Entering into the real estate business as an agent, broker or buyer is very exciting but can be a little bit shocking for most people. Here are some of the misconceptions that the newcomers need to know about each aspect of the real estate industry.
Being a Real Estate Agent
Real estate agents need to complete state-specific training, courses, or licenses in order to be legal realtors.
A Large Income
Most new agents believe that the profession will grant them a significant boost in income and they will be wealthy extremely fast. But in reality, that is not the case.
When you are a new realtor it can be hard to gain new clients and your focus should be on building a good reputation with new clients. It is very likely that in order to get new clients you would need to lower the amount of commission you gain.
It is possible to become wealthy as a real estate agent, but it will be a slow process that you need to work very hard to reach. This is one of the main reasons why many new real estate agents fail.
When you choose a career in real estate, you are the one setting how much you will work. If you decide to start off as a part-time agent, it can make the process of gaining clients slower. On the other hand, if you jump feet first into the industry you can learn the most about the career and gain more from those experiences.
In most cases, as an agent, you’ll be working with a brokerage. They will help you with some training and be the liaison between you and either the buyers or sellers. A brokerage will also take a portion of your commission for their services.
The most effective way to build a clientele is to make yourself stand above your competition. Every realtor in your area is competing for the same potential clients and you need them to pick you rather than them.
When you have innovative ideas and are an effective realtor, that will spread to potential clients. You will need to stay on your toes to stay ahead of the competition until you have grown such a reputation that you can get your foot off the gas.
That doesn’t mean that your reputation is always stable because if you stop being a great agent, that will also travel fast and your clientele will know that too.
A large misconception that most clients have is that those with a lack of experience within the industry are worse at the job than the more experienced realtors.
That idea is incorrect. You can have far more knowledge than more experienced real estate agents and can do a better job than them. New agents may need to try harder to prove themselves to those with that perspective to break through that stigma.
When interviewing potential clients, make sure to show your strengths and be open and honest about how you are a great agent, even if you lack experience.
Choose Your Path
There are many ways to enter the real estate industry. Companies will hire you as a new agent or an experienced broker. It can be your decision to work independently or as a contracted agent.
When you are starting out, you should plan ahead and see what way you’ll want to grow as an agent or if you may want to become a broker.
Being A Broker
A broker is normally a position above real estate agents. There are different types of brokers and they have added responsibilities.
More Than An Agent
Being a broker gives you the added responsibility, but you can still act as an agent. You can work to earn commissions for people buying or selling homes and the biggest difference is that you do not need to share that commission with another broker, it would be all yours.
When you are moving from an agent to a broker, there are additional licenses that you’ll need to accomplish. You will need to think more about the business side of the real estate industry, for example, hiring agents or taking care of more financial decisions.
Homebuyers make up a large portion of the industry. even though they are not having careers in real estate, they are necessary for the rest of the industry.
How Location Matters
A misconception of buyers is that location is the most important thing when it comes to real estate. It is still a big factor you should look for when buying a home.
Other factors to keep in mind as a buyer are; the size of the property, cost of the home, and land for the property. You should also research the market to better understand if you should buy or sell right now.
Investing For Passive Income
If you want to have a profit in real estate, you will have to analyze the real estate market to act accordingly. If you want to just risk your finances and purchase property without having an understanding of the current market, it can lead to a large loss of profits.
If you are cautious and informed, you can make great profits from investing in real estate, but without that knowledge, it can be extremely difficult and risky to invest a large portion of your income toward investing in real estate.
Being a Landlord Seems Like A Full-Time Job
Being a landlord means collecting rent, maintaining the house, finding and screening tenants. Depending on the needs of your tenants, it can be an extremely easy job or a very busy task to keep track of. In most cases, the majority of your tasks can be done with the help of just the software.
Being a landlord does not need to seem like a full-time job.
House Prices Rising
Many people believe that the price of properties will continue to rise exponentially. The way the market functions is like a cycle, sometimes the market forces prices to rise and other times, properties are selling for much lower.
Real Estate is Moving From Brick & Mortar
Many think that the majority of the real estate industry is a brick-and-mortar business. This means that it is more focused on in-person businesses and not as integrated with technology. There have been ways that the industry has been moving toward the use of technology.
A great example of how it is the use of virtual tours and companies that specialize in showing properties, agents, and information about the real estate industry.
There are many misconceptions about realtors and the real estate industry from the perception of real estate agents, brokers, and those buying real estate.
There are ways to enter the industry as an agent and requirements that you might need to complete to be a broker. People who are buyers in the real estate industry also have many misconceptions about the current state of the real estate industry.
Taking the Next Step
You can contact us with any questions you might have, if you are interested in looking to buy or sell real estate, and if you want to learn more about the industry. We are happy to help!