Hello everyone and Welcome to another
episode of Selling Greenville your
favorite real estate podcast here in the
upstate of South Carolina I'm your host
as always Stan McCune realtor right here in
Greer South Carolina which is in
Greenville County as you guys always
know as I always say please remember to
subscribe to the show if you've not
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great leave a rating leave a review
all of those things make me very excited
when I see them particularly if it's a
good rating and a good review and of
course all of my contact information is
in the show notes just in the off chance
that you don't already have it today I'm
going to be taking a listener question
or I'm going to be using a listener
question I I say listener question it's
a little bit misleading I I've gotten
this question from a lot of different
people over the years and it's a
question that some Realtors actually
take offense to and it's the question
should I become a real estate agent
should I become a
realtor and other real estate
professionals take offense to that at
times because it can
imply that you don't think that there is
a whole lot of skill to becoming a
realtor right it it's kind of like
you know you get someone that has
bought a couple of properties and sold a
couple of properties and they think that
they can do that full-time that's kind
of like going to your doctor after you
successfully treated your child's
scrape and saying hey do you think maybe
I could become a doctor or a nurse I
I treated this you know this scrape
really well I used Neosporin and a
really good band-aid and we iced it
and you know I mean I could I make a
living doing this
that is what I've heard from some
real estate Professionals of the years
as far as how they feel when they get
that question because we all get it we
all get it from people should I get my
real estate license should I become a
realtor but I I just want to say I
don't take offense to that when people
ask me I don't take offense to it I
understand the way this is it's it's a
career that is unique in that there is a
low barrier to
entry and it's not necessarily a skilled
career from the standpoint of you don't
need to learn a whole bunch of
nitty-gritty in the weed stuff you know
if you become an electrician there's all
sorts of different things that you need
to know to be a skilled laborer in the
electrician field in real estate St it's
not that way it it's a different type of
knowledge that you need to have and it's
a different type of skill set that you
need to have and and different types of
experiences that make you a good real
estate professional the thing is that
because it's so wide open whereas to
become an electrician you have to pass
tests and and all of these types of
things well you do as a realtor as well
but all the tests that you have to pass
in real estate schol do not prepare you
at in the least to become a real estate
professional they basically they're just
focused on the legal aspects of it
basically just making sure that you
don't get in trouble that you don't
engage in fair housing violations that
you don't engage in steering that you
don't give people legal advice and
and act like an attorney when you're not
supposed to all these different things
that's really the focus of real estate
school and then the way it's set up is
that you have to join a broker right
away you can't just be be an independent
agent at least not right away if you
want to start your own brokerage you can
do that down the road but even that
takes you have to to be licensed
agent for several years before you can
do that but you have to join forces
with a brokerage and then the
expectation is that they will train you
well listen let let me tell you most of
the brokerages around here do not train
their agents well and I know that
because I'm dealing with it and and
that's the thing here's the weird thing
right you join The Brokerage but the
vast majority of these brokerages are
not having salaried Realtors these
Realtors are typically still independent
they're
$10.99 so you can't be
forced to go to all these different
classes and whatnot they might offer a
bunch of classes a bunch of training but
they can't really force you to to do all
of that because there are some
restrictions on what you can force
with a 1099 type of type of Labor
that you have because those people they
are independent contractors now you
could say well we're not going to send
you any leads the brokerage might say
we're not going to send you any leads if
you don't complete these these courses
these classes but it doesn't matter if
you bring your own business business if
you have your own leads that you're
generating then it really doesn't matter
what the brokerage does so it's it's an
it's a strange interesting thing where
it's just different than so many other
careers out there because you can you
can get into it easily but at the same
time you can get into it without having
any idea what you're
doing and and I think the part that
most
Realtors take offense to the
suggestion when someone comes along and
says hey I want to become a real estate
agent do you think I should it's because
that there might be that implication
that it's easy not just to become a
realtor we all know that but easy to
succeed as a realtor that's the nub of
the question and here's the answer to
that it's really simple okay it's really
simple the answer is no it is not easy
to succeed as a realtor there is a
stat out there I don't know where the
source data is so I'm not 100% sure if
this is a 100% accurate but there is a
stat that's frequently cited in the
industry that 70% of Realtors are out of
the business before their first
anniversary of it before their first
anniversary as a realtor they're already
done now that stat may not be 100%
accurate but let me tell you from my
experience
it it is pretty accurate 70% of the
people that I have known that have
decided to go out and get the real
estate license were done within the
first year and and by done I don't mean
that they just said okay I'm never going
to do this again it's more of a just a
coming to terms with reality type of
thing where it's like okay I've still
got my real estate license but where is
this business going to come from what am
I going to do what am I going to do with
this there's also a statistic that
I've read that I I think that this one
is for sure pretty firm that 90% of
Realtors are out of real estate before
their fifth anniversary 90% only 10%
make it and so the fail rate in real
estate is extremely high if you're
looking for a business that you'll be in
5 years from now real estate is is not
likely to be the one that that's you're
going to cut it in just statistically
speaking I'm not being personal and I
don't have anyone in mind as I'm doing
this episode just so you know we're
just talking in general terms now some
might argue well it's a good market
right I
mean it can't be that hard and and this
is where it can get offensive for sure
when people start throwing that type of
terminology around listen it is a
terrible Market to become a realtor and
this is what's crazy is that so many
people are signing up to sell real
estate because they keep hearing it's a
good Market no it's it's a terrible
Market to become a realtor in and here's
why there is very little very little
Supply and a ton of demand you're like
well that sounds like a good thing right
that's what makes it a sell's market
no here's why that's a bad thing if
you're new to the real estate game
there's very little Supply what does
that mean there's not a lot of houses
for sale on at any given time here in
the Greenville Market we will have EAS
easily two to three times the number of
homes sorry two to three times the
number of of realtors in our market then
we have the number of homes for sale so
what does that mean that means that any
given time there is in in terms of
homes that are actually possible for a
realtor to get as a listing there is a
tremendous amount of competition other
people trying to get that it's not one
to one it's not like okay this is a
market where if you're a realtor you
average a listing you have you know one
listing on average no this is a market
where the average realtor has less than
a listing at any given time and guess
what on top of that it's those top
producing Realtors those ones that are
making millions of dollars a year they
have a ton of listings so those ones at
the very bottom those newbies they don't
even have any listings by and large
that's just the way the market works out
like this but then well what about on
the buyer side well on the buyer side
it's even it's even worse in some ways
because you get a seller's market now
you're showing tons of houses you're
spending tons of time showing all sorts
of houses to buyers and then writing up
all sorts of of offers getting rejected
having multiple offer situations that
you're not winning and spending tons of
time getting nowhere not getting paid
for that it's free it's essentially Free
Labor until you get to closing and so
I would say that this is the hardest
Market to become a realtor in if you
know five and a half years ago when I
when I got my real estate license if I
had chosen this year instead let's say
or let's say that 5 and a half years ago
the market was like this I don't know if
I would have succeeded I don't know
because this is just an insane Market
to operate in we're all spending a lot
more time than we normally do for the
same amount of money just because of the
way the market has been now of course
the hardest part of being a realtor is
that it's a commission only business by
and large there are some companies out
there that offers salaried realtor
positions to me that's even worse
because
again you're doing the same amount of
work as you would as a commission
realtor but but making a salary that
being said perhaps Some people prefer
the stability I don't know I will
leave that up to you I have never I
would never consider that route now
having been
self-employed and not having someone
tell me how much I can earn per year
that is a very liberating feeling and if
there's one thing that I'm like this is
this is the thing or or this is one of
the main things that makes me think that
I could never do another career that
would be it it would be so hard for me
to go back to someone else telling me
how much I can earn in a year but
here's the tricky thing about this being
a commission type of
business in most commission businesses
you're selling a product that's tangible
right if you're in car sales for
instance you that might be commission
only but you're selling a car people
understand they go they can see the car
they can interact with it they can get
in it they can test drive it if you're
in insurance sales you can show them the
insurance policy the premithe
deductible all the different pros and
cons compare it to other types of of
insurance and and show them something
show the customer show the client
something tangible to convince them
to purchase that product from you and
and so you might be bad at selling those
things but the product might be really
good you might be a bad salesperson in
in Auto Sales but if your car and your
dealership is really great people are
just going to come in off the street and
say wow I love this car I'm going to buy
this right now that you don't even need
to have much skill in that situation now
I'm probably going I'm I'm risking
offending people in insurance sales and
Car Sales I know I'm simply ifying
things but I'm saying I'm not saying
that you can be successful as a bad car
salesman or bad insurance salesman I'm
just saying that that you can lock into
business more easily in those types of
commission types of of businesses
whereas as a realtor it's much harder in
that regard right because what are you
selling as a realtor a lot of people
they'll raise their hands and they say
we are selling
houses no you are not selling houses if
you're a real estate agent you are
selling yourself you're selling your
home buying or your home selling service
that is literally your value proposition
that is literally what you bring to the
table it is not houses now there are
some instances where perhaps a big part
of your value proposition is that you
bring unique houses to the market or
something like that and and so that
could help your buyer clients that is
very rare and that's definitely not
something that most of my listeners that
could be considering becoming a real
estate agent would be able to say so
you're selling yourself and your service
to potential clients and here's the
thing every single person you know and
and those are your initial clients right
people that you know are your most
likely ini initial clients not people
just off the
street the people that you know everyone
that you know has at least 5 to 10
friends that are realtors that's just
the reality of the
situation and and those people those
five to 10 friends of your friends are
your immediate competition you have to
ask yourself how am I going to
differentiate myself how am I different
than those people what is it that I can
genuinely offer a potential client that
those other 5 to 10 other realtors that
they already know can't offer them ask
yourself that question think about that
question if you don't have an answer to
that then real estate might not be the
right profession for you so it's hard
to to build the business because of how
competitive it is because at the end of
a day I might have a client that uses me
for one transaction and then the next
transaction comes around
and that client says oh you know what my
nephew Joe he just became a realtor
and I'm going to give him some business
I just want to support him and I may
have done a a heck of a job for them on
their last transaction but now they go
back to Joe just to help out their
cousin again that's how it works that is
the the the problem the difficulty when
everyone knows so many Realtors they
have relationships with some of these
people and you have to win out over
those relationships and went out over
other things there are obviously a lot
of Realtors out there that are basically
cutting into their paychecks they might
be offering for instance flat fee type
of listing services and things like that
and that's that's fine if if they want
to do that they are allowed to do that
but those
Realtors they can't make a living
full-time doing that they're literally
they're taking away from themselves and
I and I know some Realtors like this
that do that and they do like five other
things because they can't make a living
uh
actually you know cutting off their nose
to spite their face like that and but
it also makes it challenging for us
because they will poach some business
from the rest of us they will snag some
some of that lwh hang fruit people
that are just looking to save a little
bit of money and then that ends up
making it even more difficult and even
more competitive for everyone else and
this is why so many real estate agents
flame out so quickly because here here's
a reality of situation you you go out
tomorrow you get your real estate
license it doesn't work that way but
let's just say
theoretically you get your real
estate license tomorrow you're a brand
new
realter most people don't want to use a
brand new realtor and the majority that
do only use them for relatively safe
inexpensive transactions safe
inexpensive transactions I know that my
nephew Joe he can't screw this up I mean
this is an easy one it it's we don't
have a whole lot on the line this is
just you know a rental property that I
have and pill I'm just going to let Joe
list this it should be easy or I'm
looking at this rental property and po
Mill it's simple I already know my
lender I already I have my inspector
from last time like Joe's Joe can just
kind of step in and and basically not do
anything and get a commission all right
so that is
typically the type of business that you
get when you're a new realtor right
and so obviously usually these are
buyer clients most people don't use a
new realtor to sell their home because
they want to get the most amount of
money for the home that they're that
they're selling and so think about if
again if you're in this boat of I would
consider becoming a realtor if you're in
that boat think about how many people
you have in what we call your SOI that's
your sphere of influence if if you're
not familiar with that terminology your
sphere of influence your
SOI and and your sphere is like everyone
that you're connected to in some way
your friends your family people you went
to school with people that you have
networked with people that you've had
lunch with the past couple of years
people that you met at that weird get
together in this or that people in
your church or organization that you're
a part of that's your your SOI all right
so think about all of those people now
think about how many of them are going
to buy a house next year okay think
about that for a moment now think about
how many of those people people that are
going to buy a house next year are going
to buy a cheap quote unquote safe house
next
year now think about how many of those
people you think you could convince to
use you as a realtor because you have a
better value proposition than the other
5 to 10 realtors that you would be
competing with to get their business
there you go is that list big or is that
list small if it's a big list that's a
good sign that actually might mean you
know the the Whittle down list after you
Whitted it all down if you're like and
and by the way I apologies if you hear
my my dog barking I recently got a puppy
she's excited about something if if
after you Whitted it down you're like
okay this is actually a pretty big list
well that's actually a really good
sign that actually is kind of a an
inkling kind of a possibility that you
could succeed in this business that you
wouldn't be a part of the 70% out in the
first year that you wouldn't be a part
of the 90% out after 5 Years or or
before five years if it's a small
list which is for the best majority
that's not the end of the world but
that's certainly a red
flag and here's what most people don't
realize they think Realtors I don't know
I I don't know if this is like an HGTV
stereotype or where this came from but
they think that most Realtors just got
to sit back and just get new buyer
clients and new seller clients without
really doing a whole lot we're just
sitting at our computer or in our in our
sports car just on the phone all day
just doing deals just making money and
boom it's just we're just racking in the
dough having closings all week getting
new leads all week and here we go I'm
going to make $225,000 just this week
and what did I have to do not a whole
lot no that is not at all what it it
really looks like for the vast majority
of Realtors out there honestly and
and this will come as a surprise to some
people that haven't been in sales
probably the majority of the work we
oftentimes do is not actually involving
a real estate transaction and a lot of
ways the majority of work Realtors do is
actually trying to just find clients
trying to actually build their client
Pipeline and trying to build their
business similar to how a car
salesman he spends a lot more time
talking to people about cars and test
driving cars with with potential clients
and doing all of those things then she
or he actually does doing the paperwork
to help someone buy a car right it you
have to lay the foundation before you
actually get there to closing and the
thing is that that Foundation has to
always be laid previous business I was
in had ongoing type of client
relationships the previous work I was in
before I became a realtor had ongoing
client relationships you just had to
nurture and cultivate those accounts
okay as a residential realtor you don't
have for the most part accounts you're
constantly having
to rebuild your pipeline and keep
building it out keep building it out and
yes you will have repeat clients but
those repeat clients it might be 10
years in between
transactions it's probably going to be
at least a few years now if you get
investor clients that that could be
different but investor clients are some
of the hardest to deal with so that's
not NE that's not necessarily how you
want to be building your business either
at the end of the day the the the
people that are most successful in real
estate as Realtors are the ones that
have a big list of people that could
become potential clients clients
quickly but like I said there is
constant work that needs to be done to
continue to lay the foundation to
continue to to seow seed in the ground
in order to reap a harvest and so I'm
networking constantly I'm constantly
having meetings I'm constantly getting
together with people and usually a new
client lead quote unquote does not
become a client for at least 6 to 12
months 6 to 12 months I might meet with
someone and then a year from that
meeting they tell me hey I'm ready to
I'm I'm ready to to look at a house and
and I want to meet with you to to see
if if you might be a a good option for
me if you might be a good realtor for me
that's a lot of time and so you have to
be thinking really far ahead and this is
one of the hardest things about this job
for me is that when I get so busy just
with the transactions I have to find
time to continue to network to continue
to reach out to people to continue to
to Avail myself and and remind people
that I'm in this business so that I
don't just all a sudden find that my
pipeline is dry in six months because
that can happen very very
quickly all right if you're still like
hey that this still doesn't sound that
bad and and maybe you're like you
know I just want to do this part-time
anyway this you know I'm not looking to
make you know $200,000 a year it would
just be nice if I just made 20 or
$25,000 a year and and would it hurt
to just try okay well let's let's think
through that let's talk about that first
off let's think about all the expenses
you've got for starters getting your
real estate license I I joked before
about getting it tomorrow you can't get
it tomorrow you have pre-licensing this
is a few weeks of classes you have have
to pay for post licensing more classes
that you get after that you take
after your first year you've got more
training that you have to do that's time
potentially money you might have to
get certifications in order to show that
you're legit again time money there's
fees that you have to pay to your
brokerage that might be ongoing office
fees that might be all sorts of things
transaction fees oh don't forget you
have to split your commission with
someone now there are some brokerages
that that have 100% commission
splits but there's usually all sorts of
other fees to offset that and so
you're going to have to split your
commission or pay high fees or something
like that with whatever brokerage you
go with you'll most likely want to
run this business through an LLC I'm not
a Le legal expert but I've heard that
that's the best way to do that well
then that adds potentially accounting
fees or maybe if you do your own
taxes it adds a layer of complexity to
your taxes that might cause you to mess
them up and then get audited and then
get in
trouble it potentially means that you
need to purchase insurance for your LLC
that's another
fee remember representing buyer
clients and and even Sellers as well
in this job you spend a lot of time in
your car which means mileage wear and
tear gas expenses all sorts of things
that you have to factor for
so it's expensive to be a realtor in in
a lot of
ways and it's really really hard I I
mentioned 20 $25,000 a year it's hard to
make 20 to
$25,000 in a year it's easy year in a
lot of ways to make like 50 or $60,000 a
year cuz if you're already making like
$25,000 a year you've done several
transactions which means that you've got
probably several more that can be done
if you just work a little bit harder
most people they either make like 0 to
$5,000 or they make you know $660,000
there's not a whole lot in the middle
there because like I said you're either
getting yourself out there doing all the
work getting business getting repeat
business getting referrals or you're
just not and if you're not then you're
you're not running a business You're
simply
snagging clients here and there from
other Realtors every now and
then now if you're still interested
even after all of that you need to
consider the emotional toll of the job
as well and yes I said emotional toll
that might sound ridiculous it's not
the first thing it comes to mind when
people think about real estate but
listen being a realtor is
substantially more stressful than it
looks like on HGTV HGTV and all these
different shows that depict Realtors
it's hilarious it's completely
unrealistic have you ever been stressed
out you personally you The Listener have
you ever been stressed out by a real
estate transaction that you've been a
part of ever or perhaps stressed out by
the process frustrated by the process of
looking at multiple homes and and not
being able to get one under contract or
trying to sell a home and not and not
having a smooth process not being
able to get a contractor out to do the
the work on your home to get it ready to
list or whatever the case may be have
you ever gone through that and been
really frustrated really stressed out
really Ed agitated depressed
Etc well if that's true imagine going
through three to four to five or more of
those of that feeling at the same time
because rather than it just being your
one transaction now it's for all of
these people you've got a bunch of
transactions that you as a realtor are
having to emotionally manage and trust
me you cannot just detach yourself from
that you cannot be helping your clients
through an emotional situation without
feeling the emotional tug that's
involved with that now if you say
well no I I've never been stressed out
by any of that that doesn't really
impact me that much well it's going to
impact your clients Place yourself in
the shoes of most people whose house is
both their current shelter for their
family it's a place that has a lot of
memories and emotional
experiences and it's their most
valuable and most expensive asset and
investment there is a ton of intense
emotion associated with all of those
things combined and all of those things
combined are what a typical real estate
transaction looks like can you handle
that maybe you can handle one at a time
but can you handle running a business
where you're having a bunch of those at
one time can you handle a business where
you're on call
247 yes we are on call
24/7 you say well I'll just tell people
that I don't answer my phone after six
o'clock good luck that's what I'll tell
you good luck you want to turn off your
phone on New Year's weekend good luck
go for it see see if that works out for
you see if you can run a business that
way and if you're still interested
you're like i' I've heard all this and
I'm like yes let's go for it okay are
you qualified a good realtor ends up
doing some accounting stuff but we're
not allowed to be like actual give
accounting advice or tax advice but we
have to kind of be an accountant we have
to do some attorney stuff but we're not
allowed to give law advice or practice
law or or do anything related to law we
have to kind of provide some financial
and investment counseling
but we're not allowed to actually do
Financial counseling or investment
advice but we kind of have
to we have to do a ton of admin are
you good at admin are you going to pay
money to hire an administrative
assistant obviously I've alluded to a
ton of networking devote time to
networking understand you're going to
have to buy people lunch buy people
coffee buy people beer whatever the case
may be you're going to have to do that
marital counseling I mentioned it's
emotional you will have to do marital
counseling it will happen if you're a
real estate agent are you prepared for
that again you're not allowed to provide
marital counseling you just end up
having to do it it's just the reality of
the
situation
you have all of that do you have a
large Reserve fund if you plan on this
being a major part of your household
income do you have a large enough
Reserve fund to go for for several
months without a single closing because
that will happen at some point at least
it will for sure
happen
does that sound like something that
you can handle can can you handle the
stress of going several months without a
closing and and looking in the pipeline
and being like I don't see anything
coming up anytime soon and knowing that
you just have to keep working it keep
working
it and hope that business comes down the
road I know that I've painted this kind
of negative
not because I want you to have a
negative picture but I want people to
see the other side of it because most of
the discussion about being a real estate
professional is that it's easy it's a
way to make a lot of money without being
very skilled without being very without
having to get a bunch of qualifications
having to go to college all these
different things there's a whole
another side of it and if you heard that
whole another side of it and you're
still like you know what I'm all in I'm
ready for this I can do this then let me
know let me know because I would like to
to talk to you not to talk you out of it
but you might be a a good fit to
come to the company that I'm with and I
don't get anything out of that I don't
benefit from that in any tangible way I
just like to help people I I like to to
talk to people about real estate and and
help them get their footing in it talk
to me about it I'd love to I'd love to
discuss it with you there there are
plenty of places that could be a good
fit for you I kind of have my ear to the
ground with not just my company but a
lot of other companies as well so I can
help you in that regard and I'd love to
to discuss that with you and so we will
end with that that if you want to
discuss that with me all of my contact
information is in the show notes as
always rate review subscribe to the show
and have a great rest of your week
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