Officially Retired (I quit real estate career)
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|Sun, 07-20-2014 - 9:54am|
First - Nora congrats on selling your house!! What timing considering I just finished my 1st yr. in real estate and decided not to conitnue. Well guys here's the low down:
1. Plus side (I like to start with good news) - in my 1st yr. I managed to get a 2 family house and a condo under contract (I represented the buyers). I also had a condo listing (representing the seller - no contract signed). I will get paid for these deals.
2. Expenses - a real estate career is expensive. Costs involved MLS fees ($500.), lockbox card ($100.), legal fee ($500.), business cards ($45.), signs ($40.), printer ink, paper, training ($500.), advertising, and the list goes on. Yes, all expenses are tax deductible as business costs incurred and the IRS did refund me in April for my expenses in 2013. BUT in the interim you still have to pay the credit card every month. In reality, a realtor doesn't collect a commission check every week or month until you're established or experienced. So your first 2 years in real estate is your expenses will be more than your income unless you're one of the lucky few who knows several people ready and qualified to buy or sell immediately. Obviously, I didn't know anybody qualified or ready to buy or sell after I got my New York State license. I happen to be a pro at cold calling, hard selling, marketing, etc. but just because I can connect with strangers doesn't mean these strangers are qualified to buy or will list their home at a competitive price.
3. Internet - main reason I chose to quit. In our age group, we all remember the days when buyers and sellers would call or come into the office and talk with ONE realtor and that one realtor would do everything to represent that buyer or seller. Back then realtors would still work with several buyers and sellers but it would be reasonable. Also until recently, realtors had all the data (comparables - what was sold when, expireds, active, etc. plus all information about their communities.) These days, everything is online. Yes, you can find out what your neighbor's house sold for and date, if it's under contract, HOA fees, neighborhood information, property taxes, school information, even who the buyer is (after the deed is recorded). The question is what value do I bring as a realtor? Answer - excellent customer service - that's it. There is a line between the computer generation (our children's ages - approx. 45 - 50) and our generation 50+. Everybody in the computer generation knows how to get all the data they want online and their attitude is to use multiple real estate agents to work with them until they find the house they want to buy or put their home on the market. Nobody wants to sign exclusive agreements until it's time to commit. So I was spending plenty of time opening doors for buyers, giving them the paperwork and they would go home and I would never hear from them again. Yes, I followed up and I was told they found something with another agent. When asked if they were working with somebody else, they all said, "No." Also buyers have the attitude that they are the only client a realtor should be working with. That's not realistic because agents have no guarantee that buyer will make it to closing. If I explain this to buyers, they immediately jump to the next agent. As for sellers, they want to work with realtors who have 4+ yrs. experience or have sold homes recently. That excludes new agents like myself. Bottom line - I was spending time assisting everyone while trying to ascertain which buyers would qualify and explaining options incase their expectations had to be lowered. Of course, the buyers disagreed with me because they knew their finances better than I did. That may be true until they sit down with a mortgage loan representative.
Mortgage Loans - The other issue is I spoke to a few mortgage brokers and was told many buyers are coming in to get pre-approved BUT due to debts, income and credit history, these buyers are getting denied or told to lower their price point of what they can afford. Since I was working in the NYC suburbs where housing is very expensive, these buyers are not happy having to buy something they had no intention of buying. They are also shocked at what you get in specific price ranges, taxes, HOA fees, etc. Yes, for example, a $300,000. house in many parts of the U.S. will be move in ready, updated, etc. BUT $300,000. in a NYC suburb will only buy you a 2 bedroom condo. If it's a house, it will need major work involved.
My wonderful husband - yes he officially retired after 30 yrs. of teaching high school Math. And to think I hated Math - one of those students who wondered when will I ever use algebra or geometry in my life and why is it necessary to suffer thru high school geometry just to take some stupid test. By the way, I excelled in history. As a retired teacher, will be secure financially until our deaths, so we can travel, etc. Read: I've never been to San Diego, Midwest and some other towns where our Board members live. Hint, hint. We've been to Canada (Montreal, Quebec and Vancouver)
So it looks like it's take the money and run. I would like your opinions. If given the choice, would you prefer working trying to build a business at 60 yrs. or retire comfortably. What about us volunteering at a non profit? I'm also thinking about this i.e. my husband & I helping disadvantaged students do better in school, single parents struggling, non profits for cancer, other health issues, any other suggestions?