Forget what you’ve heard. Here are some sobering thoughts for would-be agents.
It seems like every other person you meet is running out to obtain a real-estate licence these days, including the gas-station attendant who filled up my car last week. The numbers don’t lie: There are now upwards of 40,000 agents in the GTA alone, which is about double the Toronto Real Estate Board’s (TREB) count from just a decade ago. Even if everyone you know is jumping into home sales, it’s still worth carefully considering the costs associated with the business.
First off, getting into real estate isn’t cheap. When you work on 100 per cent commission, you have to be prepared to endure some pretty lean years at the outset. I blew through my life savings in the first 12 months of my career, and took out a massive line of credit. Imagine my surprise when I grossed $6,000 in that first year. Those who believe being an agent is an easy path to a lucrative, relaxed lifestyle are destined for disappointment. If you’re going to leave a salaried position (with security) to spend $20,000 to get started on a path with no salary, and where up to 40 per cent of every cheque goes to the brokerage that holds your licence, I suggest you take that decision seriously.
Deciding which brokerage to work for can also make or break your career. One might offer you a reasonable split in your commission, but can they offer you anything else? I decided to work for a “brand name” company—Bosley Real Estate. It’s been in business for over 80 years, the agents are well-respected, and our management team is composed of former high-ranking people at the Toronto Real Estate Board. I’m one of the lucky ones, but naïve agents who are still finding their footing can be lured in by attractive commission arrangements at brokerages with no history, no management, no training, and, sometimes, no brick-and-mortar location. Without prior real-estate experience and a reputable brokerage, you’ll be left with no real professional support.
It’s important to have realistic expectations about the lifestyle, too. A real-estate agent’s day-to-day is glamourous on television, but even after 10 years in the business, I still work at least six days a week. I’m on my laptop every night until 1:00 a.m., after my wife goes to bed, and I’m never home before 8 p.m. I’ve missed dinners, birthdays, and holidays, but I keep coming back for more—that’s what this job demands. Recently, a new agent in my office said, “I want to be home every night by 5:45 p.m. to have dinner with my partner.” My response was along the lines of, “You won’t have an issue doing that…when you get another job.”
Being self-employed means you’re your own boss, but people rarely fire themselves. Those who fail in this business never look inward and admit they didn’t give it their best effort; instead, they blame their brokerage, their clients, or the market.
Based on stats alone, Toronto real-estate agents are now a dime a dozen. Those who are good at their job, who are true professionals interested in making a career of it, are rare. All I can say is they probably really considered the risks before hanging out their shingle.