Photo by bradleygee
A friend of mine recently told me that he is thinking about becoming a real estate agent on the side to help generate extra income. I come from a family of unemployed mortgage brokers so I couldn’t help but blurt out an inappropriate, “Are you crazy?!”
Since the housing bubble popped in 2006, home prices are down nearly 30% in our area and many of the houses on our block have been sitting unsold for nearly a year, so you can see why I thought he might be a little nuts.
My friend, never the one to back down from a chance to prove me wrong, laid out his reasons…
1. Less Competition
One of the hardest hit sectors of the job market have been those connected to the housing market and real estate agents are no exception. In California, the number of registered agents is down 18% alone since 2007. My friend reasons that will less realtors in the game, there will be less competition for listings and representation for buyers.
Of course, I argue that there are less listings and buyers so the point is mute, but more on that later…
2. Ability to Set Your Own Hours
There’s no doubt that being able to set your own hours is a huge plus, but selling real estate is also demanding of time. I argue that you will need a first job with a fairly flexible schedule since buyers/sellers generally want their agent to work on around their schedule, not the other way around.
With the market being the way it is, it’s also likely that you are going to have to show picky buyers a lot more homes and spend a lot more time marketing your seller’s homes.
3. Record Low Interest Rates
If you look at a home loan comparison chart, it’s clear that there has never been a better time to sign a long term loan. A 30-year mortgage can be locked in for around 4.5% so it is certainly possible that new buyers could come into the market.
Even if you accept all of that, I still wondered…
“Where will all these phantom clients come from?”
My friend replied that he knew finding clients would be the toughest part, but that because it was a second gig he was only going to market to clients via word of mouth. He wasn’t going to spend any money on those fancy magnets or ridiculous park benches. He was just going to market himself to friends, family, and their acquaintances.
His goal is to not make a fortune selling real estate, but just sell a couple of houses a year and bank the commission on each one.
So, what do you think? Is my friend crazy for joining the real estate game right now?
|
Like what you've read?
If so, please join the over 5,000 people who receive my exclusive weekly tips on how to make extra money. Plus, I'll send you my five favorite ways to make money right now! Just enter your name and email below:
|
|
Trying earn extra money is never a bad move. You should support him and mention his name and service to your co workers and friends.
I used the same realtor back in 2007 to sell my condo and also help us through the purchase of our home. He was very successful and continued to do well in spite of the real estate collapse. Having observed him, I saw that his job was full time, and not just in the 9-5 sense, but in the ‘all the time’ sense. He was in the industry for decades, and was able to not only stay in the industry but truly succeed in the industry, and it was because of his desire to go above and beyond. I just don’t think someone going part-time will be able to have even a fraction of that success.
I do think he is a little crazy. I believe there are classes and certifications which must be obtained before you can open up shop and start as real estate agent business. This overhead will make it double hard to make money because you are now in the hole.
In no shape or form would I sink money to invest in a license to sell a declining part of our economy.
For the very reasons you mentioned, I would have reservations about a friend going into real estate. It may have to be a long term commitment for him to really benefit from it, when things turn around.
It’s funny you bring this up because I had a thought of becoming an agent myself recently. Mainly because it seems to be an enjoyable career.
But, I have to agree with Money Beagle… if he were to do it, he’d have to work plenty hard at finding some success. If it were that easy, we’d all jump on right?!
I have been a Real Estate Agent for 11 years now…and this market is TOUGH! It is also NOT a part time job, nor can you make your own schedule. It also costs money to be in this business, even when you aren’t making any!
It is not unusual for me to be e-mailing my clients back and forth at 11PM, or creating a virtual tour at midnight. BUT-I must say that it has been a very rewarding career. I have enjoyed (almost…LOL) everyone I have met along the way, and have been blessed that many clients have become my friends. I couldn’t imagine doing anything else! I wish your friend luck!
[...] The Penny Hoarder, Kyle Taylor, talked about how a friend of his was thinking about becoming a real estate agent on the side to help generate extra income. Kyle thinks he’s crazy. (And I have to agree!) Is This a Good Time to Start Selling Real Estate Part-Time? [...]
I had actually considered going into real estate a few years back, then everything got crazy. It could def. be a great way to earn some extra money—if you’re good.
[...] Taylor presents Is This a Good Time to Start Selling Real Estate Part-Time? posted at The Penny Hoarder, saying, “A friend of mine recently told me that he is thinking [...]
My sister and I obtained our licenses in 2009 as a side income to our full time jobs (we are third-generation real estate investors, and solidly middle class I might add!). I have sold one house and have effectively broken even on my investment. Then I had children and time outside of work became a much hotter commodity.
My sister, however, has been generating a healthy side income doing the very thing your friend plans to do – networking through friends and acquaintances.
As long as he realizes finding buyers will be tough, he could take the classes. At the very least he’ll be better informed if he ever wants/need to buy or sell his own house. He could be very helpful to family and friends as well. If he belongs to any organizations and/or churches, etc. he could find clients that way also.
Seriously? Being a Real Estate agent is a profession, not a side job. It is one that demands the highest level of professionalism. It goes way beyond driving a friend around on the weekends to buy a house, once or twice a year. The profession is constantly changing as the market changes, even in a healthy economy there is additional on going training that is required. As an Agent, can’t be a REALTOR if you are part time, we must keep up with contract changes, and changes in the mortgage industry that must be kept up with. Real Estate in not a career to be dabbled in half heartedly, another term comes to mind but I won’t use it here.
Would any of you go to a Part-Time Lawyer who only works weekends? How about a part-time plumber or electrician? Maybe I can refer you to my part-time Dentist friend. Real Estate can be a rewarding career; it just needs to be treated as such, do it full time or not at all.