Real Estate Broker and Sales Agent Career and Job Highlights
Real Estate Broker and Sales Agent Career Overview
The purchase or sale of a home or investment property is one of the most significant and complicated financial events in a person’s life. Because of this, most people tend to seek assistance from a sales agent or a real estate broker when buying or selling real estate.
Real estate brokers and sales agents become expert specialists of the real estate properties in their community. They are very knowledgeable as to which neighborhoods will best fit the needs and budgets of their clients, and are familiar with local tax and zoning laws. They are also proficient resources for clients who need help in obtaining financing. Some real estate brokers and sales agents even act as intermediaries between buyers and sellers as they negotiate property values and prices.
Real estate agents usually work as independent sales agents contracting themselves with a licensed real estate brokers. In return for their services, real estate agents are paid a portion of the commission earned from their sale of the property.
Brokers are independent businesspeople who sell real estate that is owned by other people. They may also be hired to manage or rent various properties by the property owner. Brokers who are selling a piece of real estate arrange for title searches, as well as meetings between buyers and sellers where the particulars of the transaction can be agreed upon, and the new owners can take tenure of the property. Real estate brokers may also help prospective buyers to obtain favorable financing which often makes a difference as to weather a sale will close. In some cases, the responsibility for closing a sale is assumed primarily by a broker or sales agent; in others, lenders, or lawyers take on the job. Brokers often work as supervisors overseeing agents who may share many of their same obligations. Brokers may also advertise properties, handles various business matters, and manage their own offices. Selling insurance, or practicing law may also be incorporated into their real estate business.
Agents and brokers spend a considerable amount of their time obtaining listings-agreements by owners in order to place properties up for sale with the firm. To determine a competitive price for the property, agents and brokers compare the property with similar properties that have recently sold. Both the agent who acquired the listing, as well as the agent who actually pushed and sold it, get a portion of the commission after the property has sold. Commission earnings are vastly increased when the agent sells and lists a piece of property him/herself.
Although a small number of specialty firms sell commercial, agricultural, and industrial types of real estate, most real estate brokers and sales agents sell residential property. No matter what type of real estate a broker or sales agent chooses to sell, they must be knowledgeable in the particulars associated with that specific type of property as well as the clientele that goes with it. A comprehensive understanding of business trends, property location and leasing practices is crucial when selling or leasing business property. And, agents working to sell or lease industrial properties must be keenly aware about the regions utilities, labor supply, and transportation practices. The sales agent or broker must be able to meet the client’s individual requirements no mater what type of property they are selling.
Agents often meet with potential buyers before showing them specific properties in order to get an idea of the particular type of home the buyers may be interested in. During their first appointment the agent determines how much the buyers can afford to spend, and may also ask the buyers to sign a loyalty contract stating that he or she will be the only agent to show houses to the buyers. Through use of a computer generate list, the agent or broker may discuss potential properties with the buyers giving them a description of the home as well as a location and an available source of financing. In some instances agents and brokers may possibly be able to use their computers to give buyers a virtual tour of various properties. In this way buyers can view floor plans, as well as exterior and interior images of the home without leaving the real estate office. Visits can then be made to those homes with which the buyers were truly interested.
It may be necessary for agents to meet several times to discuss and visit obtainable properties with prospective buyers. During these visits agents may point out and stress a property’s most applicable selling points. An agent giving selling highlights of a house to a young family may include laying emphasis on the convenient floor plan, close proximity to schools and shopping centers, and the area’s low crime rate. Agents selling to an investor may differ their approach pointing out the tax advantages to owning a rental property, and the effortlessness of finding a renter. When bargaining over a price, agents must learn to explicitly follow their client’s directives, presenting counteroffers in order to get the best price possible may also come into play.
After both the seller and the new owner have signed the contract, the responsibility to make sure that all the specific terms of the contract are met before the closing date falls to the real estate broker or sales agent. The agent must make certain that all of the mandated and agreed-upon inspections are arranged and take place. In addition, the broker or agent must see that any repairs or changes agreed to by the seller get done. Brokers and agents are becoming progressively more responsible to handle environmental problems as well. Often they are required to makes sure that the properties they are selling meet up to environmental regulations set for by the local area or state. For instance, lead paint in the interior of many older homes may need to be stripped and have new paint applied in order to comply with health codes and other regulations. Loan officers, attorneys and other persons may be assigned to carry out many of the details, but the agents must make certain that all of the jobs get done.
It has been estimated that about 99,000 jobs were held by real estate brokers in the year 2002; about 308,000 additional jobs were held by real estate sales agents. Several of these brokers and agents worked part time, involving themselves in other careers. And, the majority of real estate agents, almost 6 out of 10, were self-employed. Employment for real estate brokers and sales agents tends to be concentrated in large urban areas as well as smaller, yet rapidly growing communities; however, real estate is bought and sold in other areas as well.
Most real estate firms tend to be comparatively small. In fact, some are run by only one person. But on the other hand, some real estate businesses are large enough to employ several hundreds of agents, and own and operate a copious amount of branch offices. A large number of brokers have franchise agreements with either national or regional real estate organizations. This type of agreement enables the broker, for a reasonable fee, to use the more widely known name of the larger more established organization. Franchised brokers may also receive help in running their offices and training their staff; however, the success of failure of their practice ultimately still fall on the broker.
On average, real estate brokers and sales agents tend to be older than most other workforce personnel. In the past, the flexible and part-time work schedules attributed to the field, were found to be very desirable by many homemakers, and retired persons. Individuals interested in this sort of career found that they could enter, leave, and later reenter the real estate occupation, in accordance with their own personal circumstances. But, lately with increasingly complex technical and legal requirements, which raise startup costs for new agents, the appeal of part-time real estate work has declined.
Real Estate Sales Agent Training and Job Qualifications
Real estate brokers and sales agents working in every state, as well as the District of Columbia, must be licensed. Upcoming agents must be at least 18 years of age, and have graduated from high school. Completion of a written test is also required. The examination given to brokers is more comprehensive than that given to agents. Agents are tested on basic real estate transaction as well as various laws that may affect the sale of different properties. in addition most state are requiring aspirant agents for the general sales license to complete 30 to 90 hours of classroom training. Individuals interested in obtaining a broker’s license will need to spend 60 to 90 hours in formal training and an addition amount of time, typically 1 to 3 years, gaining experience by selling real estate. Applicants possessing a bachelor’s degree in real estate, may find that in such a case some states will wave the experience requirements for the broker’s license.
Typically state licenses must be renewed every 1 to 2 years. Most often there is no additional examination required for renewals. However, continuing education for license renewal is required by many states. Potential brokers and sales agents should get in touch with the real estate licensing commission of the State in which they wish to work in order to confirm exact licensing requirements.
Real estate transactions continue to become more legally complex. As such, many real estate agencies are filling vacant positions with college graduates. Today, a vast number of brokers and sales agents have at least some college training. Helpful college courses include those focused on business administration, economics, real estate, statistics, law, English, and finance. Courses in accounting and marketing may also prove helpful to individuals intending to start their own company.
The personality traits of a broker or agent are just as important as his/her academic background. Businesses look for candidates who are honest, and who enjoy a pleasant personality, and a clean-cut, tidy appearance. In order to motivate and excite customers brokers and agents need to be enthusiastic, trustworthy, tactful and mature. This is a highly competitive field and there is little room for mediocre representatives. Agents ought to be well organized, detail oriented, and have a clear memory of names, faces, and business specifics.
Oftentimes real estate agents begin their careers in their own communities. This can advantageous to agents whose knowledge of local neighborhoods and areas of interest in well based. New agents beginning in this field can gain practical knowledge and understanding under the direction of more experienced agents. In this way they learn valuable techniques in obtaining and locating lists of available properties, and in identifying various financial resources. Also, they are well versed in the use of computers.
Formal training programs for both beginners as well as experienced agent employees are offered by many firms. The programs offered by larger firms tend to be more extensive programs than those provided by smaller firms. Currently, there are over a thousand colleges, universities, and junior colleges offering courses in real estate. Some provide associate’s or bachelor’s degrees in real estate, and other offer many other advanced degrees in a similar area of study. The National Association of Realtors encompasses many local real estate associations who may sponsor various courses which cover basic fundamental and legal aspects pertinent to the field of real estate. The National Association of Realtors also provides advanced courses in property development, mortgage financing, management, and other subjects.
Higher commission rates may come through various advancements made by agents. Agents become more efficient in their business dealings and the number of transactions they are able to complete in a given amount of time as they gain experience, knowledge, and expertise; and as a result their earnings increase.
Experienced agents working in large firms can advance to sales manager or general manager. And, persons who have obtained their broker’s license may advance towards opening their own offices and administrative centers. Other experienced brokers who have received training in estimating property value may go on to become real estate appraisers. And people customary with the operating and maintenance requirements of rental properties may possibly advance to become property managers. A comprehensive knowledge of business settings and property values in their specific area of work may cause experienced agents and brokers to enter real estate investment counseling or mortgage financing.
Real Estate Brokers and Sales Agents Job and Employment Opportunities
It is expected that employment opportunities for real estate brokers and sales agents through the year 2012 will grow slower than the average for all other occupations. Potential job growth is thought to be limited by a continuing use of information technology which will persist in raising the productivity of existing agents and brokers. In addition more and more prospective customers are using internet resources to conduct their own property searches. Progressively more real estate companies are using computer-generated images and virtual tours to show houses to their customers. In this way they can do much of their work without having to leave their office. Cellular phones too are allowing agents and brokers to become increasingly capable of taking on a larger number of customers as they are able to send and receive sizeable amounts of data with little inconvenience. Nevertheless, personal services supplied by real estate agents and brokers including the actual sale, are still sought after by most people. The use of technology may eliminate jobs for agents working in marginal positions, such as those temporarily between jobs or who may be practicing real estate part-time. Disclosure laws and other changing legal requirements may also discourage some agents from continuing part time work. However, the need for experienced real estate brokers and agents will remain.
Due to the increasing housing needs of a growing population and the persisting opinion that real estate is a god investment, real estate brokers and agents will continue to maintain some employment growth. Real estate sales should continue to be stimulated by low interest rates, and a large number of jobs will arise as retirees and others who leave the workforce have need of replacement. The field of real estate is relatively easy to enter and is appealing to many types of people who find the flexible working conditions, and potential for high earnings most desirable. However, beginning agents and brokers must be prepared to face extensive competition from ingrained, more experienced agents and brokers as they attempt to obtain listings and to close an adequate number of sales. Competent, skilled, determined people who take pleasure in associating with a vast variety of people and in selling their product, especially those who have far-reaching social and business relations in their communities, will have the greatest opportunity for success.
Often the employment of real estate brokers and sales agents is susceptible to swings in the economy, especially as it pertains to interest rates. The number of sales and the resulting demand for sales workers falls during periods of declining economic activity and elevated interest rates. Many, during such dips of depression, choose to leave the occupation altogether, while many other agents and brokers are forced to decline or to work fewer hours.
Historical Earnings Information
Salaried real estate agents made median annual earnings of $30,930 in the year 2002; this included commissions. Between $21,010 and $52,860 per year was earned by the middle 50 percent. And, the lowest 10 percent made less than $15,480. The highest 10 percent of real estate agents made earnings of more than $83,780.
Real estate brokers working on a salaried pay in 2002 had annual earnings of $50,330 including commissions. Earnings between $29,2240 and 90,170 were made by the middle 50 percent. And, the lowest 10 percent brought in less than $17,920. The highest 10 percent made annual earnings of more than $145,600. It is not uncommon for successful real estate brokers to earn anywhere from $10,000 to $500,000 a year.
Real estate agents and brokers make the vast majority of their earnings through commissions on various sales. Commission rates vary according to various fees agreed upon by the agent and the broker. The type of property, and it’s value must also be taken into consideration when deciding upon commission rates. Most often, farm and commercial properties or sales of unimproved land bring higher percentages than those made from selling a home.
In some cases commissions my be split up among quite a few agents and brokers. When a piece of property is sold, the broker or agent who obtained the listing and the broker or agent who made the sale usually share the commission. If they are employed by a firm, then the company make take a part of the commission earnings as well. Agent’s shares vary from one firm to another, but generally they are given about half of the total amount received by the firm. Commissions are capitalized on when agents both list and sell a piece of property.
Although average income earnings typically increase as an agent gains experience, economic conditions, the type and location of the property, as well as individual ability also dictate the amount of increase an agent will have. In the beginning new agents often find earnings to be irregular. One month they may have an abundance of sales, and then the next few months, nothing. Although a few brokers allow agents to draw from a special account against future earnings, this benefit is not usually provided to new employees. Because of this, agents should save up enough money to support themselves for about 6 months or until commissions increase. In an effort to broaden their contacts and increase their earnings, agents can expand their associations through membership in local real estate associations and participation in community organizations.
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