Easy Money? That's news to me.

A lot of people I have met over the years have told me about their plans to enter into the real estate profession after hearing what I do for a living. "It's such easy money" they tell me. I try not to choke, or worse laugh in their face, when I hear this. It's actually sort of adorable. I'm going to turn my pockets inside out for your benefit, so if you are considering getting into the business, wrap your brain around these numbers.

Immediately after getting my license (classes $600 + licensing fee $83 + exam $56) I was hired as a licensed assistant for Re/Max Classic in St. David's. I liked the office because I would be working for someone I knew and it was in an area with high property values. The downside was that I lived about an hour from the office and with no hourly pay, gas money was not instantly reimbursed and Blue Rt traffic was killing me. So I chose to go in another direction, but of course there was lag time in figuring out what direction exactly... so back to bartending for awhile.

After a grueling FOUR interviews, I was hired by a luxury home builder as a Sales Associate. This felt like the brass ring of real estate jobs: a base salary + commission + benefits? Amazing! Prior to signing on I received an offer letter for my base salary (about $30k-ish) and was told that my commission would be "about $10k", but didn't see it in writing. So I had no idea what this meant...did it mean I'd make $10k per house?!?!? Because I would be selling $800k-$1M homes, that didn't seem impossible, but maybe unlikely. Or did they mean $10k total? Just a small difference. I was confused but so excited for the opportunity that I accepted the job. It turned out that they meant about $10k total. (I was promoted to a Sales Manager fairly quickly, about a year and a half later, and the money got a lot better.) Still, very exciting stuff and I would go on to stay there for a few great years, until the twins were about 10 months old.

I started to feel really restricted by having to sit in a model home day in and day out, whether there were any prospects coming in our not. I began to resent that had I sold one of our homes on the other side, as a Realtor, I would be making about $20k/house versus $2k/house....base salary or not. And so as it happens, the grass on the other side started looking pretty green and off I went. Back to being a free agent.

I started at a company I'll call XYZ Realty, just to be fair. I transferred my license ($25) after taking some continuing education ($150), bought business cards ($50 + photographer fee $75) and a for sale sign ($50). I knew I'd be working from home but this particular company required even at-home agents to pay a monthly fee ($55). We also paid for any photocopies we made. I joined Trend MLS so I could publish my listings and search for them (this isn't exactly optional, it's our lifeline...a $226-up-front- $126/year-lifeline).

For the listing I had with XYZ, I had to pay for my own For Sale sign, my own color copies for the brochures I made for prospects ($86 for 20 copies of the brochure), food for the broker's open house ($30), food for the public open house ($30). For my buyer, my biggest expense was gas. They were looking in Delaware County, about an hour from my house, so the back and forth wasn't as nominal as it might've been if I was working in my area. In the end, my listing was priced too high and didn't sell --but did cost me a couple hundred bucks. My buyer successfully purchased a home in Aston. Out of my $3800 commission I had to pay E & O insurance ($400). So from January-March I grossed $3800 and my net was about $2000 give or take. Yikes. Ultimately, the culture of XYZ as well as the monthly fees/operating expenses were not for me. Next!

I decided on Prudential Fox & Roach, where I am now, after a lot of research on Coldwell Banker, Long and Foster, and Weichert. To be fair, I will say some of my friends in the business have not liked PFR; they've felt it was too corporate and structured. For me, coming from a publicly traded builder, this was music to my ears! For every marketing piece I could need to create there are templates to help, beautiful pieces already made and free for my use, and photocopies are free, too. I have a desk at the office as does my teammate Greg and we do not pay monthly fees. We don't pay for signs. I was able to negotiate some other perks since I have been in the business and have a large Sphere of Influence. Greg is new to real estate, so he has had more out of pocket expenses: business cards, announcements, and a very in-depth training program ($200). I should mention XYZ offered free training, however none of the sessions I attended offered me anything of value. I can see though that a brand new agent probably would benefit, but it was fairly basic stuff. The PFR training is much more in-depth and technical than focused on sales. And in my opinion you can either "sell" or you can't. It's more of a natural gift, not something that can be taught.

As an agent for PFR you are expected to join the National, PA, and Suburban West Realtor Associations. This certifies you to be a certified REALTOR. A REALTOR is a Real Estate Salesperson who has received additional ethics training. To become a REALTOR isn't cheap: $150 application fee + $373 up front, $373/year.

I've been at Prudential since June. I started working with a buyer pretty immediately and their settlement did not occur until September 15th. So from March 28th (buyer at XYZ settles) to Sept 15th (buyer at PFR settles) I made $0, but I spent quite a bit. From my first commission check, I gave my teammate a cut, paid for a new E & O policy ($400...again) and was left with about $1700.

Because I am extremely well-connected and Greg is no wallflower himself, my team will be headed into November with 2 new listings, a possible sale of our Reading listing, 2 investors, a renter and a potential buyer. All of these leads were generated by our friends and my past clients. But for a typical new agent, you will also need to spend some dollars and time prospecting. Flyers, floor time, internet based lead generation, mailing lists, direct mailings...and all of those things cost money.

So. Is there money in real estate? ABSOLUTELY. Lots of it. Is it easy? Not even a little. If you're passionate about people and investments, dislike static environments and predictability, and have about $15k-30k at your disposal I fully encourage you to go for it. And although I have my own opinions about most of the companies out there I will never, ever try to recruit and will offer as unbiased an opinion as possible.

Keep the faith, if you're already in it right now. As my buddy Dave Hopkins says, good things happen to good people who work hard. Simple advice really, but it's gotten me through some very lean times and on my way to the f-a-t.