An occasional commission might fall in your lap, but for the most part, you are going to have to earn every penny you make in real estate sales. Let’s note what the job is, and how to get good at it.
Your job is to advise people about buying and selling real estate.
To advise people properly, you want to know more about the subject than they do. Preview homes every day, and learn something about them. Remember the important details of each home that affect the value and be able to recite them later as part of your advice.
Be a master of the MLS – it is our tool that assists us in doing our job. Know how to use it and other internet tools to help you be more efficient.
The contract is the bible – know it well. Your clients don’t read it, so know what they are getting into.
Work on your craft – particularly on your sales skills.
There are plenty of educational courses, seminars, and different levels of coaching available. But none of it compares to what you learn on the street. You learn the most by doing!
Ideally you want to work with someone who is mentoring you in action. Every big franchise company has some sort of introductory crash course on sales, and then a weekly training class – but after that, it’s a long road to learn the trade. If you can hire on with a realtor who is active in the business and can show you the ropes, it will expedite your learning process!
Generally speaking, the realtor community is a nice bunch of folks who welcome newcomers into the business and offer encouragement…….while muttering under our breath, ‘They have no idea what they are getting themselves into’.
New agents bounce around like a pinball for a year or so, while the business is happening to them. The more hours invested, the quicker the education, and the potential is truly unlimited. It’s why agents stick it out as long as they can, in hopes of success being right around the corner. But seven out of eight don’t make it.
Last week we talked about getting your license first.
Next, recognize the hard truths about the business so you can position yourself accordingly:
The majority of your sales will involve another realtor you don’t know, and most of them won’t share your selling skills or desire to succeed. You want/need to be a chameleon and meet them on their level – and you will learn something every time.
You want to spend money on your business. Keep an eye out for the best options.
Get comfortable with failure – it happens a lot. You’ll learn to live with losing fair-and-square, but there will be multiple times that the human condition will disappoint you. The majority of the time it’s inadvertent; where agents get in such a rush to sell something they forget about everyone else, including you and their seller.
Listings are the name of the game. If you want to minimize the negative impact of the things above, then concentrate on getting listings and everything else will take care of themselves.
I’m going to help a few people get started in the business, and hopefully make a career of selling real estate. I figure I should just publish my guide right here on the blog, and Fridays are a good day to do it!
Let’s explore what it takes to become a realtor in 2020!
It’s so easy to get a real estate licensee, demonstrate your commitment to yourself and get one.
Online training courses give you the basics and prepare you for your state test, which is 150 multiple-choice questions – get 70% of the answers correct and you pass! You can’t sell real estate without one, so if you’re in it, to win it, get a license so you can get paid right away!
There are two sides of the business; sales and transaction coordinating.
If you are a great people-person, then being in sales is for you. It’s called a ‘salesperson’s license’, but so far all you’ve done is pass a test. Getting out and speaking with people regularly about buying and selling homes is the job.
If you’re not a people-person, or want to work your way into the sales business, you can take a more clerical job in transaction coordinating. Once the salespeople have brought a buyer and seller together and completed a written purchase agreement, then we have staff assist with making sure all the necessary details get done to close the sale. This job pays around $30,000 – $50,000 per year if you don’t mind working a few 12-hour shifts along the way. There is a limited future unless you can create your own company.
Oh, you want to be in sales? What’s the difference?
You don’t get paid anything along the way. You’re paid on commission. You need to sell, to get paid.
It’s not that comfortable for the first twenty years, but you’ll get used to it.
What’s realistic?
You probably won”t make much money during your first year, so have sufficient financial backing that you don’t have to sweat it.
Expect to spend money on your business. You are an entrepreneur – a business owner – and it takes money to make money. But if you are a socialite who can generate leads from the yacht club then more power to you. We will help you pursue leads. Compass is touting our new AI engineering, and it promises to help.
You need someone to teach you the ropes. You need a mentor.
The big brokerages offer a mentor program with classroom training and a manager. It’s the basics, and better than nothing. But ideally you want on-the-job training where you are learning while doing.
In summary: Get a license, have some money in the bank, and find the best mentor you can.
One of the more-accurate forecasters is predicting that home prices will start dropping:
Strong home purchase demand in the first quarter of 2020, coupled with tightening supply, has helped prop up home prices through the coronavirus (COVID-19) crisis. However, the anticipated impacts of the recession are beginning to appear across the housing market. Despite new contract signings rising year over year in May, home price growth is expected to stall in June and remain that way throughout the summer. CoreLogic HPI Forecast predicts a month-over-month price decrease of 0.1% in June and a year-over-year decline of 6.6% by May 2021.
Unlike the Great Recession, the current economic downturn is not driven by the housing market, which continues to post gains in many parts of the country. While activity up until now suggests the housing market will eventually bounce back, the forecasted decline in home prices will largely be due to elevated unemployment rates. This prediction is exacerbated by the recent spike in COVID-19 cases across the country.
Expecting prices to fall that quickly is flawed, however.
They are ignoring that for home prices to go down, we would need a load – probably a majority – of sellers who are willing to sell for less than the last guy got. In addition, it would take realtors who recognize what’s needed, and be able to properly advise their sellers on lower pricing.
It ain’t going to happen.
Listing agents only have one pitch – to berate the buyer agents into paying the seller’s price. If we ever get to the point where buyers object to the constantly-rising prices, and/or we run out of buyers altogether, then there will be a long stall before sellers and agents re-calibrate.
Recognizing that a shift in pricing is needed will be hampered by all the usual excuses.
The seller retorts of “I’m In No Rush”, “I Don’t Need to Sell”, and the classic, “I’m Not Going to Give It Away”, will be doused with coronavirus blame before any sellers – even the desperate ones – would consider selling for less than what they think they deserve.
Sales will slow first, so keep an eye on them – but it would take 1-2 years of stallout before sellers and agents start believing that they might not get their price.
This is one of the better options I’ve seen for touring a home remotely.
The live tour would be similar to showing the home in person because of the open discussion between buyers and agent, and the recording of the event is especially helpful for reviewing later! https://www.homeroverapp.com/
Are we at the point where buyers only tour the homes in person that are the real contenders? Yes!
Our MLS is going to provide a Coming Soon feature, which will fluster the agents who say that the Coming Soons build anticipation (like a movie trailer) and test pricing, but who then use the concept to circumvent the MLS and instead advertise directly to the consumer in hopes of double-ending the commission.
Members,
The Coming Soon status launches in San Diego Paragon Tuesday, May 19th. From that day forward, when entering listings for sale in San Diego Paragon, you may choose between Active and Coming Soon.
To prepare for this launch, Paragon will undergo scheduled maintenance from 10:00 PM PT Monday, May 18th to 6:00 AM PT on Tuesday, May 19th – a total of eight hours. Paragon will be unavailable during this time. Below is a brief video to help you understand the details of this status.
How does Coming Soon work?
Coming Soon allows listing agents to take up to 21 days to stage the property, take interior photos, prepare it for showings, and so on, without Days on Market accruing.
How is Coming Soon similar to Active?
– Marketing is allowed in both statuses, so long as Coming Soon listings are clearly marked as Coming Soon.
– Both Coming Soon and Active listings are fully displayed to other professional users of MLS systems.
– The listing agent offers a commission on both Coming Soon and Active listings.
How is Coming Soon unique?
– Coming Soon listings have limited distribution: they will not go out from the MLS to portals like Zillow, Trulia, and Realtor.com, or to IDX broker and agent websites.
– Showings are not permitted in Coming Soon.
– Because of these limitations, Days on Market do not count in Coming Soon.
We’ve touched on two differences that the coronavirus is causing in residential real estate sales; the cumbersome arrangements now required just to see a house for sale, and how wearing masks will help buyers hide their interest in a home.
What else is changing?
The real estate flyers are gone now, and public open houses are heading for extinction too – and the 3D tours are being heralded as a worthy substitute. It’s too bad too, because the industry never fully grasped the biggest benefit of open houses – helping to create urgency in the buyers, especially when the home is fresh on the market.
The 3D tours are very crafty, and buyers should love them for offering maximum convenience within minutes – or seconds. Sellers don’t have to leave their house every Sunday afternoon, and agents won’t have to work weekends any more.
What’s wrong with that?
Have you ever seen a perfect house? Me neither.
The 3D tour allows the viewer to scroll around the home at their own pace, which is a plus. But it’s too easy for viewers to give up when they see something unusual or have trouble navigating.
You gotta give the house a chance.
Rather than relying on a thorough walk-around with an agent who is explaining every nuance, the home-buying decisions will be based on fancy imagery on a computer screen.
Won’t the interested parties pursue an in-home visit? Yes, and they are the most likely real buyers.
But it’s the internet viewers who click out too quickly who will miss out – and fewer buyers relying on less information isn’t a positive for home sales. Instead, the sales process gets dumbed down further, and those who support the 3D tours as an adequate substitute for agent advice are contributing to the downfall.
It’s all going that way anyway, but at least you can say you saw it coming!
They send out this survey twice each month – on the 15th and 21st – so these agent comments above were based on their market observations around then. Hopefully they have gotten back to work by now:
Town
Zip Code
New Listings Since April 1st
New Pendings Since April 1st
Cardiff
92007
18
3
Cbad NW
92008
25
15
Cbad SE
92009
63
36
Cbad NE
92010
18
15
Carlsbad SW
92011
47
20
Carmel Vly
92130
79
50
Del Mar
92014
28
10
Encinitas
92024
71
38
La Jolla
92037
60
16
RSF
92067
38
15
Solana Bch
92075
13
2
NSDCC
Totals
460
220
We have had 220 new pendings since April 1st, which is remarkable! The 220 is today’s number, of which 47 have already closed. Others that went pending and fell out of escrow are not included.
One of the most insane MLS rules prevents agents from including videos in the remarks. The MLS police is afraid that agents will slip in their contact information, and buyers will rush to purchase direct from the listing agent – but they can do that anyway. How hard is it to find a listing agent’s phone number in 2020?
Our MLS is temporarily allowing virtual tours and virtual open houses, but let’s hope it will be a permanent change. The real estate world is well on the way to eliminating the buyer-agents that provide no value, and those that give good advice don’t have to worry about losing a client to a video message.
In addition, allowing video tours in the remarks would cause more agents to do them!
The California Association of Realtors published their coronavirus addendum/amendment today.
Those with an existing contract aren’t obligated to sign it, but they mentioned the ‘Force Majeure Clause’, which is a common clause in contracts that essentially frees both parties from liability or obligation when an extraordinary event or circumstance beyond the control of the parties, such as a war, strike, riot, crime, plague, or an event described by the legal term act of God(hurricane, flood, earthquake, volcanic eruption, etc.), prevents one or both parties from fulfilling their obligations under the contract.
I did whip through our standard contract, but didn’t find the words “force majeure” anywhere in the text, but it is probably in the Civil Code. In practice, most force majeure clauses do not excuse a party’s non-performance entirely, but only suspend it for the duration of the force majeure.
The CAR form suggests a 30-day extension, but whatever works for you. If the good-faith deposit is at risk, they are asking the sellers nicely to give it back to the buyers if they can’t qualify due to COVID-19 issues.
