Every agent remembers their first, although the timeline for making that first sale is different for all new real estate agents.
Karen Briscoe, a McLean, Virginia, agent, closed her first deal just one month after she began her real estate career 15 years ago. Katie Messenger, a Louisville, Kentucky, agent, waited six, nail-biting months until her first sale.
So how can a new agent survive—put food on the table, pay their mortgage—while waiting for the cha-ching to roll in?
“Don’t quit your day job,” says Desare Kohn-Laski, a South Florida broker/owner who was working as a corporate accountant when she made a career switch to real estate 11 years ago.
Kohn-Laski took four years to transition from full-time bean counter to all-in house seller, keeping her accountant’s salary while she honed her real estate chops and established contacts.
Messenger, however, jumped into real estate feet first with no other income; her husband was starting a new business, too. She doesn’t recommend beginning a real estate career with no income safety net. But, for her, total devotion was the only option.
“To truly build a business, you have to go for it,” Messenger says. “I was fully involved in getting my real estate career off the ground. If my attention were divided, I wouldn’t have been available for open houses or to shadow agents to gain knowledge and momentum out of the gate.”
Get real about real estate
From day one, selling and renting real estate is a challenging, flexible, and rewarding career. But real estate is not a get-rich-quick game for the approximate 2 million active real estate agents in the United States. Here are some insights from a National Association of Realtors members profile gathered in 2016.
- 24% of NAR members earn less than $10,000 annually, while only 24% earn more than $100,000.
- The median gross income of Realtors® was $42,500 in 2016.
- In 2016, real estate agents with more than 16 years of experience earned about $79,000, while agents with two years or less experience had a median gross income of $9,000.
The good news: According to NAR, the longer you stay in real estate, the more money you’re likely to make.
Tips for new real estate agents while they wait for that first big commission check
If you love the real estate process and build your business, the money will come…eventually. Here’s how to keep going until the going gets good.
Part-time takes the pressure off new real estate agents
Selling real estate isn’t an all-or-nothing proposition. There’s no law that says you can’t be a bartender at night while building a real estate business during the day. Nothing turns a buyer or seller off more than a desperate real estate agent. Working a part-time job to pay your monthly bills and working part-time as a real estate agent take the financial pressure off, so you won’t give up “before you have a chance to shine,” says Kevin Vandenboss, a Lansing, Michigan, commercial real estate broker.
Feather your nest egg
You know how your dad always told you to save for a rainy day—typically six months of living expenses? That’s good advice because you’ll see a few rainy days and weeks and months when you’re a new agent.
Ideally, you’ll have at least six months of cash to live on while you’re honing your real estate skills. The more, the better.
Start in the spring
Timing is everything, and beginning your real estate career during the spring rush is a good idea. That’s when more established agents need help showing houses and running down leads, and you’ll be all too happy to help—for a fee.
Join a team
Who doesn’t love being part of a winning team? New agents can gain experience and commissions by hitching their star to a successful agent/broker with more business than they can handle alone.
Briscoe, author of Real Estate Success in 5 Minutes a Day, began her career working for one of the most successful agents in McLean, a Washington, D.C., suburb. “A successful team will often have an overflow of leads,” Briscoe says. “I got an internet lead, and the listing agent wasn’t available, so they sent me. The second or third house I showed them, they bought.”
Represent buyers for a while
Every new agent dreams of landing that expensive listing and making a big fat commission. But listings cost money. You pay for signs, advertising, lock boxes, and photo shoots, which add up to money flowing out, not necessarily in. Briscoe says she now spends about $1,000 on each new listing she lands.
That’s why she represented only buyers when she began her career. Representing buyers requires time, which new agents have in spades, and doesn’t require a cash investment, which most new agents can’t spare.
Embrace the renter
Sure, the commission on rental properties is typically way smaller than on sales, usually equivalent to one month’s rent. But there are many more renters than buyers out there, and closing a lease deal is less time consuming than closing a sale.
“Do a few rentals a week, and it’s as good as a sale,” says Kohn-Laski.
Renters typically have a limited time to find a place, and that ticking clock sometimes makes them a more willing client. Also, renters often become buyers. If you serve them well renting that one-bedroom apartment—and stay in touch!—they’ll think of you when it’s time to buy a four-bedroom house.
We repeat: Always sell—at family birthday parties, after church, standing in line at the market. “Everywhere you go, talk about real estate,” says Vandenboss. “Ask everybody you meet the questions; are you buying, selling, do you know somebody who is?” (Read more about generating leads.)
Vandenboss recalls a successful agent who handed out 10,000 business cards a month to everyone he made eye contact with—bartenders, grocery store cashiers, the guy pumping gas next to him at the gas station.
“Just remember, there’s nothing special about those agents you see making a ton of money,” Vandenboss says. “They just put in the work, and they put themselves out there. Stick with it, be persistent, and follow up with everybody. It will pay off, and later on, you can share stories with other top-performing agents about how many days you had to eat ramen noodles!”
Now is a great time to launch a real estate career. Find out more by downloading our free guide: Is a Real Estate Career Right for You?