THERE IS DIGNITY IN ALL HONEST WORK.

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THERE IS DIGNITY IN ALL HONEST WORK.

Inspired by Carol Culkins spirited defense of agents who, in this difficult time for real estate practitioners, take jobs at Starbucks or waiting tables that some would consider demeaning.

There is dignity in all work. Let's make one thing perfectly clear, there is no job that is demeaning.

Further, I don't recall any criticism of agents who take jobs part or full time for necessary income. What I do recall are comments questioning the easy licensing as a real estate agent and the fierce recruiting for these agents by brokers who benefit financially from the sales these novice agents who may bring in one sale a year from which the broker receives about 50-60% of the commission.

IT'S THE SYSTEM. The criticism isn't about the agents taking jobs, it's about the easy entry into a business that used them, benefited from their few sales and then, when there is no security, discards them. Most pre-licensing doesn't even inform that real estate licensees are not eligible for unemployment insurance. Of course they're not. They are operating a business as an independent contractor of which they have little to no knowledge.

There is little emphasis in pre-license training about the fact that real estate agents are small agent business owners and that a sufficient capital investment is going to have to be made to succeed, especially money set aside for living expenses when sales are scarce. If the real cost of operating a real estate business were really understood before licensure, I suspect that there would be fewer licensees.

FOOD AND SHELTER COME FIRST. I've hired many new licensees and while they were advised of the cost of the tools to work such as business cards, signage, newsletters, license fees, board fees, MLS fees, etc., etc. there is little focus on the need to have sufficient savings for actual living expenses such as rent, mortgage payments, food, clothing, etc. That's the real cost of operating a business before there is a sufficient cash flow to cover everything in the budget. Without spousal, family or retirement income, agents who enter the real estate business without significant savings are at risk of going out of business sooner or later.

The criticism isn't of agents who take jobs. It's questioning whether or not they were prepared for the real estate business they entered.

FOLLOW RELATED POSTS

Carol Culkin posted "Get A Job? - Realtors Who Have To Do, What They Have To Do..." dealing with the idea of agents having to moonlight or take part time jobs to carry on and keep themselves alive in tough times.

Steve Shatsky followed up with "Are New REALTORS® Prepared for the Realities that Face Them?" which expanded upon Lenn's idea that new agents are left with little other than an empty bank account and a stack of business cards, because no one taught them how to be a business.

Matt Stigliano bring everyone together with The post that just kept growing and growing and growing...

Steve Shatsky The Beat Goes On... Another Installment in the Agent Success Series

Courtesy, Lenn Harley, Broker, Homefinders.com, 800-711-7988, E-mail.

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Posted by Lenn Harley, Real Estate Broker, Virginia & Maryland on 06/06/2009 06:16 AM

Comments (160)

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160 Comments on THERE IS DIGNITY IN ALL HONEST WORK.

JUN

2009

Lenn, I know a few excellent Real Estate Agents who have been forced to take part time jobs...for now. They have families, no health insurance and a still sluggish market. They are qualified and now are just working double hard to keep up with bills.

If the real estate profession isn't providing enough income to support the essentials of life (food, shelter, etc.) it is the responsible thing to do to find employment that will provide that income.

I would also point out that in addition to new real estate licensees being unprepared and unwarned about the need for a "cushion" of some kind, they are unwarned that there is no "safety net" when exiting the business. No unemployment benefits, no COBRA health care benefits, and so on. Real Estate is really something you do knowing that, for the most part, you are on your own.

Carole. Thanks. Congress had an opportunity to permit group NAR health policies a few years ago and they refused. It's tough out there and if someone needs a job, they need a job.

We're all working double hard to keep up with this mess.

Ken. Absolutely. I've been through pre-licensing training, post license training and broker training and never, never, never were the facts of life every honestly described.

There is nothing enobling about poverty either. I am grateful for the work I receive as a a yoga instructor, in addition to helping people buy and sell property.

I think you are dead on! Many companies hired any and every warm body that walked in the door for their 50% of that one or two sales they would make because they had a brother or parent that were going to buy and after that sale was done and they didn't know how to actually sell real estate they kicked them out the door.

I think companies should be held to a higher standard and actually train these agents rather than hand them the keys to the front door and say good luck!

Todd Clark - www.LivingBeaverton.com

Lenn.. I agree with you 100%. No job is demeaning. I give credit to all realtors, or anyone for that matter that do what it takes to make ends meet. What gets me pissed off are the people that are looking for handouts, without making an effort on their own.

Great blog.

valerie osterhoudt

Todd.. For the most part, the brokers that are just hiring off the street, are franchise companies.. they are ONLY looking at their bottom-line... period. This is why I work for an independent company... and even though it is a rough time.. I wouldn't change to another brokerage for the world.

valerie osterhoudt

GOOD MORNING LENN! No matter, people should take pride in what they do and do it the best they can. There is nothing wrong with getting a "job" to make ends meet - hard work and sacrafice are never demeaning. When I first started, I worked as a Realtors assistant for a couple years to learn. Then I branched out on my own and to this day - when things are slow I take education and training classes offered by my company to refresh my skills and keep up on things. -- Gabrielle

Lenn, we have a friend who joined a local real estate company, and twiddled his thumbs ("what do I do?"). He was referred to a broker that is busy, and interested in cultivating a long-term partnership, and he is now thriving, after a very short time on the job. Many brokers just plop a new agent into a cubicle, and walk away. To those getting a part time job, looking at alternative companies for future real estate endeavors might also be a good idea while they get their finances in order, so that they can start "right" next time around.

Janice. Good for you. Noble work indeed.

Todd. I watched the mega that held my license for about 6 years hire and retrain many agents that had zero production for years. One gentleman could only write a contract that had TBD in every single space where info was needed. The broker always took his contracts and gave them to another agent in the office to finish for a referral fee. Most had retirement income so they could live, but they were not good representatives for our industry.

Laurie. I suspect that there are many who take jobs now will return wiser and better prepared to succeed.

Gabrielle. When things are slow, CE is always a good idea. Indeed. I do that every summer while the vacation season is upon us.

Valerie. It's the old 50/50 syndrome. If they bring in only two sales a year, the broker makes money.

Amen, amen, amen!

Lenn, great post. It should be part of the licensing class. I know my Broker goes over the initial and yearly expenses with a new agent and then tells them about the reality of the Business. I don't think it is fair to blame the Franchise Companies, in every group there are good and bad apples. In 23 years, I have been with both indepenent and franchise Brokers,I have seen wonderful Managers/Brokers at both, and a few bad apples along the way.

I know a brokers who shall remain nameless... back in the day he would hire anything with a heart beat... same result...

If I had to work at Wal-Mart or McDonalds to help pay my bills I would. Hopefully in this market anyone exploring real estate as a career have fewer stars in their eyes and are getting a better understanding of the business involved in selling homes. We could all hope that this market will bring about changes to the requirements to get a real estate license but somehow I doubt it will.

Just like us, the real estate agents prospecting and it's about numbers, brokers prospect to agents. "Real" ones know how many bodies he/she needs in order to keep the office open. When I found out that's how my broker treated people, I refused to be a number, I moved on. I'm sorry, but I wouldn't let anyone treat me that way.

I've served as a waiter for 2 months in my life for a different reason. And many of my friends visited the restaurant and I gladly and proudly served them. It was not demeaning at all. One time, a young child threw up ALL over the place and my husband had to clean up. Demeaning? Some might think so since we are young professionals who really didn't need to be there for the income. I didn't look at it that way.

It was our way to put the towel around our arms to serve. Like you said, there is no demeaning job if you didn't have to trait yourself.

If you had to lie in front of your real estate clients to make that undignified sale to put food on the table, I call that demeaning - to oneself.

Your take?

Lenn - I am in agreement on you in regards to the set up of our industry. I have reviewed the records of my licensing class and out of 35 students in 1993 I am the only one that is an Active Agent.

I am sure that they affiliated with a "Big Box' company and SOLD a house or two , but where are they now ? If I had not owned a small business before entering Real Estate I would not have been prepared on how to structure my finances to have at least some moderate success while still being around for the girls.

You do what you gotta do.

Lorrena. Good point. Unethical real estate practices are demeaning to us all.

Pat. Mmmmm. Does Wal-Mart have a cut-off for age of new hires??

Konnie. Indeed. I have witnessed it in action.

Jen. Having been an employing independent broker, I can tell you one thing. Small brokers take more care in bringing a licensee on board because we are more cognizent of the risk involved. The large franchizes are often self insured and big enough that they don't concern themselves with the risk as small brokerages do.

Irene. Thanks, thanks, thanks.

Like Konnie, I have seen the brokers sans the plan go belly up. We lost some major players in this market turn. Haven't even gone into the agents - the ones that used to hold a majority of the listings and be jerks about it to the buyer's agents - lots of major players that went out of biz. There was a major power shift here with agents and brokerages. We just went through an "adapt or die" change and many couldn't adapt to the MAJOR change in our market.

Heck, I am sitting in an SRES class (yesterday and today) and many of the seasoned people are complaining that it is slowwwwwwww or there is nothing out there (talking like eyeore from Winnie the Pooh.)

I guess what I am saying is that it wasn't just newbs that went down in flames, it was anyone who couldn't adapt that went down = mostly seasoned. I am far from seasoned and I wouldn't be here if I didn't have the stable income of my spouse. Our commissions were cut in third (with declining prices and commission cuts) and we work tenfold to get one check.

Laura. Excellent point. Before my real estate life, I too had been the owner of a business, a secretarial school. I knew the importance of capital. Over the years as a broker, I've always cautioned agents to "save your money and stay out of the mall". Some listen, but to tell the truth, most agents are loathe to change the life style they enjoyed with the steady pay check, benefits and vacation time.

Tim. I love pithy.

When an agent works at another job, there should be some way the agent check messages during the day incase there are emergencies the day before settlement. I had a transaction where the listing agent could not be reached for two days.I called the broker who knew where she worked and got in touch with her.

I remember when I started and I was told not in real estate school or by a potational broker, but by other agents in the office I started in that it could take up to a year for a sale and some modest income or l could "luck out" and start selling immediately which some agents do. The carrot was dangled...........

Lenn...

This is indeed true. My brother-in-law, who was an executive got laid off. He took a job bagging groceries. His neighbors thought that it was a joke. When they asked what he was doing there he responded: "It's my job, do you need help taking these to the car?"

Your standard of living, saving for down turns and twists, living below your means. There is a tendency to spend up to your income, to loosen the purse strings as the money flows. If your kid did not drive a better car than you, did not have the latest cell phone, electronics, clothes, etc. and had chores, part time work mowing lawns, maybe he would be better off . And you would not need a second job to make the expensive over the top rope ends meet. Good post that makes you think.

I love this post and it is so true.

I see people that think what they do makes they better and they are just plain wrong and for the most part ignorant. (sorry for mini rant)

There is nothing wrong with getting your hand dirty with good hard honest work and supporting your family. This great county was built on our strong work ethnic.

Lenn,

I have been saying this for a long time, thank you for bringing it out for conversation.

Renee. Spousal income must be wonderful. Being on your own and older than dirt is not an attractive situation in a crappy economy when your business relies on consumer descretion. Oh well.

GITA. That type of negligence is not related to having a job. It's simply irresponsibility.

Miriam. I was not told either. Fortunately I had savings and survived, but many new licensees don't and strugle from day one when their broker asks for the money for their cards and the new licensee says, "I didn't know I had to pay for cards".

Richard. There's a man with dignity. I love him.

I do see many in this industry that I don't think should be. But real "training" starts if you go to work for a broker that provides it. Very little that I had to learn to obtain my licenses *both salesperson and broker* do I use in everyday real estate practice. It's what I learned in that office from my broker and of course there is always reading and research. Now that I am the broker... I offer training to my agents and even assistance to those with lots more years experience than me.

LENN- Beautifully written! Given how many Real Estate Licensees are now out of business your analysis is absolutely correct. Many fail to acknowledge or understand that they are truly "self-employed" in part because a Broker may hold their license and impart because of their own misunderstandings of how much money they must have in reserves to establish themselves in this profession.

There is no shame in having a steady source of income as a mainstay to self support during the turmultous times we are facing.

I enjoyed and applaud this post- 2 thumbs up!

Lenn, I couldn't agree with you more.

First: there is absolutely no reason to be ashamed of doing anything to make an honest living. There is no such thing as a demeaning job.

Second: Yes, many facets of real estate and other sales and commission based employment that lead to diminishing returns for the salesperson while making their managers and employers well off.

Lenn,

You post brings an important issue front and center. Those contemplating entering the field have no clue to what it takes financially,the time it takes or the ccommitment it involves to become a successfully income producing agent. Unfortunately classes or pre-licensing don't stress enough this is your business and there are business plans, budgets and reserves you need to set in place like owning any business. Your success is all about your resolve to make it happen.

A broker can furnish you tools, the forum and name credibility but it is up to you to run your business like your own. Many are not cut out to owning their own business. Some need the safety of the medical plans in place and job security. That is okay! Different strokes for different folks. The economic times across the country has been much worse for some areas and jobs outside the scope of real estate are needed to be taken by many.

Our city is adding jobs and has a healthy economy. Our office is doing well as we always have done. Our broker is the best and reminds us over and over again "do things for the right reasons and the money will come" "Quality people want to work with quality people" " This is your business so follow your business plan and keep on track". She is always there for us and keeps us up on anything new or market shifts. I love our environment~it's healthy, enlightening and fun!! I see some of the newer agents struggling and some drop out but those who commit to their business plan and really work it..they are on the road to success!

Andrew. In fairness to many agents today, they may be the owners of homes that can't be sold and they work to make ends meet until the market improves. We agents can control our own actions, but have not that much control, if any, over the market. We're victims of the politicians too just as are many home owners.

Mark. Thanks. On the contrary, there is something very basic and soul lifting gained from getting your hands dirty. Shucks, you have no idea how good I felt last week when I cleaned out my own garage rather than letting a handyman do it.

Don. Glad to help.

Tammy. Good for you. Me too.

Allison. Thanks. One thing for sure. This is self employment and many don't realize that fact.

Gabe. Indeed. I've seen that many times.

Dorie. I like your broker's attitude and leadership. "This is your business so follow your business plan and keep on track" is a good example.

I do consider myself very fortunate and do feel the pain of everyone who does not have that extra income!

Great post,

I especially like this point you made, "There is dignity in all work. Let's make one thing perfectly clear, there is no job that is demeaning".

There is nothing wrong with making an honest living. :)

Lenn, I spent the first two years of my real estate career, bar-tending at night to get over that I'm too Broke to have a commission job. No ever questioned my desire to succeed while holding on to the night job, some people are snobs and will be forever.

I wish there was more business planning and budgeting in real estate training upfront. If more people new that they would have maybe a $10,000 loss there first year, it would give them pause. It would also enable them to know that if they do hit the ground running, it won't be because they spent themselves into the poor house to make those sales. This blog should appear about once a month.

Ok so I just wrote a very looooooooooooooooooong commented and the system crashed when I went to submit. I'll now have to come back. Bummer!!!!

Mark. Absolutely.

Steve. Sad but true.

Joe. Thanks. Perhaps someone will ReBlog it from time to time. NOPE! It's members only, which I rarely do, but it seemed appropriate in this case. Perhaps I'll rething that.

Interesting post Lenn, thanks! In my real estate licensing classes we were told it could take 6 months to a year to make the first sale. Before I even found a broker I was reading "Real Estate for Dummies" (or similar name) that has some wonderful info for newbies, similar to what is being discussed here, and more! I have had to work at real estate to make money. Had my first sale in 4 months, and it took off from there . . . and I will repeat I work at it. Most others that were in my licensing class are already inactive, even if they still have their license. I have the pleasure of teaching art to kids in the summer, at a local arts center, because it is a blast and I do make a little money.

Bryant. I learned to not trust the system and even to not trust the auto-save feature.

When I can remember, I post a short title and a few lines and then upload to DRAFT and upload to draft several times throughout the writing. It's the only way to now lose content which I can't stand. I am never able to rewrite anything.

I can hear you screaming.

Lenn, great post. We had an agent that had to quit, because she needed health insurance. Her husband had fallen from a tree, and she just could not continue in real estate. I might add, she was really good and had made some good contacts, as well as many sales. But, just needed a job that provided more.

Sara. You were fortunate to have a clue and be prepared. I was not. Fortunately, I had savings but boy did it go fast. I worked very hard and had to change brokers in the third month because I could see no light at the end of the tunnel with the first one. With the second broker, I was in a positive office that had some good phone traffic. Still, it was several months before the first sale.

I barely survived the initial start-up, but once I got on phone duty, the sales started and in 3 years I was the top producer in my office. It was not easy.

Rebecca. Many real estate agents have health insurance. We just buy our own. Problem is, in the child bearing ages, or with pre-existing conditions, it's very, very expensive. I have basic, high deductible coverage that costs $2400 a year. It's just for catistrophic illness or hospitilation. I never, never use it. But, it's there.

Lenn, I haven't read Carol's post but I will.

As you said so elequently, it isn't about agents having other jobs, heck teachers have to take other jobs too sometimes.

It is about the service they can provide their clients.

Their is an agent in my office who works a 40 hr a week job.

She then does real estate from 3-10 at night and she does an excellent job. Some not so much. They don't have the ability to speak on phone, send a fax or check email.

No work is demeaning !!

Missy. I didn't get into that in this particularly post, but I've posted about that before. I have and would never hire a part time agent. I had one agent that wanted to keep her full time day job and when I asked her who did she think would do her inspections and closings, she answered,

'I thought you would".

WRONG.

Hi Lenn ~ Since I'm single I wanted to be a real estate agent for years before finally getting into the field. I just couldn't figure out how to get ahead of my bills without a regular income stream. It was actually ebay of all things that made me take the plunge. Back when nobody had heard of it I caught wind of it and thought - aha! maybe finally I can become a real estate agent. My plan was to sell stuff on ebay late at night to get me over the hump in real estate. Needless to say that didn't work but ebay did give me enough income to quit my day job and it gave me the motivation to take the real estate licensing course.

A year later I remembered something the instructor had said about rentals being a good start in real estate. Four months later I had a nest egg of more than $50,000 and knew my way around the city streets so started as a sales agent. Even still I had to sell my house to stay afloat that first year. And times were a lot busier then in real estate. I really wonder if people getting into the business have realistic expectations.

The capital idea is one thing - cash flow is another. This changing market has been a very good lesson in not counting on past performance to indicate future earnings or whatever the saying is. I blew all sorts of money on poorly thought out marketing efforts, lunches out, renovations - you name it. This slowdown is providing valuable, if painful, lessons for all of us.

Thanks for the food for thought!

Liz

Lenn - I am fortunate enough to be with a company that does emphasize this. Also, before I jumped in to the fray, I did do a lot of research into the business. But then, I have had my own business before, so, I already new what to expect from that part of it. But now is a tough time to be in the business, admittedly. We have open financial records for the office, and the company, and it is amazing to see how many very seasoned formerly successful agents are struggling big time.

El;izabeth. Goodness, you just reminded me that I sold the condo I lived in and bought another one so I could take the equity of the old one and live on it for another year.

Shucks, we did what we had to do.

Mike. I had the advantage of owning previous businesses too. However, this is a tough business for folks who enter it thinking the money will come like it did when they had a job.

Lenn - Once again, a thought provoking post. I know in these lean times I started a side business. I have now gotten through our lean times and our market has picked up substantially. The nice part is when the market was down and I had a lot of spare time, I invested my time and effort into a secondary business that is now thriving as well. I have gotten too busy for it though so I had to hire an employee (I picked my mother since she was laid off not long before I needed to hire) and now she runs it for me.

I agree with you 100% there is dignity in all honest work. Where we disagree slightly, though, is whose fault is someone enters a profession and is naive about what it takes to be prepared for that profession. It doesn't usually end well for folks who move blindly into something without doing their own due diligence.

Should classes stress it more? Well, okay, a noble idea. But people really do need to do their homework first.

Lenn: "Over the years as a broker, I've always cautioned agents to "save your money and stay out of the mall."

Or, as we say in California, stay out of the casinos. :)

Not only are some agents financially ill prepared when entering the real estate business, some don't have the personality to work the business. It's hard. It's no easy road, as you know, and certain types of personalities may not fare well in this business. Margaret Rome makes a great point in her book about Type E personalities who are perfectly suited to the real estate business.

A very interesting discussion, the barrier to entry in real estate is so minimal and the money being made on easy sales was enticing to so many that lots of agents entered the field. At the end of the day you have to look out for yourself and make a living whether thats through actual real estate sales or through other means.

Christianne. Careful. This is just the normal spring pick-up. It could get very slow again in late summer. It always does.

Susan. Would that were true. Sadly, new licensees don't know what they don't know. This should be better taught in real estate school.

Elizabeth. Right you are. We all have known folks who are not suited and they make everyone's life tougher. Of course, most businesses have the same problem. I guest there are folks who are just not suited for sales, or business ownership.

Morgan. Indeed. If that means taking a job at Starbucks, so be it.

I work three jobs and will probably continue to do so regardless of what the market does or doesn't do because I have a family with special needs kids and the bills have to get paid one way or the other. I have to worry about student loans, my mortgage and my rent plus a host of other things. The list is long. It's tough. I started when the bubble burst so it has always been a tough market for me. My attitude is do what needs to be done to the best of your ability. Whether it is painting a portrait or cleaning a toilet I do what I need to do for my kids. I am always amazed when people put other people down for trying to make ends meet. No one really knows what anyone else's life is truly like. They are not walking in that person's shoes. My hardships have made me pause and not comment on a number of posts because I've been infuriated at the callousness of some remarks. People are already part of the way down. Why kick them because they haven't been blessed with the number of closings a person claims they have...

C. Sometimes I wish I had the power to feature comments.

To be honest, I have criticized the easy entry in our business because agents who are not prepared for the real life of selling real estate enter with unrealistic expectations, but that's another matter.

When someone is committed and serves their clients well, they are my heros.

AMEN!!! Well said and right on the money Lenn! People are not prepared in the educational process to handle the responsibility and reality of being in the real estate business. Then they are given pie in the sky portrayals of what the life of a real estate agent is like by recruiters who are numbers driven filling offices with the "stack em deep and sell em cheap mentality. I have actually interviewed people and been brutally honest about what it is really like to be an agent and had them thank me for my candor and choose another profession. One man gave me a very complimentary endorsement on linked in because of my honesty which led him to choose another profession, because after our talk it dawned on him that real estate wasn't for him. Thanks for your post!!!

Len - One interesting aspect of "unemployment statistics" is that real estate agents are not included. There is another missing statistic and that is the "under employed". Your post peels back the fluff and rah rah to point out the stark reality of being self employed. You do what you have to do. But realizing an old phrase "but by the grace of God, ther go I". All honest work is has dignity indeed. Thank you Len

Lenn - This is such a wonderfully written piece, and so very inspiring. When we had the real estate downturn in the 1990s, I took what was supposed to be a little temp job lasting 3 months as a receptionist at an international software development company. It was entry level, but in a nice work environment with a bright bunch of people working in the Research and Development Center. I continued to sell real estate, especially to the computer programers, designers, and developers while there. . .That little temp job ended up lasting over 8 years. I advanced in that career along the way, and that is the key. Don't be afraid or feel undignified taking an entry level position. I used it as a mental vacation because it was easy to perform. . .And, if you do your job with pride, and you do it well, you will advance beyond it.

Lenn: Thanks for the follow-up to Carol's post. I've had practically every kind of job known to man. Thank God my did instilled in me a strong work ethic. I fortunately haven't had to take another job but would in a heartbeat if need be. Take care.

If the real cost of operating a real estate business were really understood before licensure, I suspect that there would be fewer licensees.

I agree 100%. Why isn't this problem being addressed by NAR, or the state associations?

People are amazed by how much it costs me...these days people know its not easy money though.

Lenn - Thanks for highlighting my post. It's always a good feeling to know that I inspire somebody like you, who I have grown to respect here on the Rain and who has an impressive amount of AR followers.

I totally agree that our system does not in anyway prepare agents for failure and how to be resilient in hard times. But, like much of the business - we are mostly self taught in our habits and practices once we get our licenses. Kudos to the brokers who offer ongoing training, tools to help agents enhance their businesses and distribute leads to the agents who are deserving. There's nothing more important than a supportive broker/manager in these hard times.

Lenn, I agree the system is broken, and the barrier to entry into the business for licensing is way too low. Many do not understand the business aspects either with needing to set aside a reserve for living expenses until the business takes off. Great, great points to complement Carol's excellent post talking about outside work. I too believe ALL work has dignity and there should be no shame in what else we do.

Lenn, I can't wait to relax and go fishing. I talk about it all the time. I've been planning my little trip for days (LOL). I'm trying to get my hot buyers into their new homes so I can take a few days off and unwind. My broker exam is in mid July and I have been craming hours trying to prepare as best I can. People think it is easy because they think 120 hours isn't much training. The prep work goes way beyond the class room hours (minimum requirements). You can never stop learning in this business. Things change every single day. They have re-written so many laws up here I'm doing the remedial (LOL).

Lenn this is very true! I have another full time job because the cost of being in this business is high especially for those of us starting out that haven't fully built our SOI and began to reap the benefits of repeat business just yet. I started last year at the same time as two other agents and I am the only left. I was also the only one that did not give up my regular source of income. If I had, I probably would not be in the business now (when things are just now starting to kick off for me) just as my two former associates aren't. I really do wish they would better educate those going through pre-licensing of the costs and risks associated with going into the business. Fortunately for me, I had an instructor that gave us some insight so I had a partial idea as to what to expect.

Chanda panda

I have to say as an agent of 2 years, its been very interesting out in the market. I have seen many agents come and go, some looking to make quick money, others just realizing the costs associated with Real Estate.

Our system may not prepare agents for the market, but the broker should give agents new pointers to send them into the right direction.. In the two years I've changed brokers twice. The first broker offered minimal support and was farther then I wanted to drive for this support. The second broker offered good support, but was not update with the times.

I agree we are mostly self taught in our habits and practices once we get our licenses, and there's nothing wrong with getting a PT job that supports the main shelters of life. Starbucks is a great place for prospecting and getting to know people. I have a friend who works at Trader Joe's and has sold 3 houses within the last 4 months working part time there.

Kudos to you Lenn to bring this out in the open here

Lenn, I resent the low licence requirements, and have written about that several times, but a far worse cancer in our industry is the "roster building" broker. There has been a shift in business plan from earning commissions for services to renting desks.

I have no problem with the full-commission paradigm, but when it changes the industry standard to renting a desk, something is terribly wrong.

Lenn: I have witnessed exactly what you are saying from across the isle. During a different recession, back in the 80's, after teaching for several years, and fresh out of grad school; I did all kinds of jobs from packing the New York Times with advertising at a distribution center in the middle of the night to working for temp agencies. I left teaching and in 84 I found myself at a title company. Through the years and several up and down cycles I've seen the ongoing cattle call at real estate offices for agents not prepared... Many made it, learned their craft and survived... many did not.

But, taking care of your family is #1... There is no job that's demeaning when you care, and are unselfish enough to do whatever it takes for your loved ones.

Rene'

The single biggest reason why business fail is lack of capital to sustain them until the money starts coming in.

If the real cost of operating a real estate business were really understood before licensure, I suspect that there would be fewer licensees.

Lenn I like you! You say it straight and word it wisely. We tried to get the pre-licensing hours upped substantially and made the suggestion of a 1 year mentorship. We also know the need of schools and licensing requirements to add on business development sections. Education committe worked for months in 2007 to accomplish all this......to no avail. It takes a legislative change for this. Our then Govenor did not want to make it 'harder' for people to get into the profession. I do believe she woudl see it differently now. We're in a transitional state here with interim governor so not much will change soon. But...that doesn't mean we can't have hope and keep trying.

As the broker/owner I knew full well I could have gone dowe the drain. I was fortunate to have the resources to hang on, pull back on just about everything and get creative and adapt. I said many times to anyone who was having a hard time financially....and there are many here.... it could happen to any of us. And it could. And then we'd start over and create anew. We're all in this together and together we'll make it thur these times.

I honor the folks who needed to take other jobs. This is no shame in doing what one needs to do to make ends meet. And hey.....starbucks is a fun place. So if I ever get out of real estate which I doubt will ever happen since it's my passion.....where & what would i choose to do next?

Walk on the beach for a month, play some golf...........and then get a job.

Hi Lenn... I think that you are right on target with this one. To be a real estate agent is to be a small business owner. You need, not only real estate knowledge, but also business skills to be successful. And like most small businesses, they are not immediately profitable and most fail due to insufficient funding/capital or reserves.

Lenn - I will only comment in portion. Anyone who drops their pride and gets a part-time or full-time job while working real estate is very honorable in my book. I struggled for years with my own pride before we had no money in the bank and were getting late on bills before I got another job (additional). It was the best thing for us to get us on our feet and put money in the bank! We are doing great now, but my pride had to be knocked down a few notches. I have great respect for those who aren't ashamed that they work a part-time job - all while "full-time" agents who make $20k a year put those "part-timers" down.

Lenn-you are so right..and recruiting is down at Sundance...why because why should I train agents to only walk away...it isn't worth it for them..for the company and for me! When I was in the early stages of my real estate career and newly licensed...I had 6 months in reserves...I had it..because the intstructor told us to. One of the best real estate schools around...Gold Coast School of Real Estate. I took training after training...because I need to know what I am doing... I didn't sell anything until the 9th month in real estate..I started to get behind...I worked as a waitress..and I stunk...but I did anyways...I had kids...and I needed to continue to market...I had to make this into a business...and I did..it just took me 9 months to do so!

Wonderful post, Lenn. You are quite right, there is dignity in every job. When I first started in real estate, many long years ago, I worked several part-time jobs in many different industries until I could make a living doing real estate exclusively. Some of those first employers became clients...as did some of my restaurant customers, janitorial co-workers and even a couple nursing home patients and their families. There is nothing at all wrong with needing to make an income.

I do think some sort of "budgeting 101" course should be a required part of the initial real estate licensing training. I've seen many otherwise qualified individuals drop out of the business simply because they did not understand the costs involved in running a business of their own. In addition, I don't think many agents who are brand new to our industry really understand that they are actually running their own business...too many of them think they are just working for someone else's business.

Our collective markets will rebound, some of them have already started. And before you know it we'll be innundated once again with brand new agents right out of school with their brand new licenses. After studying metes and bounds, and rules and regulations etc. they will all think they've got what it takes to be successful in this industry...and they probably do. It's just a shame that they will be so desperately unprepared for the day-to-day business aspects of what awaits them in the "real world."

Lenn, I do think that you should make this public instead of members only. It might help people understand when they see their agent working in a store or something - making an honest living. I have a husband with a job, or I would not have made it through 2007, I made just enough $ to stay in the business and regroup with internet marketing - and thanks for that, I have learned so much from you.

Lenn - Just when I thought your title said it all, I read the last two sentences of the post. You couldn't be more correct in my opinion. They say money makes the world go round, which is true... considering an abode and food require such. I started out part-time over eight years ago and am still here... full-time. I'd like to think that I'm a good representive of "part-timers" can work out. Zen Master says, "We'll see."

Great Post! I think it is terrible to criticize someone for taking jobs to support themselves and make a better life for themselves.

Lenn --- wonderful, and thought provoking post - and great comments. I forget who said something about working hard. That is certainly one key to making it in real estate. I started with very few people in my data base (new kid in town), and networked like crazy to grow a business. What was helpful to me was that I have been an independent contractor in one business or another for 30 years! And I had some savings form a house sale. - so I had some awarenss and a cushion for then and for now. I agree with you that there is dignity in honest work. and if the second or third job is what gets people through a tough time - then so be it. My concern is the 'missing agent' - who can't be reached because of the second job. that can be a real detriment to getting a transaction in trouble, out of trouble! Other than that, more power to people for taking care of self and family needs.

Lenn - I don't see anything demeaning about having to find another job in this challenging economy and real estate market in order to survive. I totally agree that education from pre-licensing courses and extensive training from brokers should be paramount in preparing new licensees.

While we may consider ourselves small business owners, the banks don't see individual agents as such. I tried to apply for a SBA loan and was turned down because I was working under the umbrella of a brokerage. We have start up costs and ongoing expenses like other entrepreneurs who are start up businesses but unfortunately don't have the same resources available. I think it's a real Catch 22 for agents and wish the rules can someday be changed although I won't hold my breath waiting for it.

I think that not only is there little training about start-up costs, etc and I think there is little explanation about the fact that you make no money if you don't sell. So many people assumed that things would always be great and they were selling millions or years and they are now destitute because there was no budgeting, saving, or planning for a day when the market was not hot. I do feel sad for the ones who are struggling to keep their heads above water and I feel nothing but respect for the ones who do what they need to do to keep their family afloat.

Exit. Thanks. Real estate isn't for everyone. That's for sure.

Claude. Thanks. A dose of reality for pre-licensure would help. I've interviewed new licensees who don't even have funds to join the local board. Fortunately for agents that I hired, I gave them enough buyer referrals to get them started. 10 years later, none of them can generate enough business to survive.

Myrl. That downturn is what made me decide I wanted to be a dedicated buyer's agent.

Paul. Good for you. I'm a workaholic and proud of it. I also study a lot, every day. I want to know what I need to know and it serves me well.

Bruce. Because if the industry were honest about the start up financing needed, they'd have fewer member, less money to operate with. They realy on membership fees.

Chuck. Indeed. Nothing is free. Quality brokerate is not cheap.

Carol. I'm surprised that more brokers don't train more because the agent's put them at risk every single day.

Gary. Indeed, Many who didn't understand the cost of doing business are the ones who are not taking outside jobs.

C. Take care of those hot buyers. I've got some I'm working with too. But, I'll be here when you are ready.

Chanda. You wrote: I really do wish they would better educate those going through pre-licensing of the costs and risks associated with going into the business.

So do I. So do I.

Francisco. My pleasure. I'm reading a lot of comments from folks who started in the business within the past two years. That's surprising to me with all the news about the tough housing market.

Jim. The worse agents I run into are those with 100% brokerages and little to no broker supervision.

Rene. Of course folks must take care of their family. The industry just gives lip service to broker training and the broker that do offer training take such a huge split, it's a wonder anyone survives.

Norma. You're 100% correct.

Anna Banana. I believe the licensing standards should be higher. However, I have no faith in the mentoring idea. It might work for some offices, but I've seen it in operation and it pales when compared to real broker training.

People need to do whatever it takes to keep a roof over their own head and feed their families -- there are agents all around who we see who are losing homes. One agent told us recently they could only afford to seed their kids Top Ramin 3 -4 days a week to make the grocery bills meet the available money. If someone needs to go and scrub toilets or waitress or whatever in order to pay their bills -- then bless their hearts and more power to them .

Steve S. Indeed. If agents were required to show some capital or proof of spousal or parental support, fewer would fail. Many agents can't even qualify a home buyer. They surely don't know what a P&L looks like.

Steve K. Good points. The little money many agents make is a surprise to outsiders who see only the real estate commission. a $15,000 commission check doesn't go very far when after taxes you may have to live on it for 3 months.

Midori. Getting started in real estate is a shock to most new licensees when they join their first brokerage. They shell out about a $1,000 for dues and memberships and even cards and then find that their broker isn't going ot give them any buyers or sellers. THAT was a shock to me.

Kellie. Don't be lulled into a false sense of security about the market. It's spring and we go through this every year.

Virginia. I'll look at it. I can't remember now why I made it MEMBERS ONLY, which I rarely do.

Jason. True. Fact is, it never really gets easy. No matter how long and how successful we are in business, we can't take the future for granted.

Aaron. I agree completely.

Alexsandra. Family comes first. After that, the hard work will pay off if we can stick it out.

Donna. IMO, the SBA is a piece of crap.

Stacey-Ann. Very well said. I haven't read a single comment or post from an agent who came into this business with full knowledge of the start up costs and difficulty of business development.

Bob and Croline. I agree completely. Take care of your family and then work hard to make the business work.

Lenn I understand and agree with the intent of the blog. That if times are tough and you can't pay the bills and take care of your family, then you need to find something to do that until the market improves.

But to state "There is dignity in all work. Let's make one thing perfectly clear, there is no job that is demeaning." is a stretch. I can think of many things that some might do for a living that is demeaning, and I don't even have to think very hard :)

George. I suppose it's a perspective. I, for one, do not demean any job or any one performing any work.

Lenn,

When I first got into the business they advised me to have 6 months income set aside. I would tell any new agent now that it should be somewhere in the 1, 2, or 3 years of operating expenses. Depending on the size of your database going in and what kind of other income you have coming in. If you're starting cold you need to be on the high side of that range.

I was and am the sole source of income in my family when I started and you're right I wasn't taught to figure in the actual costs of owning a business. I did figure out quickly that it was far more than anticipated.

Brian. I spoke with an agent today that has been licensed for two years and has had one closed sale. You can't live on that.

She didn't learn in real estate school what she would need.

Sadly, she didn't learn a lot of stuff in real estate school.

Lenn - All are worthy. As a Broker, I only hire full-time. BUT I am sure there are exceptons, like Steve and C above.

And for those of us who remember the Bible stories of the Old Testatment . . . Ruth stands out in times like this.

Ruth, a spiritual woman who was living during a harsh famine, where many of her male family members died (i.e., they were no 'bread winners' any longer) and she took care of her old, sickly mother-in-law. To survive . . . she went to GLEAN!

Gleaning of fields is the lowest job, and it's for the poorest of the poor. Yet, she did this with an open heart and love. She was appreciative and took the remainder -- the left over of the bounty, and offered thanks for being able to glean. The owner of the field, who opened it up to those that needed it offered very little, but still allowed those in need to glean his fields. How blessed Ruth felt even during her meager times she had found a field!

Wendy. One of the best agents I ever knew was a part time agent full time high school teacher. Once he retired from teaching, he became a full time agent.

Carla. Sadly, our country has millions of single parents who take any job they can get and perform with grace and dignity.

Hi Lenn, I was sure I had commented on this marvelous post but it appears I had not. My mistake. Beyond this great post I couldn't help but notice the Members Only and the lesson I learned from you on the subject. I see nothing in this post that any member of the public could not see or read or even learn from. What was it that you felt would be best kept to Member Only? Certainly not the fact that we are also human and suffer the same conditions that many in the public suffer. What we must do sometimes even as professionals to survive, above and beyond our levels of professional pride.

William. You're the second person who suggested that this should be PUBLIC. I changed it. I don't want to be accused of "airing our laundry". But, I suppose that horse left the barn when it was featured.

I agree. Nothing here I wouldn't post to the public. I made it MEMBERS ONLY out of respect for the views of others.

You're right. Nothing wrong with the public knowing that times are tough for many agents and when they see folks working at Starbucks that gave them a CMA last week, they'll understand.

OK so I finally made it back.

What we do for a living does not in anyway define who we are as a person.

Personally, as an adult, I have waited tables, driven a taxi, cleaned carpets, sold meats door to door, pitched timeshares out of kiosk at a mall and quite afew other jobs that some folks might feel are beneath them. I did what I had to do to support my family. I enjoyed them all and I was very good at them all.

Here's the rest of my comment :)

I first started in this business as a property manger. I was able to negotiate a very modest salary of $250 a week but I also negotiated a piece of the action on every dollar I generated for the company. I waited tables at night for the first year. During this time TLW and I also owned a guess service company named Holiday Makers. We sold attraction tickets and transportation to British "holiday makers".

It wasn't long before we started selling them vacation homes as well. We did this for about 3 years and then opened up Tutas Towne Realty. We have never looked back.

We did what it took to generate income so we could invest it in our business, Real Estate has never been just a job.

So true....we should all feel proud about our livelyhood . Good post Lenn as usual.

Thanks .

Patricia aulson/Portsmouth NH Real Estate

Lenn, What an honest and great post that ALL NEW AGENTS need to read before even taking their real estate classes, especially in this market.

Lenn- I have noticed in profiling potential recruits, that over 50% (in most offices) have not sold a property this year. No wonder that many have taken "second" jobs.

The question is - is our industry ever going to evolve to one of full-time, dedicated professionals that approach this profession as a career. Our industry needs to get younger and in order to attract the new generation of Realtors, lead generation is the key. In this market, it's the buying side.

I understand that many experienced agents have not been able to change and adapt to the new real estate economy and "survive" in this market. If they can't, I believe the answer is to seek another profession, retire (the average agent is 54) or they are in the wrong environment. Leadership can provide the inspiration, training and path to adapt (change strategy) to the current market . It's all about taking market share.

Once the market stabilizes, we are not going back to business as usual. Going forward, it's a new industry. One focused on customer service, not the Realtor.

You are so right most people start out with agents are short of cash and need to have some income to keep food on the table. We need to have higher requirements for entry and better explanation of the real world they are entering.

I have been told the State of Florida licensing exam is MUCH harder than it was way back 13 years ago when I took it.....

And I am GLAD!!

The standards NEEDED to be raised!!

=-)

Here, here! Nobody should be judged for doing what they have to make an honest wage and take care of themselves and their families!

In Florida they seem to have raised the bar a bit on the state licensing exam. They have increased minimum hours from 60 hours to 63 for the pre-licensing course. As for brokers to be able to apply one used to be able to have one year sales experience. Now it's two so things on the training side is helping to raise the bar. However they still do not teach agents how to run a business or even that it is a business and it is in our best interest to run it like You, Inc.

So far I have seen some agents take part time or full time jobs. It is a matter of survival for many.

No matter what there is nothing I haven't done in my life that would make me believe I was less than the next person. Just because I am a darn good agent doesn't give me any right to look down on anyone else who has to have a roof over their head. Circumstances and situations may have caused a person to look elsewhere for work. I commend them for working and I commend the employer who gave them a job.

I read Carol's post and I really am appalled at those that demeaned and degraded others for what they have to do....must be nice to have money growing on trees. The rest of us work. :) It may not be a "job" but it's still WORK....and if I had to I would go get a job.

Okay....I can go on and on about that ... arf!

Hi Lenn! It amazes me that some who are single or 1-income family members decide on a whim to get into this business without ANY back-up plan! It's not even about having the back-up jobs but, some money in the bank to start your business--our firms aren't 'employers,' but, rather a place to hang your license for your BUSINESS! How many other businesses do you know that require no money for start-up?! Why do these agents think this business is ANY different?

Excellent post, as always, Lenn and congrats on the feature!

I think very few agents are prepared for the hardship involved in running their own real estate business. They don't realize they need to see it as starting a new business. And a new business will take time before it returns a profit. You have to put money into your business first, AND keep putting money into it while NOT making much income, which doesn't cover the startup costs for quite a while. Why is it that every new agent seems to think they're going to be the exception to the rule?

Lenn,

I hire agents who clean homes on the side to help them out, especially if I know they need to work. I was a delivery driver the day I decided to go into real estate and that was 11 years ago and I love telling new agents how it was for me when I started. Fortunately I had a great broker who told me not to expect a sale for 6 months and in the first 6 months I had 2 sales but went on to being the top agent in my office. I would not give it a 2nd thought about getting a part time job somewhere if I had to but the good Lord has blessed me to where real estate provides for my family.

I worry about some of the new ones but in reality that is where I draw the line. It's really up to them.

Good Post!

I thought I was pretty well prepared to enter real estate back in '01. I had 6 months of savings, had reduced my living expenses, had a spouse with a steady income and had read everything I could get my hands on to inform myself. And then I found a broker who offered actual training and shared actual numbers about what my expenses would be like. All that prep was still barely enough to make it.

And then all the rules changed anyway LOL

Like a lot of people, I am tired of the lack of education required for entry and retention. And I also wish broker's had a higher responsibility toward their licensees. Something like Apprenticeship seems not unreasonable.

IMO the schools should tell the truth about how long it takes most agents to actually make a living. I suppose they don't want to tell the truth because less people would pay for the classes if they knew.

JUN

2009

Hmmm. Too many comments to comment on, not to mention your rather excellent post, Lenn.

I read Carole's blog earlier this morning and commented that I wish that people would stop bashing those of us who work a "full time" job in addition to being a realtor. I also noticed that you mentioned that part-time realtor/teacher again - you mentioned him in my post 10 Things I love About Being A "Part-Time" Agent.

I do think that Lisa summed it up best when she stated that it takes time for any business to start turning a profit, after the initial costs are paid. I don't think that I was that naive, but I can also admit that I've made some decisions in the hopes of increasing my business in real estate that was money that could have been spent more wisely elsewhere. Am I about to quit? Most definitely not. I have every intention of meeting the goals that I've set for myself at the beginning of this year and then some. I still have a little over 6 months to make it happen.

And you're right - there is no job that is demeaning, when it is being done to provide for one's family.

Such interesting comments..........and great post Lenn - I too have my qualms about hiring part-time realtors - because I believe its very difficult to service your clients when you're not available much of the time.......there are always exceptions........but it can be a tough job even when you work at it full time -..........as for telling realtors in pre-licencing to have 6 months in the bank? In an ideal world...........but I'm glad that it isn't a prerequisite - otherwise i never would have started real estate..........i had no money in the bank - freshly divorced and 2 toddlers.........and real estate was do or die for me...............i did.........:-).............I sold a place my first day - and considered my self blessed..........I understand its not always that easy a start though....

I do BPO's as my part time gig but whan I get a lot of orders it gets to 40 h a week job then I do the rest in weekends and late at night. like now:

Funny I just got a bpo it was assigned today: I look up the address in PV and this is one of the most expensive homes in the Phoenix metro area: 18,000 million I said wow that is a challenge. !!!! I want my fee increased and hopefully I can find some comps that I can use. I was like wow that is a change from what I normally have to do bpo's ///// the other day wa at the other end of spectrum doing one for 45,000 . Least the millions +++ one was a very nice drive in the neighborhood.

I do BPO's as my part time gig but whan I get a lot of orders it gets to 40 h a week job then I do the rest in weekends and late at night. like now:

Lenn - Some great words and I don't think that some people are cut out to sell Real Estate, great feature my friend!

Vegas Bob

Lenn as usual -- a great post on a very important issue for today's agents struggling to make ends meet. Also, so many great comments. I think it is a great idea for this Post to be in the public domain as I don't think many consumers understand how our business functions and we do/can suffer the same as they do.

I'm fortunate that I and my husband are both federal government retirees (I was an early out at 52 in 1994) so we do receive monthly annuity checks. Plus, we do not have a mortgage and paid cash for our vehicles. I honestly think that some of my/our reasoning for handling our finances this way (we had been strongly advised to finance these purchases) was due to our parents experiences during the "Depression" and how we were raised -- if you couldn't afford something, you didn't buy it. Except for a major issue such as a home -- and purchasing that house was strictly controlled by loan requirements to make that purchase. We did invest -- which was paper money and were so impressed with what we had accumulated. And now -- the majority of that paper money has dissapeared.

It is beginning to seem to me that every generation will go through such a transition as the political party that are in control of the governement reaches a tooooooo high level of corruption and is exposed and we all suffer.

As an active real estate agent I became amazed at the no down payment, etc. loans being offered. And now -- here we are today. An unbelievable, incredible situation of greed to behold with so many honestly suffering citizens.

I totally understand that active agents without any backup cash flow need income to support their families and if they can find a supplement that is certainly not demeaning in the least -- there is nothing demeaning in doing your best to supporti your family. The one issue I have with this is that: If they have clients such as Lister's or buyers w/questions that they make themselves available/respond to their clients and other agents with in 24 hrs. They have a responsibility to their client to serve their interests.

Sue

Lenn - good points .... people and systems taking advantage of others are as old as this world and probably will never change...lots of times we let these people do to us ... so this doesn't come as a surprise..when you add external circumstances - like this housing crash (again created by few to many) the focus changes...as real estate practitioners we need to make a conscious decision why we chose this profession .. shortly saying - do we plan to earn an income just by taking what comes our way, meaning whenever someone someone comes through the door or calls, or by focusing on what needs to be done in order to generate leads, contacts and connections...do we have a plan and know where we are going? etc...

There is no shame in taking additional jobs! Those who look down at others have a problem with their own insecurities or are just 'sorry pretenders' in the 'winner's circle' (read whiner's circle)!

As real estate professionals, however, we need to decide, just like any other business professionals, why did we chose this profession, how we are going to build our business, what we need to do in order to sustain up and downs, cyclical periods and adverse situations. This business is no different as any others...it is obvious that we have to tighten the belt when the times are taugh... but we need to have a plan what to do in good and bad markets...

When the market turns - what will change? More people coming through the door or calling?

With smiles,

Bo in Yukon

Totally agree. Some of us jumped in a good market, worked hard and never had to use that back up plan. But those of us that were smart, had one.

I also agree about the level of entry, and just agents not knowing what they are getting into.

But I also was recently amazed when I found out one regional brokerage (quite large here) informed me they can dictate where and when their agents work other jobs! In fact, I had one BIC, BRAG to me about firing an agent he "caught" work at a car dealership, and that it "wasn't an appropriate position for someone with THEIR company." He actually asked this person to leave their office, as I guess it is in their company policy that all jobs have to be approved. Talk about snobbish.... Sheesh.

So many agents have no clue what they are getting into regarding the costs of having a real estate business. Brokers are so anxious to get bodies in the office, they don't tell them the realities of what goes on.

Tina in Virginia

Tina. BINGO!

Bee. An employing broker can return an agent's license at any time for any reason.

Bo. We're going to see more agents take other jobs. Might as well get used to it. Many will stay and let their license expire. Many will try to work at selling real estate part time.

Robin and Sue. You are fortunate. Many licensees have retirement income. It's the younger who do not and they just might not be able to make it.

Robert. Agreed. Not all licensees are either.

Elena. Funny. Of course more agents are looking for BPO work now too.

Liz. I suspect that many of the agents with part time jobs may not have been licensed for very long.

William. I did have a policy about agents working as agents full time. That applied to agents in my company because I provide them with more than enough referrals to work full time. Agents in other companies that have to generate business in this very slow market just may have to take part time jobs just to pay the rent.

Maria. Indeed. In fact, many of the mega brokers operate pre-licensing schools as a recruiting resources.

Sarah. The problem with apprinticeships is "who's gong to pay for it?". Who's going to pay the apprintice?

Russell. HA! I've hired agents to file, audit contracts, file, help other agents with inspections, help with web site updating, registering web sites, etc.

Lots of stuff. If an agent has a skill, I'm ready to pay for it.

Lisa. Indeed, and starting a new business, as we know, requires capital.

Debe. You said it so well. It's a business.

Sally. I agree completely. Work is work.

Lana. Tougher pre-licensing will prepare better new agents, but they still need money to build a business.

Hi Lenn - The title of this post really drew me in. You are of course (as usual!) right on. Work is never demeaning. It can only be demenaing if we let ourselves see it that way.

Stephen. Right you are. Most of us agree. I wouldn't be embarrassed to see a known real estate agent waiting tables. Neither should they be.

Alexander. They need to add hours, and teach the basics of how the agents operate as a business.

Margaret. Indeed. Do a good job, whatever it is.

Terry. Short of cash and shor of business. Of all the agents I've hired over the years, not a one has been able to stay in business without the business I gave them.

Fred D. I dispute your premise that the industry needs to get younger.

Of course, lead generation is the key to sound companies who can compete. Age, however, is not a barrier to lead generation.

The older generation is more likely to have the capital to sustain a real estate practice until the agent has developed their niches and begin to generate business.

Don't throw older agents under the bus until you know that they can't perform. We are far more likely to succeed than a young person with no capital.

Heather. Indeed, it's more important to know the risks now than ever before.

Patricia. And that includes all types of work.

Bryant. Of course real estate practice is a business. Understanding that is why you succeeded.

The criticism isn't of agents who take jobs. It's questioning whether or not they were prepared for the real estate business they entered.

Lenn - Not only prepared, but ready to take the steps necessary to make it succeed. It takes sacrifice to build a thriving business and although you should never sacrifice your family to anything, you will have to learn to be creative with money and time.

Matt. Of course. Sadly, many don't understand until they have put their license with a broker and then the broker says "go out and find some buyers and sellers".

Lenn, our family has the proverbial eggs in one basket, my wife and sister are agents. It is what it is, and folks do what they have to do. That said, transactions now are tough, only those that are actually producing right now know how to think outside the box with ever changing scenarios and situations. To enter real estate right now without guidance would be a nightmare, andf if you've taken the last couple years off and want to come back, good luck! You'll need it! Great post...

Lenn, don't think that anyone trying to make ends meet in this economy is bad or should be belittled by another. What I do think is bad is when they are actually working PART TIME in a business that needs 100% of your focus. They turn it on and turn it off. Sputter and stop. Not a way to run a business. There have been so many valuable people disappear in the Rain over the last year it's a shame. Good agents that poof disappear. I really wonder if we are weeding out the people that truly deserve to be?

I agree with you. The school we had to attend wanted our enrollment, over $1,000. The professional associations want our money, to numerous to quote costs. Post licensing education and designations all want money. And our broker gets desk fees and splits. Then we have to purchase our own business cards, signs, postcards, website, etc. OMG! Then, when you're in business, you're seen as food by mortgage brokers, title companies, inspectors, appraisers, and others.

Frank and Jodi. I am puzzled why anyone would enter this business at this time.

Lyn. My post didn't address the matter of real estate agents not having full time to devote to their clients and business. That's a completely different issue. However, there are agents who were full time and just never got off the ground. Then when the market tanked have to take jobs just to make ends meet. Whether or not they'll be back in the business full time is another matter. I suspect some will not.

Marianne. I believe that most are prepared for start up costs. However, many if not most are not prepared for living expenses until commissions begin to roll in.

Hi Lenn- I remember my mother and grandmother telling me there was no shame in an honest dollar, and told me if I cleaned toilets for a living it was better than anything dishonest. I have now taught my kids the same lessons.

Now to being a Broker/Owner and hiring those freshly licensed Agents. I can honestly say I have never done this....it just seemed like a lot of liability to me. The Agents that worked with us had experience, and I did a money training (Kathy style) with everyone. Write out your bills, what it cost to run your business, etc. Ok, now here is what money you have....now make it work. At the end, oops you forgot another bill.....but you have no more money, so now make it work. Reality 101.....

Kathy. I have hired new agents right out of real estate school and trained them my way. I prefer it. Most agents who already have experience rarely make good buyers agents.

Now that they are all brokers and I refer the business to them, they outsell other agents to whom I refer business by about 4 to 1.

I agreed the system takes them in and spits them out. On the other hand ignorance can be bliss. Not knowing how easy it is to fail may actually keep someone from failing. When I started my first business I did not know how bad the odds where and I was a success at it for over 10 years.

Lenn,

I've been Licensed for 6 months. And I have a full time job. My goal is to become a full time Agent next spring. I'm currently setting money aside for reserves (6 months worth). Fortunately, I'm retired military and my family is covered in regards to health insurance. My wife has a full time job. The key for any Real Estate Agent is to receive proper training from their Broker. Just my .02 cents!

Lenn.... I think this is very timely for so many. I was thinking about writing a post similar to this about a week ago, but I just had to walk away from blogging and commenting for a week. It was just a bad week in business, .... well, actually the last 2 weeks. In any case, I know some excellent loan officers and realtors that have been looking for 2nd jobs. There is no same in this as you have mentioned. The shame would be those managers/owners that higher people and not explain that it can be costly, tough, and that you should have some money saved. Sure, this all would be common sense, if you do your research. But it doesn't help when the manager doesn't help you. good post.

jeff belonger

Gene. Right you are. I've been in and out of several businesses. Loved them all. However, with five children to support, sometimes the need for security made the decisions for me.

Keith. You've got a good foundation on which to build a fantastic business.

Jeff. Of course, loan officers, processors, etc. are having the same kind of business reductions that agents are. Agreed. The average agent is NOT prepared for the real estate business.

I think your post will help many agents decision to get a job much more acceptable, without feeling like a failure. You have a heart of gold, Lenn.

Dawn. My goodness. This is not a matter of failure. Some agents who would otherwise be very successful in the business are having a hard time now.

We are, after all, at the mercy of the market, the mortgage market and the general economy.

No one considers folks who are laid off their jobs failures.

For some agents, it was just a matter of unfortunate timing.

Lenn, I just wanted to stop back by to read the rest of the comments and have to say that you have created quite the discussion here! I think this is a 'sore' subject for alot of agents--too 'proud' to go for the part time job and others who think that if you give it all you've got, you'll be fine in this business! For me, I just won't give up trying--if I have to continue to work 18-hour days, I'm NOT caving! Some may think I'm stupid but, I feel so strongly that those of us left standing, who have had our names out there front and center, will garner the lion's share of the business when the market turns around. And, for now, my theory is working just fine!

Have a great week...

It is definitely NOT about good agents having to do what they have to do to keep a roof over their heads and insurance coverage for their families. My only issue is when agents try to do both but clearly cannot...aren't able to attend inspections, appraisals, even present offers in a timely manner. But they keep holding on because they still think the money is "easy".

My prayer is that those of us who are surviving and even thriving will be able to help the industry truly become more "professional" in terms of standards and licensure. I'm not holding my breath though.

Lenn - I realized when I was in school just how "difficult" the business would be. I realized it in a very roundabout way as well. I noticed whenever I asked a broker, teacher, or agent how much an agent could or should make in their first few years, I never got a solid answer. Now of course, I understand that no one can peg a number, but no one could even give me a good target to base my goals on. It shocked me to think that no one was willing to give me an idea as to where to set my own bar. It was then that I realized why no one would answer me straight - there is no straight answer. Agents vary so widely in how they operate and succeed that no estimate would even be near correct.

PS Thanks for the mention. I have to go read Steve's next post now.

If I thought that jobs were demeaning, I wouldn't be a Realtor! LOL! I am reminded about a lesson from 11th century "Brother Lawrence" who washed dishes, tirelessly, day after day...'every one,' he said, 'is a little buddha' (meaning a little meditation). It's definitely not what we're doing, but what we think about what we're doing that is determining our experience and success. I really enjoyed reading this post and wonderful discussion. thank you!

Lenn,

I'm a firm believer that God helps those that helps themselves.

I know in my career when I too had to get a part time job that I worked early in the morning and then showed up at the office and worked into the evening...

whatever it takes!

In my licensing class which seems eons ago, one of the trainers told us the facts of life so we would not have false illusions. I am thankful, his advice took only a few minutes to deliver, but was a real eye opener.

Colleen,

I have to admit it is hard to attend inspections, appraisals and submit offers. But I have fellow Agents who are willing to help me. We're a "team". Even though I'm part time I have noticed there are "full" time Agents who aren't holding up there end of the deal. I've shown at least (3) properties within the last two weeks where it seems as though they've put their sign in the yard and walked away. And they weren't REO listings. I'm not trying to bash anyone. Whether you're full time or part time you still have to be professional. And I'm fully committed to making this a better industry!

Colleen,

JUN

2009

Lenn. Very true. Realtors need to spend lots of money to get started and to continue going. My fiancee was shocked by my monthly advertising revenue UNTIL she saw my commissions! It is easy but NOT WISE to cut advertising when things get tough. However, that is what brings in the money. Also, like Lenn said-don't forget about retirement along the way.

Mark. That is one thing that I've noticed about the agents who rely on me for their business. They spend money on vacations, but not one dime for advertising.

Keith. I admit it's hard work to work a job and sell real estate too. However, although you have a team, with true fiduciary service to a buyer or seller, the agent the buyer or seller hired to represent them is in the best position to do the best job for the client.

Barbara. Indeed. At least with the facts, folks have the warning to plan, save and be prepared.

Mara. Right you are. I didn't feel like it was demeaning when I helped a seller clean out her basement full of dog crap from a renter. I just did it.

Matt. Of course, many wouldn't tell you how much you should make because they might not have made very much. There are ways of estimating expenses, but the earnings are really up to the individual's ability and resources.

Colleen. I'm not either. The NAR and local RE schools will be promoting and recruiting again.

Debe. For those of us with good systems in place and a regular understanding of promoting our services, the business will come. However, it is not a good time to enter this business. That's for sure.

So I am going against the populous here. While there is no shame in doing what you have to do to pay the bills; accepting one's current reality to mean that they are not making it and they have to subsidize their income creates more of the same. What you focus on expands. It perpetuates.

You are so right that most agents do not even know how much money they are going to need to start and keep their biz going. One of the biggest errors I see is that agents view their real estate biz as a job and not as a small business.

Lenn- you are right about the prelicensing too. The reason they don't want to tell students all of that is because then they make less money because less people would pay to get their licenses.

Both Nestor and I are in real estate, consulting and coaching. Neither of us have security in a regular paycheck. When the down turn came we were very slow and began to get sucked into the , oh it is slow, mentality. Then we changed our attitude and we learned a lot more about what you think about, how mentaly you create your reality, etc. We also put our faith and trust in God that he would either help us or show us we need to get out.

Then it comes to what are you passionate about. Because if you are truly passionate about your business in a real way; you will find a way.

I am more the type that likes to sink or swim. Of course, Nestor and I have made money in real estate and having that cushion helped us in the bad times. I have always been successful in real estate no matter what the market is. I also don't watch the news:)

Why is it that we are so busy and have business when others are leaving the business? It is not that we are better than other agents, it is our belief system, the belief that there is always money to be made in all markets. When others are slow, it is the opportunity for you to jump in and really create some great niches.

But I have also found that most people live way beyond their means. No matter how much money they make they will spend it. Like I said on Carol's post: I know so many families that homeschool and live on one income salaries or own their own businesses. They learn how to be frugal. There are so many ways to cut back. Most of us are so spoiled. If you have to stop getting your nails done; than that is what you have to do. If your friend has to cut your hair for a discount instead of going to the salon; then that is what needs to be done. If you spend $40 on a pair of shoes; you may have to go to Target to get your shoes. Don't go out to eat so much.

I heard a financial consultant do an interview with a couple once and it was quite an eye opener: They needed extra income so the mother of 3 and her husband decided mother should go back to work. By the time the consultant showed them how much the expenses would be for her to go back to work: child care, gas, insurance, oil changes, tolls, clothes to go to work, faster foods, etc- this family would be paying for the mother to go back to work. This was very eye opening because people don't realize that it costs money to go to work too. Instead it was suggested that this mother get a part time business working from home. Katerina

JUN

2009

Lenn,

157 comments! I admit I hit "control/end" and skipped to the end, but then I read Katerina's comment. I just came from Gary Wotal's blog on decluttering, and that has application in many areas of life.

We do what we know to do, and I look for ways to do that better today than I did yesterday, so that tomorrow I'll be ready when opportunity presents itself.

Mike in Tucson

Katerina. I try to look at others as individuals with their own experiences and backgrounds and not through the prisms of my own life and experiences. In many ways, the way the NAR, the schools and brokers suck the unaware citizens into real estate is almost a shell game. We're not training citizens to be competent and successful real estate agents, which is why I object to folks calling real estate sales a "profession". We are recruiting people into brokerages to feed the hungry monster that is the "overhead" by taking 50% of their commission in return for about 25 square feet of chair and desk. That's very high rent. Of course, many offices are different but that's the classic "mega broker" that holds most of the new licenses.

All of the above said, if real estate schools better informed students of the facts of what it takes to generate business, perhaps some would look to their personal situation and say to themselves, "Geez, where am I going to find folks who need an agent?" If one of every 10 persons I know purchased or sold a home in the next year, that's not enough money to live on. What will I do?"

Mike. Thanks. We all learn from our experiences and try to do better. I hope.

Lenn, I really enjoyed this post as it opens a great dialog. Your comments from your readers only make your posts stronger...

Lenn - you are such a wise owl.... and I have to say that you are so right.... do what you have to do... and do it with diginity... life is short and everything is subject to change.... including this market

JUN

2009

Lenn, you definitely have a gift for teaching and sharing your wisdom and knowledge. I haven't been in real estate long enough to have experienced the upswing in the market-- it's only been declining. It may be a good thing for me-- I'm learning to work harder and smarter, hopefully preparing for the market to improve (before I'm too old to enjoy it!).

I've seen many agents have to leave for steady jobs because they are the sole breadwinners. Some were seasoned, excellent agents, but most were new agents who just didn't make it. I started my home staging company to supplement my income, which seems to work for me. Both jobs are flexible in hours so I don't "short-change" either one. (I'm still reeling over the agent who thought YOU would attend their home inspections!) But still-- neither one is steady income. Real estate is a lot harder than we're told in training. Thanks for getting the word out-- I just hope the "newbies" are listening.

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Lenn Harley, Real Estate Broker, Virginia & Maryland

Leesburg, VA

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Lenn Harley, Homefinders.com, MD & VA Homes and Real Estate

Address: Lovettsville, Fairfax, Arlington, Alexandria, Stafford, Woodbridge, King George, Fredericksburg, Leesburg in VA., Rockville, Laurel, Columbia, Baltimore, Waldorf, Frederick, Eastern Shore, Bowie, Harford, Annapolis in MD. , Maryland, Virginia

Office Phone: (800) 711-7988

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Maryland and Virginia real estate agents and brokers serving buyers and sellers with experience. Search listings in Maryland and Northern Virginia and get daily updates of new homes for sale by e-mail. Contact Lenn for a tour of homes. REALTORS available every day for home tours. Homefinders network of experienced agents and brokers includes new home specialists, resale specialists and luxury home experts. We can help you with your home buying needs. Homefinders offers discounted 5% listings for Maryland, Northern Virginia home owners. Experienced agents helping buyers and sellers in the Washington Metro area since 1985.

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