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Why Do People Go Into Real Estate?
Yesterday I received a call from a guy who said he would like to talk to me about why people go into real estate. Did I have a few minutes to spare? Just some random guy seeking out a random agent, he said. For starters, I should say that happens because of my extensive exposure online, especially due to all of the articles I published over the last 12 years about homebuying on what is now The Balance. My voice somehow encourages a lot of people to contact me.
Unfortunately, there is no money in it to talk to some of these people. Every so often they want to buy or sell a house in Sacramento, but there are also telemarketers who want to sell me something. Lottsa luck there, I say; and there are people who genuinely do not know who else to contact. Or, maybe I am self delusional. I could be wrong. But I do try to help, regardless. They could be people who regularly contact strangers online to try to squeeze information from professionals for free. It’s better to think the best about people, because by thinking the worst, the worst has a better chance of becoming reality.
I feel an obligation to give back all the great pieces of knowledge I have acquired over the years. Self reflection helps. Engaging in open lines of communication; heck, just talking about it brings up ideas to analyze. But back to why people go into real estate.
This is not a new concept, but I truly believe many people go into real estate because they don’t fit well in any other occupation. Real estate is a business comprised of misfits. Losers, if you may. People with nothing else going on in their lives. Maybe they were fired. Maybe they quit job after job. Downsized. Dropped out of college. Or, simply aimless. Maybe they are like me and do not respond well to positions of authority. I resist every time.
Truth is to be wildly successful at real estate involves tremendous sacrifice. Many sacrifices. Intense focus. And running the business has got to come first. What? I know a lot of you are probably thinking, you know maybe that’s your take but that’s not my take. My family is always first. I say either you are deluding yourself or you won’t make it in real estate or both. It takes constant drive and self motivation, which makes it impractical to try to achieve balance.
If you want to make it into the big time in real estate, stop believing the myth you can have balance in your life.
Some people consider themselves wildly successful if they can sell one house a month. To me, that is the bare requirement to exist in this profession, and 90% of agents in Sacramento sell 12 or fewer homes a year. That is perfectly respectable for an agent, but it is not what I call wildly successful. Let me add there is nothing wrong about not wanting more that real estate has to offer. But the guy who called me wanted to know about extreme success.
My definition to become wildly successful in real estate involves production and sales volume. Most superstars on the lower end earn annually at least a quarter of a million, but I would imagine the average is closer to half a million. Agents who work in higher end markets easily make a million+.
People go into real estate to make money. To make a living for themselves. But it is hard work, long hours and involves a lot of rejection when you begin. If you have a pipeline for business, contacts that routinely feed you clients, you’re way ahead of most other agents. Some of us don’t rely on our “sphere of influence” i.e. people we know. We build our clientele from taking buyer calls, doing Floor, hitting the pavement to knock on doors and beg for work like some homeless person asking for a bowl of soup, holding countless open houses in the rain. We are too busy for lunch. You get the idea.
Fact is most agents do not make a lot of money. Only a few people who go into real estate will become millionaires. Along the way, you’ve got to develop a passion for the work, the people and focus on positive outcomes.
The secret to success is to always put your client’s needs above your own. Easy to say, hard to execute.
Further, to consistently produce a large volume of sales, one must also ensure the quality remains, the personal touch, the fact that clients feel they are my only client. It is a myth that agents who do volume cannot provide quality service, and agents who rattle that cage of nonsense are sucking on sour grapes.
People who go into real estate will tell you they want to help other people. If that were totally true, they’d volunteer at Loaves and Fishes or come up with some other brilliant idea to save the world. Of course, we will feel very rewarded by helping a seller or buyer, but it is extremely challenging to manage how others react to you. I often say I do not sell real estate, I manage people and their expectations.
Over the past 40+ years in real estate, I have created amazing transactions out of thin air, saved many folks from their own destruction and blazed an incredible trail in real estate. If I had to do it all over, I would. I am turning 67 this year, and still going strong in Sacramento real estate.
Why Do People Start a Real Estate Career?
Few people know that I bought my first real estate brokerage at age 26. That’s sort of an anomaly, especially for a woman back in 1978. It’s even odder today because there are so few young people in real estate. Why, according to the National Association of REALTORS, the median age of a real estate agent today is 57. I imagine, however, that due to the troubled state of our economy, that median age is about to change.
Why do people start a real estate career? I’ll tell you why but agents aren’t gonna like it. They go into real estate because they can’t get a job doing anything else. That’s the truth. They are misfits. They either can’t conform to the outside workplace or else they can’t get a job.
It used to be mostly the rebels who sought out real estate careers, because in the 1970s, an agent didn’t need even a high school education. It was only over the past dozen years or so that education requirements for brokers were put into place. Today, to get a real estate license in California, apart from passing an examination, applicants must also complete a series of 3 real estate classes and be fingerprinted / checked by the F.B.I. As long as a person doesn’t have an arrest record (and there’s some question about that), just about anybody can get a real estate license.
I came into the business because I was already had a real estate career as an escrow officer. I was swamped revamping deals by helping agents salvage their blown-up transactions due to 18%-and-rising interest rates when I suddenly realized I was on the wrong side of the business. On top of this, I had completed real estate and escrow courses, carrying 20 credits a year, through a community college in Orange County, California, while working full-time at a title company. Not your normal Sacramento real estate agent entry to the business.
But today, we have a wide spread of unemployed people, kids graduating from college who can’t find a job, no matter what. Kids struggling to make it through college who can’t graduate because they can’t get into the necessary classes. On the other end of the spectrum, we have the over-50 group getting laid off. Companies can hire cheaper labor if they can dump expensive overhead. There is little loyalty between employees and corporations. It seems that the majority of people employed full-time are those in-between the 20-year-olds and 50-year-olds.
This means we’ve got this huge group of young people and all of us older people who can’t find work. I see that Warren Buffet is concentrating on young people, trying to pull them into the business. That’s a smart move. That’s what I’m telling my niece to do. Go into real estate. Start a real estate career. She might find that she has a passion for the business. She’s outgoing, personable, smart and hard-working. She seems to gain considerable personal satisfaction from helping other people.
The money is nothing to sneeze at, either.
You hear that, Laura?
