A vocational counselor writes Realty Times to ask if it is feasible that his client could make $100,000 in real estate in a couple of years.
Dear Ms. Evans,
I am a vocational counselor working with a woman who is going through a divorce, and wants to sell real estate. She has been a homemaker for several years, but she has a JD and a number of wealthy friends. She seems like good real estate material, and the stress of her divorce has made her sick of the law. Would it be unreasonable to, hypothetically, estimate that such a person might be able to earn an annual income of $100,000 in a couple of years?
Realty Times responds:
There are several attributes which assist real estate agents in their success, not the least of which are contacts, organizational skills, and perseverance. They must also have a source of capital so that they don't panic, if there isn't a sale for a month or two while they are getting started.
The reality is that most agents, as many as 80 percent by some reckonings, don't make it past their first year. The ones who do, make an average $36,000, but that doesn't take into account marketing and other costs, which most firms suggest should be about ten to twenty percent of earnings, which drops the new agent down to near poverty level.
The most successful agents are the ones who treat their real estate career as a profession, not as something to try, or fall back on. The ones who do make it big, appear to have something special, namely an ability to build business proactively instead of passively.
Passive business building is when an agent expects others to knock on her door. You can imagine how little that actually happens. Proactive business building, is when the agent knocks on doors to get them to open up for her. That's the quality your client is going to need. Is she willing to be aggressive in going after business? Is she going to be able to turn her new circumstance into a positive, and say to her friends, "This is what I'm doing now. I'm excited, and I want you to be excited for me. Do you know anyone who may be interested in buying or selling a home?"
Having connections is important because the wealthy people that you mentioned, are your client's "sphere of influence" and she will definitely need them while she's getting started. However, she also needs to remember all the people she comes in contact with daily, her favorite restaurant's owner, the dry cleaners, the banker, the shop girl. All of them have housing needs too. As business builds, she can start to prune her business for the type of market she prefers, but right now she can't be so choosy. And who knows, she may decide that luxury homes are her forte or, she may find first-time homebuyers, or seniors, or some other segment more rewarding to help.
She has a tremendous advantage with a law degree because she can provide legal advice as well as real estate advice. This may help your client develop a specialty such as financial planning, including real estate or rentals, or commercial investments. She'll certainly be able to spot a poorly written contract a mile away and be able to use that to her client's advantage.
Her own perseverance, entrepreneurial spirit, willingness to learn, and enjoyment of the daily grind of real estate will matter significantly in whether she hits the high water earning marks or not.
In short, if she is doing what she loves, the money will follow.
We say "welcome" and wish her the very best.
