Seems there are people out there who are still determined to many money in real estate. So says an article in the Sunday NYTimes.
Two words for them: Good luck.
While I admire their drive and ambition, having been there and done that, I can honestly say that the odds are that this young woman will be getting a reality check in her name much sooner than an actual paycheck:
“I’m a very self-sufficient person,” she said. “I did my clothing line because it’s my passion, my creativity, how I express myself. I’m doing real estate for money. To fuel my passion, I need money.”
Ms. Tomas made $47,000 a year at H&M; as an agent, she said, “I’m looking to make twice that, if not more.”
Expectations, however, can be a mismatch with reality.
“I ask them, ‘What are people telling you you’re going to make?’ And they say $250,000 — in their first year!” said Olinda Turturro with a laugh. She is the director of recruiting at Bond New York, a midsize brokerage that employs about 200 sales and rental agents.
Recruiters for brokerage firms say that a new agent can expect to earn about $50,000 a year.
I'd say that $50K in the first year isn't even that realistic. Consider the source: It's a recruiter talking, and $50K sounds like okay money for a first year agent, right? I'd say the reality is more in the $30K range. And this is before taxes.
Several colleagues of mine from the biz would definitely agree, and we're talking hard-working, educated, driven people, not scrubs who stumbled into this line of work because it's easy to get into and less messy than burger flipping.
This is more realistic:
The journey from contract to closing can drag on for months. And even longtime agents may not close any deals for weeks on end.
Kevin Ryan-Young, 45, a former arts administrator and stay-at-home father, closed his first sale in December, six months after starting as an agent at Bond New York. So far, his take has been in the low four figures. “There’s not a lot of money,” he said. This despite working 10 hours a day for six or seven days a week.
His experience is not atypical.
“Someone coming into the biz, who is going to focus on sales from Day 1, should have at least a six-month nest egg, and it would probably be better to have more than that,” said Stephen Love, a longtime broker who directs recruiting at Ardor New York Real Estate.
“I see it happen all the time,” Mr. Love continued. “People come in without enough money behind them. They find themselves in a situation where they become highly anxious and it can be a downward spiral. It affects you mentally. Your bills are coming due every 30 days and you’re not making any money.”
Yes, been there, done that. Luckily I had backup, but even that backup wasn't the sort of thing I liked relying on day to day or month to month. Let me put it to you simply: It's incredibly disheartening to work your ass off seven days a week and see NOTHING. Not a single dollar. And yes, this can and does happen in real estate.
People think they can get into RE and have time to pursue their hobbies, passions, and volunteer to do benevolent things like help homeless pets. However, the most successful agents are constantly on call. The job never really ends. Weekends aren't yours--they belong to customers and brokers who need to see available properties. That wouldn't be so bad, but weekdays aren't yours either, as those same customers and brokers expect agents to be around daily to attend to their needs. Don't believe me, newbie agents? Just try taking a day off and see what happens. The work can become quite all-consuming and exhausting pretty fast.
It's a devil's deal, in my opinion. Perhaps if a person actually makes good money, the tradeoff (your life for money) is worth it. Maybe they can bank the money and eventually pursue other interests and have a real life again. However, the odds are in favor of a lot of hard work and an income that's not in at all in proportion to the work one puts in. In other words, totally suckage for as long as one is willing to put up with it.
Sounds like a whole new batch of rookie brokers are about to learn that hard, soul-sucking lesson. Good luck.
