Real Estate Updates: Matt's 1st Six Months
So here it is, six months into my real estate career. If you want to catch up on my ✨journey✨ thus far, go ahead and check out the other posts in this series including a breakdown of how I got started and a one-month check in. Well, now I’m SIX MONTHS in, and that means I’ve graduated from realtor baby to a realtor TODDLER, walking clumsily through people’s houses and saying my very first words! They were “escrow” and “usufruct.”
It’s actually been going pretty well so far. In just my first six months I’ve had five closings, which I mean… that is way more than I expected for just starting out. Honestly, since we already have this whole blog business (thankfully) going strong, real estate was only ever supposed to be a part-time gig for me (even though everyone says doing real estate part time is a surefire way to fail in real estate, more on that below). But just while writing this I’ve already had to break away twice to handle two minor crises on different deals, so you could say it’s definitely turning into a slightly-more-than-part-time situation.
One of my main intentions with documenting this real estate ✨journey✨on our blog was to be a resource for anybody who’s curious about the real estate business or considering starting their own career in it, so when I decided to write this update post I asked our Instagram friends to submit any questions they may have so that I could answer them here. I definitely got a couple questions about Beau’s and my sex life, but for the most part people sent some pretty good questions! So I went through and tried to pick the best ones to answer right here. And if you’ve got your own question, don’t hesitate to email me! Always happy to help however I can. :)
Do You Do it full time or are you just part time in real estate?
I kind of answered this above, but as promised I want to get a little more into this option as it’s a pretty major business decision.
So, I’d technically consider myself a part time Realtor at this point. I spend about 15-20 hours per week on real estate stuff (and then probably another 30-40 on blog/freelance/design work). But my tip on this is that if you’re just getting started out and you’re not also a blogger/Instagrammer whose clients already know about his other business through social media, it’s probably best not to describe yourself as “part-time” to any clients or potential clients. I’m definitely not saying to lie, but when you say “part-time realtor” your potential clients hear “unsuccessful realtor” and/or “realtor who won’t make me their priority.” And that is a totally unfair and inaccurate assessment of a new agent! So if you are part-time or need to start out part-time, I’m just saying it’s best not to really heavily advertise that, and I bet you’ll get your business to full-time status that much faster.
Can Real Estate be a “side gig” while working a 9-5?
Kind of a continuation of the above. It totally could be a part time gig while you work a traditional 9-5—after all, most clients are going to meet with you afternoons and weekends since they’re likely working 9-5 Mon-Fri, so you’ll theoretically be free at the same time to do real estate work. But lenders, title attorneys, inspectors, appraisers, and all the other industry professionals you’ll need to be in touch with are generally only going to be available during the week, when you’re working. So if you’re working a traditional 40-hour schedule, adding real estate on top of that may be difficult. From what I’ve seen, most people who have real estate as a second career generally have a more flexibly scheduled first job. But hey, maybe you join a team of realtors or get a partner, and they can handle things during the week while you take weekends! There are lots of ways a career in real estate can look.
Tips on getting started and finding clients?
There’s really no magic trick beyond putting yourself out there in any way you can! Host other agents’ open houses, consider joining an established team, create a Facebook business page, pin your business card on your gym’s bulletin board. And when you’re talking to someone and the conversation turns to real estate in any way (they’re thinking of moving, they say they love a certain neighborhood, they’re expecting a baby and not sure if their place is big enough) remind them you’re an agent. It doesn’t have to be annoying or heavy handed, just make sure they know you’re available to help if they need or want.
Did you have to study or take any classes to be a Realtor? Any costs to start your business?
Oh yes! Definitely! This may look a little different depending on where you live because real estate licensing and education law is governed at the state level. For me in Louisiana, it required a 90-hour pre-licensing course that costs $200-350. You can take this course either in person or entirely online on your own schedule.
Once you pass the course, you have to register for the state licensing exam, which costs $85 in Louisiana. After passing the exam, you get connected with a broker, pass a criminal background check ($40) and get your actual license ($90) and pay for legally mandated errors and omissions insurance ($136/yr). Your broker will also likely charge you a monthly office fee for their services to you ($25/month in my case). And then there’s the continuing education requirements. In Louisiana, you’re required to complete a 45-hour post-licensing course within your first 6 months of being licensed. That costs about $100. And thereafter, all agents are required to complete 12 hours of continuing education per year.
So that’s all to be a real estate salesperson. In most cases, you’ll also want to join the National Association of Realtors and your local and state Realtors Associations. This is what gives you access to your local MLS and allows you to call yourself a Realtor, which is not technically a requirement to work in real estate but in practice it’s pretty necessary. These fees are pretty massive but will look different depending on where you’re based; for me as member of the New Orleans Metropolitan Association of Realtors, it costs about $800/yr to maintain my membership.
Listen, that’s a lot of money! All in it was about $2000 for me to get started, but I made all that money back with my first sale and then some. Given the commissions you’ll earn even on lower cost houses (think, anything under $200k) can still be somewhat robust, you can more or less be confident that the money you’re spending to get into the business is going to come back to you, but just make sure you’re ready to shell out this amount of money in the first place.
What fees are typically associated with buying a house aside from the sticker price?
More money talk :) Yeah, so there are totally lots of fees other than just the cost of the house. If you’re like most people and taking out a mortgage to buy, your monthly payment will consist of the principal (the portion of the “sticker price”), but also the interest, taxes, and insurance on the house. Your lender can help you out by giving you a clearer picture of your monthly payment for different loan types and amounts.
But before you even get to that, you need to keep in mind the cost of inspections which together will run you several hundred dollars. Inspections are not required but highly recommended so that you learn any unknown issues the house may be hiding. Then you’ve also got your closing costs, which will vary depending on the price of the property and your choice of title company, but you can expect the closing to cost a few thousand dollars. Ask your agent to get estimates from different title companies and go with the one who can offer the best price.
Another optional fee is a rate-lock that you can pay to your lender. Interest rates on mortgage loans change all the time, but once you’re under contract on a house you can pay a fee to your lender to “lock in” a favorable rate so you don’t get stuck with a higher rate when it comes time for the actual sale. Ask your lender about this option.
What perceptions did you have going in to being a Realtor that came true or were way off?
You know, as a person with a fairly logical/analytical brain, I’ve been really surprised by the huge role emotions can play in real estate. My thoughts getting into the business (and the way I’ve tactically approached most of my deals) has been through market evidence and number crunching. But the reality is that angle doesn’t seem to be how most buyers, sellers, and even other realtors approach things. Of course I’m not the only person who takes a more analytical approach, but I’m learning more and more how uncommon that seems to be.
I’m working with a buyer right now, and we’re under contract on a house that is overpriced. We knew it was overpriced and anticipated finding some issues in inspections that could knock the price down. But the seller refuses to lower it for any reason, even though I’ve presented to the listing agent an analysis of the comparable sales in the last year, a 100-page inspection report listing the issues, and two detailed construction estimates saying what it would cost to remedy those situations. He wouldn’t budge! And that’s just how it goes sometimes. Even when faced with pages of evidence that the house is not worth what they’re selling it for, there’s an emotional drive there that’s making him insist on a higher price. And that’s just how it is sometimes most of the time.
What is the best and worst part about being a realtor?
The best part is that honestly, for all the administrative busy work of scheduling and emails and form-filling, the work is really very easy. Anybody who tells you any different either isn’t doing it right or is confusing the amount of work with the actual difficulty of the work. It is a lot of busy work. But I have found absolutely none of it to be very challenging, and for a non-creative second career, that’s ideal to me. The other best part has been working with mostly first-time home buyers and helping walk them through the process. As sappy as it sounds it’s honestly so cute and rewarding helping someone buy their first home. I tear up.
The worst part isn’t that bad as long you prepare yourself for it—but it’s that you can do a whole hell of a lot of work on a deal before ever getting paid. And sometimes if a deal falls through or never comes to fruition, you’ve wasted a bunch of time and never see any pay for it. As a commission-based career, you’ve got to close a deal to get paid. I learned this the hard way with a buyer who needed to sell their current house before buying. This isn’t uncommon, and you can make what’s called a predicated offer on a house—the offer being predicated on the sale of your current house. I gave this buyer every tool I could think of to prepare them to make a predicated offer but after weeks of showing them houses, they still hadn’t listed their house with me or any other realtor. They weren’t taking the steps to indicate to me that they were serious enough about buying, so finally after probably 10-15 hours of work for them over a month I had to make the decision to part ways. I’ll never get paid for that time, but in the grand scheme of things I think that’s better than having drawn it out showing them place after place forever.
So basically that’s what’s been going on with my little real estate journey. :) As always, reach out to me if you want to know anything else about the business! Here’s where I shamelessly plug my real estate website in case you’ve got any real estate needs that I can help you out with. K bye!