Are You Ready to Make a Fortune Selling Other People’s Homes?
by Lauren Downey
Real estate agent with clients
The real estate market has been anything but certain in the years since the global financial collapse of 2008 and 2009. However, plenty of authoritative sources (including the Wall Street Journal and Forbes) are pointing to evidence of a rebound. Furthermore, internationally renowned investors such as Warren Buffet are becoming more comfortable directing their capital into real estate markets again. Generally speaking, economists cite the following indicators that property markets are ripening:
New housing starts are on the rise.
The number of houses that are pending sale (at least in the US) have increased by several percentage points.
- Housing prices are adjusting to become reasonably affordable compared to median household incomes.
- Mortgage applications have risen significantly.
- Mortgage interest rates couldn’t be more appealing.
- The supply of homes on the market is slowly decreasing.
- Real estate mutual funds are offering higher returns than they have in several years.
While none of these indicators signal a full-on recovery, they certainly offer hints to a strengthening housing market. This is excellent news for economies around the world, and it also presents opportunities for real estate agents. Given the potential boom in home sales that we could see in the coming years, this could be shaping up to be a golden age for real estate agents.
Is Real Estate the Right Business for You?
Bear in mind that since 2008, when bad mortgages in the US led to a devastating slump in the real estate market, a staggering number of homeowners around the world have found themselves under water. In 2013 alone, figures suggest that nearly 4 million home owners achieved positive equity for the first time since the collapse. As you can imagine, many of these people are eager to sell their homes and free themselves from what previously felt like toxic debt. These eager home sellers could end up being excellent customers for real estate agents.
Despite the fact that fewer homeowners are now underwater, housing prices in general are still highly affordable. This fact coupled with tantalizing low interest rates makes 2014 an excellent year to buy a home as well. As the recovery continues, housing prices are only going to rise. Needless to say, when anxious sellers meet eager buyers, real estate agents profit at every turn.
How to Make the Move into the Real Estate Industry
With that in mind, this is an excellent time to consider shifting careers and dabbling in real estate. But before you quit your day job and start renting office space for your new real estate venture, have a look at these tips on how to set up and operate a successful real estate business:
Know How Much It’s Going to Cost.
Unfortunately, real estate brokerage is not something you can simply step into without some start-up capital. In most cases, agents find a brokerage that will represent them, and then they split the sales commission with the firm. This is the most affordable model, as all you really need is the savings to keep yourself afloat while you are working on your first sale.
However, if you have more capital to work with, consider going with a broker that offers a desk fee. In this case, you pay for the right to operate through a particular real estate organization. This is a fixed monthly fee, and the brokerage in turn covers operational and overhead expenses (such as office supplies and access to computers). When you make a sale, you keep 100 per cent of the commission. If you have a gift for sales, you’ll start making big money as soon as your first sale clears.
Before Choosing to Go It Alone, Be Sure that You Qualify
Before opting to strike out on your, absorbing all the risk and positioning yourself to collect all the profits, be sure that you understand the local requirements for obtaining a real estate broker’s license. If you have never practiced as an agent before, you are probably not going to qualify straight out the door.
Lots and lots of leads, to be exact. Whether going it alone or joining an existing brokerage, you’re going to need access to a robust network of interested buyers and sellers. Fortunately, building a list of prospects is easier than ever, thanks to social networking platforms. Know who your prospective buyers are and find as many ways to engage with them as possible.
Do Your Homework
Even if you are a natural salesperson with the gift for gab, you’ll still have your work cut out for you. If you’re on a budget, invest in a few e-books on how to be successful in real estate. You won’t be the first person to have made their fortune in the sale of other people’s property, so there’s no reason to go it alone.