Wednesday, November 30, 2016

Special Report: How real estate agents feel about their careers

Perhaps there are some days when former executives rue leaving that cushy corporate job for an uncertain career in real estate, where public perception leaves something to be desired. But they have found good reason to stick around.

This survey, which asked participants, “How serious are you about your real estate career?” reveals that real estate agents and brokers are no academic slouches, and most love what they do, regardless of how they got here. Nearly 50 percent hold bachelor level degrees, 17 percent have associate degrees, and 14 percent claim a master’s.

Many come from impressive jobs in business, finance, sales, law, IT, health care, education and the military.

Respondents, more than 900 total, are believers in continuing education — the vast majority take classes of some sort or accept mentoring.

Download the report with full findings here

What first drew these individuals to real estate? A number of respondents said they fell in love with the real estate process when they were buying a home themselves and either liked the experience or felt they could do it better.

An entrepreneurial rookie agent in Ohio describes how it ticked the box for him.

“It gave me the option of having a small business but with support,” he said. “I wanted a career in which I could serve others, but I also wanted the flexibility to set my own schedule, goals and methods.”

The vast majority of respondents are enjoying their real estate career and expect to stay until retirement. The greatest pleasure they get from their work, they said, was delivering value to clients; they are also driven by doing interesting, challenging work that gives them a sense of accomplishment, and they wanted to be respected and valued.

Answer choices from top to bottom: Helping my organization excel and grow; Having a strong relationship with my coworkers; Receiving the salary I take home; Feeling I am making a difference in the world; Doing interesting, challenging work that gives a sense of accomplishment; Being respected and valued; Delivering value to customers/clients; Being the best at my chosen field and winning clients; I don't get any pleasure from working

Answer choices from top to bottom: Helping my organization excel and grow; Having a strong relationship with my coworkers; Receiving the salary I take home; Feeling I am making a difference in the world; Doing interesting, challenging work that gives a sense of accomplishment; Being respected and valued; Delivering value to customers/clients; Being the best at my chosen field and winning clients; I don’t get any pleasure from working.

It is abundantly clear, however, that these educated agents (more than half of whom boast 10-plus years of industry experience) do not feel respected and valued and would like to see local associations and the National Association of Realtors (NAR) do more about it.

Helping promote the real estate image to consumers more clearly and banishing the inconsistent “part-timers” who are bringing the industry down, in their view, should be top priority.

Industry benefits from the skills of experienced execs

Respondents’ dissatisfaction with the status quo and public perception is not surprising. Nearly 70 percent of survey participants come from other professions that often have a better image among consumers.

Our research found that 9.10 percent came from business, 6.99 percent from banking/finance, 6.88 percent from retail, 5.55 percent from management, 4.99 percent from computer/IT and 4.55 percent from education.

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Others had experience in customer service, architecture, interior design, education, hospitality, the law and the military, which they said was useful for them in their real estate careers.

Thanks to these previous working lives, they also have strong negotiating abilities, finance and transaction savviness, people skills, and the chops for running a small business.

“It’s very important to understand real estate is a business, not a hobby,” said a CEO from Austin, Texas, with a finance/business background. “Experience in other fields helps.”

The perks of having a career before real estate

Business and project management

A Georgia-based agent with a master’s degree said in her previous business career she learned to “manage projects, deadlines, play nice with others, manage my time and understand the value of long-term investment with time and relationships.”

A rookie California agent with a background in production and manufacturing said a project management and public outreach background was a perfect fit for a career in real estate: “I feel like real estate is, at its core, a project with all of the complexities which come with managing a project represented — including finances, relationships, schedules and tasks.”

Finance

A background in finance can help you present as a polished professional from the beginning. One experienced Colorado broker with a banking/finance history said that knowing the numbers and how clients were getting their money makes a huge difference.

Airline pilot

Moreover, a former airline pilot has found that skills like following through on details, checklists, remaining calm under pressure and being a leader all carry over into real estate.

Sales

Any kind of sales background is a plus, of course. One new California agent who did solar system sales previously said a former job delivering short presentations has been extremely helpful in being able to meet strangers and convert them from “cold leads to closed deals.”

“It taught me a lot about how to handle people and what they like to hear.”

Information technology (IT)

Meanwhile, those with a knowledge of IT can certainly make a splash in real estate quickly if they have other relevant skills.

This experienced agent from Ontario said: “My IT background allowed me to leverage tech tools at our disposal much more quickly and effectively than many other agents.”

But in some rare cases, your background can hold you back. A Texan respondent who had an IT career first explained: “Online lead generation experience is a big bonus for me. However, I’ve learned that I must get on the phone and prospect from 7 a.m. to 11 a.m., and no amount of hiding behind technology will help me make phone calls. Therefore, this experience held me back for years.”

Entrepreneurs

Entrepreneurs can be especially suited to real estate. An experienced broker from Buffalo, New York, said: “I use a variety of my experience in my real estate career. My technology background makes my company efficient. My sales background generates production and my entrepreneurial background keeps me going through the tough times.”

Another experienced broker added: “Being an entrepreneur has helped me be a self-starter and remain motivated to take risks and accomplish goals.”

Health care and education

Meanwhile, those who bring softer skills gained in the health care industry and education realm should not be underestimated.

Said this experienced agent based in Virginia: “As a former teacher, I take those skills in educating my buyers and sellers in the real estate process. I hold their hand throughout the entire process so there are no surprises, just like I would inform my students so they were prepared for a test.”

A successful North Carolina broker found an earlier social work career has worked well in real estate, too, and noted the application of counseling and listening has come in handy “countless times.”

Agents want to be viewed like CPAs and attorneys

When asked how they felt about the status of the real estate agent and how it might be improved, many respondents expressed a desire to be viewed with greater respect by consumers.

One described general perceptions of an agent career as just a step up from “a cashier at Walmart.”

“I think it is often embarrassing to be a Realtor because of the reputation that it has with the general public,” fumed one experienced Colorado broker. “I can’t believe the insulting ad campaign that NAR is running with the actor from Modern Family. They chose him to represent our profession — really!”

Another seasoned agent, who used to be in business, bemoans the fact that agents are “far down the list of respected professions.”

“We are our own worst enemies. I read an article that NAR tweeted out the other day. It basically told buyers when they go to open houses, answer all the listing agent’s questions and give away motivation. Mind boggling.”

“Also, at least where I am, we use self-policing and expect brokers to discipline agents that pay their bills. It just does not work. I suggested a system to the president of our governing body, which is the same that many companies use, and was told it was too big of an idea.”

“There has to be an appetite from within to change our reputation, and I just don’t believe there is,” the agent added.

A broker respondent thinks the status of real estate professionals is pitiful — “a disposable career” — and as long as brokerages have the incentive to hire as many agents as they can, rather than hiring quality candidates, professionalism in this industry will not improve.

One rookie agent and former entrepreneur based in Portland, Oregon, would like to see the image of the agent evolve from a salesperson to adviser, “People deserve a true professional adviser who has their interests first. It’s almost impossible to have the public believe you have their best interest when we get paid like a salesperson and also market like a salesperson.”

An Idaho agent in the survey, with a strong business background, hesitated entering the industry because of its bad image. But one way to be taken more seriously is to expand your skill set and add letters after your name, suggested one respondent.

“The tools are there for the agents and brokers,” the experienced Oklahoma agent said. “For example, I have my ABR, CRS, GRI, SRES, Realtor, and At Home with Diversity, to date. Continuing the learning process to keep one’s knowledge and mind up to date is a good idea.”

How to show the consumer you’re capable

As it stands, the qualifications required to enter the industry are so negligible (90 percent of respondents passed their licensing exam the first time around) that it is hard for real estate professionals to argue that they have jumped through the same hoops as attorneys and doctors, because they haven’t.

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“Compare it to being a school teacher, appraiser, attorney, doctor or engineer,” said an experienced Missouri broker. “Agents have the potential to make the same pay as these professions, yet our license is practically available with the purchase of a box of Cracker Jack.”

The best that agents maintaining high standards can do is to be judged by their actions and their professionalism both by their peers and clients — and educate the consumer more. That’s the argument put forward by a number of respondents.

As a former entrepreneur, now seasoned agent, in California puts it: “Real estate has a black eye in the eyes of the consumer, and we have only ourselves to blame. We have failed to educate the consumer on how to find a qualified professional Realtor for their needs.

“They often choose an agent based on personality, not qualifications, which is very sad. It allows those agents who are unqualified to prosper at the expense of the consumer. There are several gaps in our industry, but I feel this one could be changed with ease and make a difference in our industry.”

A broker from San Jose does not feel secure in the industry: “Unfortunately, I still feel somewhat like a commodity that can be traded at will, via online portals to the highest bidder for ZIP code leads. Referrals are nice and always make the best clients but I’m finding them harder and harder to come by.”

Similarly, a new Denver agent said: “The internet often is my competitor — it’s about making yourself more valuable than the internet.”

Professionalism prevails in certain markets

In some markets, professionalism is just expected among real estate agents doing the deals, so some of the concerns about public perception appear to be worse in certain locales than others.

This experienced Palo Alto agent said that locally, the better agents are seen as professionals comparable to stockbrokers and attorneys, adding: “We are service providers and my clients value the insight and analysis I provide regarding their buying and selling decisions.”

Another respondent parsed the difference between professional agents (whom the broker feels people respect for the most part) versus the profession as a whole (where that respect isn’t necessarily there).

But putting a spotlight on rockstar agents doesn’t do the industry any favors, alleges a recently licensed New York agent: “I feel there is a great deal of narcissism in the industry. That status can be improved by instituting a client-centered approach and move away from the notion that the agent is the superstar in the transaction.”

Advice for taking action

A number of suggestions were put forward in our research — some new, some well-worn — for raising the status of the real estate industry.

Extended oversight and training

This experienced Florida broker summarizes the thoughts of many: “Professional status is relative to competency and performance. How to improve it is by increasing entrance level competency training and elevated post-licensing training.”

Providing all new agents with a mentor who can help protect them from mistakes borne from limited training was one idea under the umbrella of extended oversight.

A seasoned Austin broker suggested training fewer agents at a time and to have a broker/apprentice program to stop agent churn.

Minimum standards

Another group pushed the idea of agents having to do a minimum number of transactions in order to stay in the industry. Part-timers and hobbyists led to an inconsistency of service, they said.

“We need to make it much tougher to get in, discourage the part-time agents to stay in and make fees high enough that if you are not doing a significant amount of business, it doesn’t make sense to stay in. Then, and only then, will the public’s perception of us start to change,” said an experienced Arizona agent.

A North Carolina broker added: “The only actionable solution from my position at this point is to seize market share and drive the lower level agents out of business.”

Changing role

One veteran Illinois broker feels positive about the changing role of the agent: “My hope is that the profession will be seen less as sales and more of a management platform as we primarily manage people’s expectations and the overall sale/purchase process. We are not here to talk a consumer into a product they do not wish to have; we are here to guide them on how to accomplish their goal.”

At the same time, consumers need to play their part, added a Massachusetts Realtor: “I believe that Realtors are just as important as finding a lawyer, doctor, or any other professional. One must do their own due diligence in seeking out the right help just like with anything else.”

One of the things that needs fixing is the enforcement of ethics, said a number of respondents; an experienced broker in California suggested that ethics requirements should be enforced more openly because “secret grievance hearings and secret penalties” are not designed to incentivize improvement.

Continuing education, an important component

The most immediate action that can be taken in the industry is offering strong continuing education (CE) opportunities, which will boost real estate’s professionalism and reputation, said survey respondents.

The research showed that almost 98 percent of respondents took CE courses in some shape or form — either through their brokerage (38.07 percent), Realtor association/MLS (33.63 percent) or college (8.32 percent).

Nearly 15 percent (14.87) accept mentoring from a fellow professional.

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Moreover, the majority (57.94 percent) of agents and brokers typically take both online and live CE classes.

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Close to 60 percent (58.6 percent) do CE every two years, as their state asks them to, and 17.20 percent participate in CE annually.

“Continuing education is a great start,” said an experienced New York state broker. “I feel like (new agents) when they are licensed, they feel they know it all and don’t want to attend until they have to. The classes should be more interactive to keep the attention of the scatter-minded, multitasking real estate agent.”

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Julie Nelson, trainer and coach with TheNelsonProject.org and a licensed Realtor with Keller Williams in Austin, Texas, completed the survey and spoke to Inman about the findings.

She believes that agents should do a Business 101 course early on to really get a grasp of what a real estate career is all about.

“The class that doesn’t exist, that should be required for the license, is how to make it in the business of real estate,” she said. “When you get your license, all the training that is taken is to pass the test — there’s very little real-world practical application on how to survive as a business.

“Honestly, if presented in a very realistic way, ‘here are the fundamentals of this business,’ some people who might opt out, they would opt out earlier, and we’d be doing them a favor.”

Lead generation should be a key part of this class, added Nelson, who works with new and emerging agents.`

“You could be one of the best Realtors out there — smart, savvy, good with people, know your market — but if you don’t have clients, you have nothing,” she said.

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As someone constantly leading continuing education and looking for new course ideas, Nelson would like to see a broader range of courses for small business owners.

As for the much maligned part-time agents, she points out, some entrenched full-time agents who do not keep up to date with the latest regulations can damage the industry in their own way.

“More trouble can come with people who have been in the industry for years and think they know it all,” she said. “The folks who have been around for a long time and are just hobbyists, not staying current and think they know everything, can make for a challenging transaction.”

Is the industry ready to roll up its sleeves?

While respondents were generous in their criticism of the industry, not all were as generous with their willingness to get in there and make change happen.

As one put it: “I just don’t care. I have an extremely low opinion of the industry. I’m here to get in, make my money, and get out.”

However, two-thirds said they would like to have a greater influence in the industry, rather than just taking their money and running. This is heartening, as 92 percent of respondents intend on staying in the real estate industry until retirement.

Answer choices from top to bottom: Yes, would like to have greater influence on the industry; No, would not like to have greater influence on the industry; I already have a great deal of influence on the industry.

Answer choices from top to bottom: Yes, would like to have a greater influence on the industry; No, would not like to have a greater influence on the industry; I already have a great deal of influence on the industry.

A managing broker from Washington said she would like to add her voice to building a business model that “elevates our status as professionals” and to “eliminate the perception/expectation that Realtors are pop tarts working 24/7.”

An experienced Austin, Texas broker, was willing to step up and noted that part of the problem is that real estate leadership doesn’t acknowledge the gap in professionalism.

Being a changemaker is important to staying relevant in any industry, said one respondent. And real estate drives the economy, so it’s important to be part of it, added another.

A new agent from Charlotte, North Carolina, with a background in management said: “I don’t think that anyone has a right to complain about current standards of behavior or treatment if they are not going to do something actively to try and bring reform to it.”

Real estate boards need fresh blood to initiate real change, argued a seasoned New York state broker, noting that boards tend to lean older and “there is so much more that can be done” to bring in fresh talent.

“There are new ways of ‘doing business,’ which the older establishment does not seem to appreciate,” said a seasoned Houston agent. “It is something that needs to be addressed to attract younger Realtors.”

And the industry needs more input from those still “in the trenches;” those caught up in the politics of the upper echelon sometimes fail to see the full picture of a market, so that’s why the input of full-time realtors is invaluable, according to one experienced broker associate.

“We have become bloated through bureaucracy and timid in our response to change,” said a Keller Williams broker, who wants to be involved at a higher level to help lead the change. “Simplicity is the answer — a massive effort must be made to scale down the backbiting and bureaucratic red tape. This would bolster the industry’s ability to pivot in response to changes.”

Some respondents felt the change that the real estate industry has experienced already in recent years makes it an exciting place to be — namely in the tech realm over the last 10 years, while others saw an opportunity to take back some power from tech giants like Zillow.

Reaching retirement before burnout

Sometimes, becoming involved in the industry at the board or state level can be difficult because there are only so many hours in the day.

Among respondents, close to 50 percent were working 50 hours or more every week. A number of people in the survey said they “force themselves” to take a day off a week and need to hire an assistant.

People are using meditation, exercise, spas, vacations, as well as separating the personal from work with time-blocking to stay on course.

The survey asked at what age respondents were planning to retire, and answers were wide ranging. More than 50 percent intended to wind down between the ages of 60 and 75, however.

The most popular retirement plan among respondents, besides “other,” was an individual 401(k) (16.87 percent), followed by personal savings (15.98 percent), SEP IRA (14.87 percent) and “I don’t have a retirement plan” (8.99 percent).

Only 4.88 percent reported having a retirement plan based on franchise/brokerage revenue or profit sharing.

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Moreover, over a third of respondents reported being on a health care plan provided by their spouse’s employer (33.07 percent), while another 27.08 percent obtained their plan on the state/national health care exchange. A little over 7 percent (7.21 percent) said they weren’t on a health care plan at all.

Answer choices from top to bottom: I use the health care plan provided by my spouse's employer; State/national health care exchange; Other; I don't have a health care plan; My brokerage offers and pays part of my premium; My brokerage offers, but I pay all of my premium; Don't know/not sure.

 

Answer choices from top to bottom: I use the health care plan provided by my spouse’s employer; State/national health care exchange; Other; I don’t have a health care plan; My brokerage offers and pays part of my premium; My brokerage offers, but I pay all of my premiums; Don’t know/not sure.

When asked how they were avoiding burnout, a number of respondents said being in a team helped them step away from the business more freely (a quarter of respondents were on a team.)

“Being on a real estate team is great. You just have to ask for help,” said a broker associate who’s been on a big team in Denver, Colorado, for three years and manages a daily workout.

You have to be open to delegation, added one Illinois broker working in the family business for many years: “I have overextended myself and have learned that is not a good place to be when striving to provide quality service. I have learned to delegate and am always on the lookout for agents that I can groom and grow to take my place.”

It’s easier said than done, said this successful Washington, D.C., agent: “I am constantly trying to evolve and put better systems and processes in place. If anyone knows someone who can clone people yet, that would be ideal. The next step will be hiring an assistant or buyer’s agent. It’s just so hard to trust people in this industry.”

Doing too much can lead to relationship breakdowns, respondents revealed, so it needs to be taken seriously.

What other careers would agents consider?

Could respondents imagine doing anything else besides navigating the thrilling, risky, flawed but opportunity-rich world of real estate?

None in the survey seem to be seriously considering leaving the industry, but they came up with a few alternatives: wedding planner, interior designer and even rodeo clown.

“Skydiving instructor or a safari guide. These are two jobs that would give me the same rush as knocking on doors to meet complete strangers and strike conversation of selling their home,” said a new Texas agent.

For some, it is like a vocation; they can’t leave real estate now that they have found it.

“It is about the feeling of security that it brings to own your own home,” said a Massachusetts Realtor of more than six years. “There are many people who don’t have this opportunity and who never will, so to be able to assist someone in finding that piece of comfort and happiness is a satisfaction that I feel deep within my core.”

Meanwhile, don’t let the thought of other, more highly respected careers out there get you down if you are doing things your way and succeeding.

“When done right, that lack of education doesn’t matter — I make far more money in this industry than a lot of doctors and careers that need years of education,” said an experienced broker from Oregon. “Also, for 20 years in real estate, I have been my own boss, and I love that.”

Inman conducted the survey between Nov. 9 and Nov. 15, 2016. There were 901 respondents, with 522 (57.94 percent) identifying themselves as agents, 237 (26.30 percent) identifying themselves as brokers, and 142 (15.76 percent) identifying themselves as “other.”

 

This article was written by Gill South from Inman News and was legally licensed through the NewsCred publisher network.