I became a Realtor in 2001 part-time and by 2004, I was selling Real Estate full time. In this time I have become one of the top Realtors in Indianapolis. So, this is a question I hear quite often, Should I Become a Realtor?’.
I am asked at least a dozen times a year whether or not someone should “go into” Real Estate. I get asked so often that we actually hold workshops on this very subject. I have some very quantitative exercises for you to go through to help determine if you should become a Realtor.
1) Can you sit down and make a list of at least 100 people you know well enough to get a lead from them. This could be them themselves looking to buy or sell a home in Indianapolis. This could asking them if their mom, brother, sister, co-worker is in the market. Again, these are people that you know well enough to ask that.
2) Do you have 10 buckets to capture leads? Examples of this include: BNI Group, Chamber involvement, connections with HR personnel that heavily relocate to Indianapolis, soccer parents, etc.
3) How much are you willing to spend to have a website presence? I have done millions of dollars in business from this blog alone. The fact that you are reading this right now, proves that having a web presence is important! Other website presences include Facebook, Twitter, and believe it or not, Instagram!
So, let’s say that you know 100 people, have other ways to capture leads and are willing to invest (money and time) into a web presence, there are still other things to take into consideration before jumping into becoming a Realtor. Those are:
The commissions. Most people think that if I sell a $100,000 home, I pocket $3,500 of that commission. If you aren’t a broker, you split your commission 70/30. So, of that $3,500, my portion is $2,450. In addition, there are MIBOR fees, licensure fees, website fees, lockboxes, and signage to purchase. On average, I spend 28% of every dollar earned on these fees. Now that commission is down to $1,764. Next you have the taxes. As an independent contractor, you pay both portions of FICA, averaging about 15.3%. Your commission is down to $1494. That’s not nothing. But, considering that the average Real Estate deal can and do take weeks of time, it’s up to you if that’s enough to make it worth it.
Another thing to consider is whether to join a large firm or a small boutique. I absolutely recommend joining a large firm if you are starting out your career. The amount of knowledge that you can amass from a larger firm is crucial. The educational classes are typically better and more frequent. Not to mention that being able to be on a team, lowers the fees you need to pay and it helps generate leads.
If you read this and still think you should become a Realtor, drop Carmel’s Best Realtor a line and we can go into more detail! Also be sure to check out Indianapolis Real Estate Training for additional information!