really won't be doing it part time as my business that I own now doesn't take any time at all. If I do well at and enjoy being a realtor I will probably sell my other business. In this area one license is good to sell residential or commercial property (industrial is considered commercial) so in order to get it I have to learn all of the laws. So far the class has been really interesting, but its long. 3 days a week...8 hours a day. Thats a long time to sit in a classroom. I'm not sure which brokerage I want to go with yet, around here the big three are Long and Foster, Weichert and probably Prudential or Coldwell Banker. We also have ReMax, Century 21. We also have WC & AN MIller and Lewellyn which are really high line "fancy" types of realtors. I'm not sure which would be the best, Long and Foster unquestionably dominates our area but they, as well as Weichert aren't independently owned by brokers like most brokerages, they're all owned by the corporation and run by a managing broker who is payed mostly on salary. I don't know that thats an optimal setting for success. Also most of the brokerages operate on Commission Split (I'm sure you're familliar with that but I'll explain it to those that aren't) every real estate deal that is represented by at least a listing broker has a commission built into the sales price, 5,6,7,8% depending on the listing. Well if the listing agent sells the house, he/she keeps the whole 6%, or if a buyers agent sells it he/she gets half or whatever is stipulated in the listing. For agents on a commission split, their broker gets half, 25% etc of their half or whole commission. Brokerages like ReMax and some others don't have commission splits, instead you pay a flat monthly rate for a desk, a phone etc. That can be $800 or it can be $3000 depending on what kind of facility you want. Steve- Thanks! I appreciate it. Quote Link to comment Share on other sites More sharing options...
Lexusfreak Posted January 17, 2005 Share Posted January 17, 2005 AMF- I've thought about that LOL. This is a pretty expensive,, high class area but if that proves to be a problem I'll buy something exclusively for driving people around to see properties that I can not care about. A Chrysler 300 or something.SK- You can have a realtor just close and I bet they'd do it for $200. Lawyers are just that, lawyers and it actually can be illegal for them to participate in certain parts of a real estate transaction for profit, at least in the United States. Realtors can give you advice as to market pricing, repairs that can be made and how much value they'll add to the final sale etc. Plus they market the property for you, a lot of realtors won't even show for sale by owner properties because they don't want to deal with/negotiate with owners. Generally comissions don't take anything out of your pocket, they're built into the sales price above and beyond what you want to get. For instance you're selling a $400,000 house, well the comission built in would be lets say 6% or $24,000, well the agent would list the property for $424,000. You'd still get the $400,000 you would have gotten had it been for sale by owner and you have an agent that negotiates for you and gives you the benefit of agency. Plus like I said if you're buying a property that is listed by a realtor you're paying the 6% anyway, its just all going to the listing realtor instead of half going to your realtor instead. If you're selling and your buyer has a realtor then thats still 3%. LF- Thanks! I might just do that! I really won't be doing it part time as my business that I own now doesn't take any time at all. If I do well at and enjoy being a realtor I will probably sell my other business. In this area one license is good to sell residential or commercial property (industrial is considered commercial) so in order to get it I have to learn all of the laws. So far the class has been really interesting, but its long. 3 days a week...8 hours a day. Thats a long time to sit in a classroom. I'm not sure which brokerage I want to go with yet, around here the big three are Long and Foster, Weichert and probably Prudential or Coldwell Banker. We also have ReMax, Century 21. We also have WC & AN MIller and Lewellyn which are really high line "fancy" types of realtors. I'm not sure which would be the best, Long and Foster unquestionably dominates our area but they, as well as Weichert aren't independently owned by brokers like most brokerages, they're all owned by the corporation and run by a managing broker who is payed mostly on salary. I don't know that thats an optimal setting for success. Also most of the brokerages operate on Commission Split (I'm sure you're familliar with that but I'll explain it to those that aren't) every real estate deal that is represented by at least a listing broker has a commission built into the sales price, 5,6,7,8% depending on the listing. Well if the listing agent sells the house, he/she keeps the whole 6%, or if a buyers agent sells it he/she gets half or whatever is stipulated in the listing. For agents on a commission split, their broker gets half, 25% etc of their half or whole commission. Brokerages like ReMax and some others don't have commission splits, instead you pay a flat monthly rate for a desk, a phone etc. That can be $800 or it can be $3000 depending on what kind of facility you want. Steve- Thanks! I appreciate it. ← That's why my Dad went into business for himself (List For Less Real Estate). The other Brokers were charging him close to $1k a month for what they called 'desk fee's'...when in fact he worked out of his home anyways & they like to take a chunk of your commissions too (depending on the arrangement they have with that specific agent or member broker). One thing (at least in Ontario), is the good brokers & agents were smart & have been cutting commissions to the bone to keep the sales coming (there is no such thing in the Toronto area as a 6% commission anymore, you want to compete in this market? one has to cut commissions.......hey, something is better than nothing in this day & age, am I right?). My dad is in the business of saving people money with the $400,000 example you gave & the savings are substantial! B) Let me just say this, does one really expect to rake in $24,000 for showing a few homes & doing up some paperwork? That's part of the reason the smart agents are so successful.........especially on expensive homes. ;) Quote Link to comment Share on other sites More sharing options...
SW03ES Posted January 17, 2005 Author Share Posted January 17, 2005 Commissions around here aren't 6% as a rule anymore but its closer to 5%. Thing is that at least around here commissions are set by the listing agent, thats part of the strategy you can't set a commission too low in the listing or you'll make agents avoid showing it to their clients. After the sale is over you can do whatever you want with your half or whole, including rebate it back to the client. There's a company here called Zip Realty that does just that they give a "cash back" to the client of their commission. That way the property is listed high enough to be attractive to other brokers but their clients get a savings. Thats one thing that I love about real estate, there's a solution to every problem. I don't know how it is in Canada but here an agent can put 100 hours of work into one sale, if you're getting say 2.5% of a $400,000 home thats $10,000 if you have a 60/40 split with your broker thats $6000. $6000 isn't an unreasonable commission I don't think. In the US the independent brokerages have a really hard time staying in business. Thats what I originally wanted to make a goal too was to get a brokers license and open up my own brokerage but knowing what I know now after talking with people and taking this class I don't know if thats the right way to go. The #1 agent in the nation for instance works for Long and Foster right here and he does between $150-$160,000,000 worth of business a year. Thats totally insane, think about that. Even if he makes 1% of that, thats $1,500,000-$1,600,000 a year. Now, he has a team of 5 marketing specialists and agents to pay, but still. He makes more than 1% too, closer to 3 is a better figure probably, guys like him don't do commission split. Thats totally nuts. I'm not neccisarily interested in anything like that, imagine the kind of work he put in to build that business and puts in to maintain it. My goals hover around the $30,000,000 mark making $300,000-$400,000. Thats still a lot of business to maintain Making a lot of money has always been important to me but I've learned I'm not content making it and sitting around the house all day. Working for a company even in some sort of commissioned sales deal like my dad does has always seemed distateful to me. I like to be in control of my own day, if I don't want to get up one day, I don't. If I want to take off for Disney World for a week and I have the money, I do. Thats the best thing about being self employed. He makes a lot of money, but he's got to go to work every day. When I was a kid he wasn't able to go on vacation with us or he had to come for part and then leave, I don't want things to be like that for me. Great thing about real estate is that if you view it as a business that has profits and losses and pay yourself a salary out of your earnings then you can plan for these things and do them... Quote Link to comment Share on other sites More sharing options...
RX in NC Posted January 17, 2005 Share Posted January 17, 2005 Selling real estate can be an extremely profitable livelihood but as you've learned, it doesn't happen overnight and without a tremendous amount of work and effort. Opportunity and profitability vary from area to area for a number of reasons that are tied to employment levels, local economic conditions, interest rates, etc. etc. etc. A drawback for someone who prefers their evenings and weekends to themselves is having to always be on call when you're starting out in order to maximize your chances for success. But hard work never hurt anyone. Just never forget that selling in the housing market can be and usually is a cutthroat business these days. Commercial real estate may be a bit more palatable for you. Good luck either way. Quote Link to comment Share on other sites More sharing options...
SKperformance Posted January 17, 2005 Share Posted January 17, 2005 Sounds like you got a real solid plan So are you going to buy a nice Ford truck to shuttle perspective buyers around in so they don;t make a mess of you clean ES ? :) Quote Link to comment Share on other sites More sharing options...
SW03ES Posted January 17, 2005 Author Share Posted January 17, 2005 Selling real estate can be an extremely profitable livelihood but as you've learned, it doesn't happen overnight and without a tremendous amount of work and effort. Opportunity and profitability vary from area to area for a number of reasons that are tied to employment levels, local economic conditions, interest rates, etc. etc. etc. A drawback for someone who prefers their evenings and weekends to themselves is having to always be on call when you're starting out in order to maximize your chances for success. But hard work never hurt anyone. Just never forget that selling in the housing market can be and usually is a cutthroat business these days. Commercial real estate may be a bit more palatable for you. Good luck either way. ← Oh yeah, I don't care about hard work. As long as there's a tangible reward waiting there for me at the end I'm willing to do whatever it takes. I'm also not overly concerned about the evenings and weekends as I view that as a part of being self employed. One of my customers that owns a car dealership once said "I'm self employed, so I'm always working" and I think thats true in a lot of fields. I like the idea of being able to say "You know, I'm not going to take this call right now" and have it be my decision with only myself to hurt in the process. As for commercial vs residential I'm still kicking that one around. Like you said the residential market is very cuthroat, especially around here. Property values have doubled in some areas within 5 years and homes for sale are scarce while theres a huge influx of people looking to buy. Commercial is a little quieter. Thats why I was pleased to know that my license will enable me to sell either side. SK- I'm gonna start out using the Lexus, then we'll see lol Quote Link to comment Share on other sites More sharing options...
Lexusfreak Posted January 19, 2005 Share Posted January 19, 2005 SK- I'm gonna start out using the Lexus, then we'll see lol ← Not too many nicer cars out there one can use for real estate than a Lexus! ;) My Dad has asked me on several occasions (when he has an expensive listing appointment) to borrow my ES. B) Quote Link to comment Share on other sites More sharing options...
VBdenny Posted January 23, 2005 Share Posted January 23, 2005 I sold real estate for 5 years and really liked it. The biggest problem is that it involves a great deal of work nights and weekends. I did fairly well until the oil prices dropped in the early 80's and I was selling in Tulsa. Luckily my wife got a good job back in Norfolk so we moved back and I went back to teaching. I teach what use to be called shop and it is great except for the money, but since my wife has a good job that isn't that much of an issue for me. I found real estate to be all about who you know. Contacts are everything, if you have them and any sense (which you obviously do) you will do great. Quote Link to comment Share on other sites More sharing options...
PharmGuy Posted January 23, 2005 Share Posted January 23, 2005 Hey SW03ES, I also want to wish you the best on your new endeavor. I would suspect the Washington D.C. area would be an area of elevated turnover of residents so that should help. I know, some of the other areas of the state are going through tough economic times, due to out-sourcing and the foldup of the textiles. My wife and my Mom both held licenses for awhile. Mom did ok, for a small community--she sold for about 12 yrs. My wife, who I think got her license, as a way to !Removed! through other people's homes, didn't last long. Only about a year--- just wasn't for her. She went into banking, and is still there (I claim she's making a list of people with unclaimed funds--j/k). Good Luck--Enjoy It, PharmGuy Quote Link to comment Share on other sites More sharing options...
monarch Posted January 23, 2005 Share Posted January 23, 2005 One thing I have learned already is...never buy a house without a realtor. It is so complicated and involves so much tehcnical knowledge and paperwork you just have no idea. Even if I dont stay in the real estate business, I'll never buy or sell a home without a realtor. ← To the contrary - the main reason a friend of mine was able to afford to pay cash for new RX330 is because she saved $36,000 in real estate commissions when she sold her $600,000 southern California house herself. She studied and got her own real estate license specifically to help her learn how to handle the sales transaction. She studied only a month or two - a small investment of time with a huge $36,000 return in her case. Quote Link to comment Share on other sites More sharing options...
SW03ES Posted January 23, 2005 Author Share Posted January 23, 2005 But she still lacked having an impartial expert to do the negotiating and work through the sale for her, thats what you're paying for. Like I said before, unless the buyer didn't have a real estate agent themselves she didn't save the entire commission. People go to court all the time without lawyers, and some do fine. Doesn't make it a good idea. Plus, not many people have a month to devote to getting a real estate license. In CA you can do it from home but not in most states (I think CA may be the only one). I have to sit in a classroom 24 hours a week for a month, not many people have the time to do that. Barbers don't cut their own hair, lawyers don't represent themselves in court and generally its not a good idea for a real estate agent to list their own home. Part of what you're paying an agent for is their impartial expertise based on experience in the area with pricing and zoning laws etc, the backbone provided through them consisting of an agency with mortgage brokers, title companies etc, and their impartial ability to negotiate fiercly on your behalf. Plus she didn't get the opportunity to list her home with the MLS who knows, maybe she could have made more? She owned the home, she wasn't impartial. Plus, usually when a house is listed the commission is tacked on top of the list price anyways, and technically the buyer pays the commission so she really didn't save any money. She may have thought she did. Quote Link to comment Share on other sites More sharing options...
SW03ES Posted January 24, 2005 Author Share Posted January 24, 2005 Thats another thing I even forgot. Part of what you're paying a realtor for is protection in the transaction. Say your buyer finds a crack in the basement, a crack that you knew about (that he can prove which actually isn't hard) and didn't tell him about before the sale. Thats misrepresentation and its illegal. If he sues you what are you going to do? I'm insured against such things, I'd either turn it into my errors and omissions insurance or he could make a claim against my state's real estate transaction guarantee fund. You'd loose your house to satisfy the findings. Just another reason why realtors are worth what they're paid. Quote Link to comment Share on other sites More sharing options...
RX in NC Posted January 25, 2005 Share Posted January 25, 2005 Realtors are worth what they're paid only when they are honest, ethical, and have the best interests of their clients at heart. I've dealt with a handful of realtors in our area who are none of the above, and actually took two of them to "realtor court" about a decade ago due to their dishonesty concerning a disclosure issue involving a home we purchased (yes, I won the case - both realtors were put on two-year probations and will always carry that incident on their permanent records). So like anything else, it's buyer/seller beware. Get references, research your short list of potential realtors, and be careful out there.... Quote Link to comment Share on other sites More sharing options...
SW03ES Posted January 25, 2005 Author Share Posted January 25, 2005 Yep, like anything else. Quote Link to comment Share on other sites More sharing options...
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