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Are You Honest With New Real Estate Recruits?

We don't seem to recruit as many agents as we like..as a matter of fact..when I sit with them I tell them the good..the bad and ugly of real estate. Many times I am not the first person they have talked to..in most instances..they have no idea of the expense or the time required needed to be a true professional!

It Needs To Be A Great Fit All The Way Around!

For the Agent..For the Broker..For Their Peers!

When I listen to these recruits without any experience and the only knowledge they have is the real estate class and exam..and automatically they think..I'm going to make boatloads of money.

They expect high commissions right off the bat
They expect to make tons of money real quick
They want me to provide resources to a get rich quick scheme.

I don't judge..I just sit and listen!

But I start to see their face change when I start talking... about expenses..about what real estate entails..and there is a great chance they won't make money right away...when I start talking about joining the board..when I start talking about investing in themselves and in their businesses.

I lay it out for them...and often times they do not return...because truly I give them the hard cold facts..and in truth I don't want anyone wasting their money or our time..and in most instances..they really don't have anything to fall back on...such as savings..or funds to get them through the rough times.

In 2006 and 2007 I recruited agents who have gotten out of the business before they even got started..in 2008 I was smarter..and wiser..and I believe many of the new recruits are too! How about you, when talking about real estate with new recruits are you honest enough with them? Are you seeing fewer new agents hitting your market place?

About the author- Midori Miller is a licensed real estate associate with CENTURY 21 Sundance Realty, Real Estate Trainer and Manager. If you are interested in a career in real estate please contact me! All calls and inquiries are confidential. CENTURY 21 Sundance Realty is located in Volusia County with 3 office locations to better serve the public. Daytona Beach, Ormond Beach and Ormond by the Sea. midorimiller@yahoo.com

Posted by Florida Real Estate Trainer | Daytona Beach After School Training | Midori on 11/15/2008 01:20 PM

Comments (52)

Recruiting in the Training Channel

new agents hitting your market place, be honest with new recruits, century 21 sundance realty, midori miller, daytona beach real estate

Originally posted at: Daytona Real Estate Training: Are You Honest With New Real Estate Recruits?

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52 Comments on Are You Honest With New Real Estate Recruits?

NOV

Hi Midori

So many companies hire new recruits without explaining the real estate profession. They have their license and not a clue how to make a living.

Thanks for sharing

Rich

Charlotte NC

I AM seeing fewer new faces. AND, like you, I ALWAYS tell Realtors wanting to join our company, the good, bad and the ugly (though most know). On the flip side of this coin, what I am seeing with some brokers, they are so desperate to fill seats, they are taking in "some" agents with BAD reputations. Just as bad as NOT filling seats.

That has always been a pet peeve of mine. I don't do the recruiting but many many times I train new agents that I know won't make it and I want to tell not to waste their money.

Kat-I see that happening in our market place too! One thing I will say...we are selective..we just don't take anyone...it has to be a good fit for everyone but more importantly they must have a good reputation in town..in our company...those that don't...don't stay!

Monika-I knew you could relate to this..its frustrating as a trainer..can't say I recruit much..because we just don't take everyone that comes knocking at our door..but I have trained quite a few for them to start a career..in restuarants..a cashier in a check out line..it disappoints me..but then again its not different from a listing right?????

I have had to have some real hard conversations with agentss..you are a has been..you aren't going to make if you continue to do things the same...I could go on and on...but the hardest conversation that I have to have with someone is working with them for a few months to get them geared for a real estate career is the one where I say goodbye!

There are some companies that have real estate schools and they keep cranking out new agents, without giving them an accurate view of the realities of the market.

You are the smarter one for being honest upfront and setting realistic expectations. Doesn't mean you are negative about the facts just presenting the right real estate environment tone so the new ones entering the business can make informed decisions. I have followed that creed myself. I find that certain companies judge the success of the manager/team leader by the number of warm bodies that sign on. When in fact the jusdgment should be on retention and helping all stay successful not passing by in the night, in one day out the other. The revolving door is what I called it. You have to be honest. If an agent then elects to join you know you have one that truly wants to work the business and knows they will have work hard and have money in the bank to fund them for a period of time. Preparation and being realistic keeps that door from swinging. Good luck to you!

All of our agents are required to complete a business plan. This helps them focus on reality and sets the stage for expectations and is a topic for quarterly reviews, following to monthly reviews if gaols are not being met. My logic is simple - if you aren't good at budgeting, then this affect my budget too. So, I will help you with this and then hold you to it with the tools, systems and support that my office and franchise offers.

Rich-some of our schools shut down! :( But we do have companies with real estate schools in our area and massive companies too! I think I get frustrated with the fact..some agents sometimes only do 1 or 2 deals..but the problem is you do the entire deal with them..when they spend all of their time in your office then....Brokerages need to provide kick butt training...and fortuntely today ...many do!

When I started in real estate..one of the brokers I worked for told me he hoped that I would make it...I was leaving him...why...he gave me some great training....but it was handed to us..the leads that is..I wanted to function as a business...and sometimes brokerages..do not take the time to teach new people this.brokerages forget..maybe their humble roots when they were new..or they didn't bother to keep current with the times...or they are afraid they will have agents who will leave them..share the information...teach the newbies and be very honest with them...I say give the facts..otherwise you won't have to worry about an agent leaving you because they are successful...they will leave you because they should have never started in the first place!

Hi Connie-I'm realistic..I live my life the same way. Yes the warm bodies..our offices are too small to have warm bodies...warm bodies costs big bucks sometimes...I think about those that I trained to go off and work..somewhere else..and out of real estate..the screening process is no different with a buyer or seller or even potential new REALTOR.

I think that sometimes recruiters/managers are so focused on the numbers and are being pressured to recruit that they hire anyone who can fog a mirror. This is so unfair to everyone. It should be quality as opposed to quantity. If, after the inial interview, a recruiter knows that the potential agent will probably not make it they should make the decision to pass on that person.

Many times I am not the first person they have talked to..in most instances..they have no idea of the expense or the time required needed to be a true professional!

Hi Midori,

You make an excellent point. I had planned to get my license this year. However two posts here on ActiveRain, one by Jim Crawford and one by Jason Crouch, made me realize that I need to be better prepared before I get my license. Being honest with your new recruits will help you build a stronger business in the long run. We all seem to know about brokers who were ready to hire anyone that could fog a mirror. They thought it was only a numbers game. That attitude has actually been bad for real estate.

Respectfully,

Bruce

Midori, I don't actively recruit but when I do come in contact with someone considering getting their license I tell it like it is. I've been too frustrated with Brokers and Sales Managers whose only purpose is to increase their numbers....but what good are those numbers if they are non-producing?! I was a bookkeeper for a large agency before I became licensed so I have a little bit of an edge on most ~ I know what the real cost is, in money, time, disappointment, frustration. I tell people if it's in their heart to do it, then do it...if they think it's a way to make lots of "quick money" I tell them to forget it.

I think if I had been told I would never have tried this. By the time I realized how expensive, I wasn't about to lose what I had invested to that point. I wasn't well prepared, but I have been blessed and it worked out. There have been some scary times though!

Thank you for writing this blog entry. I think we should include this matter-of-fact speech on the first day of licensing training (after they've paid for the course, of course).

We do bear some responsibility for the delusion of easy money in real estate if we do not prepare the freshman.

I think it should be much harder to become a Realtor. I would suggest requiring a college degree, a criminal and credit background check, and more. This is an important and professional field. We are in others' homes often. We help others make very important decisions.

We should do more to guard fresh agents from this.

One of the reasons I keep my license in referral is because I realized the expenses of maintaining a full time real estate career were not where I wanted to be right now. If I hadn't met a great agent who laid it all out to me up front I might have made a very costly mistake. Kudos to you for being upfront about what it takes to succeed in this business.

So many get into the business thinking all they need to do is sit and wait on the phone to ring and they will get rich with no effort. Very very few people understand this business or how we get paid. And the public perception that we all make millions a year from doing nothing is too prevalent. I always tell people it is stressfull, it is hard and would only recommend it as a profession to very very few.

We like your honest approach to real estate and how you relay that to your new recruits. A nerve of steel and a heart made out of stone make for the longest lasting realtors. New recruits need to understand how difficult and competitive this industry is so they know what to expect. Furthermore, most companies currently give the false impression to newcomers that leads will be waiting for them if only they are patient. THIS IS NOT TRUE FOLKS. A professional realtor is not going to give up his/her leads no matter how busy they are. You have to earn them. Be wary of this when you go to an interview with a broker and he tells you this line to lure you in. You have to make it happen, noone will hand you leads no matter how nice of a person you are.

Lastly, large brokerages allow a new agent the ability to advertise themselves..... FOR THE BROKERAGE. That might be the only avenue for yourself when you first start out, but keep that in mind for when you finally get a good clientell and referrals from past clients as they'll be looking for your face in a print magazine or elsewhere. independent brokerages allow more room for growth but that can only happen if the agent has experience, expertise and a good understanding of how the market works.

We'll say it again, NAR simply has to make it tougher for realtors to get into this industry and has to put more emphasis on training them without offering endless accreditations which are only in place for NAR to rake in a few more bucks. There has to be a genuine attempt by NAR that shows they care about their members as the only end result being the current trend; 9+/10 realtors dropping out after their first year. That trend has to be reversed or everyone loses time, energy and money on these newcomers.

Also now we hear about the usual get rich schemes like real estate riches, etc. The sad part is people actually think this is a good time to get into real estate. They will find textile, wood, etc costs have gone up, so flipping a house will be costlier, and the time that a house spends on the market will take longer=more mortgage payments.

Good afternoon ma'am,

We are seeing fewer people going to school. I let them know up front what it is going to take, hence the broker doesn't want me as a recruiter. Shucky darn.

BTW, congrats on the Feature Star!!

Great post... I think the same goes for the insurance industry. We lose close to as many as we hire. I dont do it myself, but I am in an office where the newbies are trained!

Hi Midori

I love it when someone comes to me and says the want to become a Real Estate Broker. My response is always the same. I hope you have 12 months reserve in the bank and you find a company that has a mentor program or someone thats willing to teach them the ropes. This business is not a get rich business but requires a lot of sweat and hard work to keep up with all the changes in the market. If you're not willing to pay your dues, you're not going to succeed.

Wanda

Peyton, Colorado

What a really great post. I am a new agent, being licensed for just over a month now. My broker sat me down and explained EVERYTHING to me in detail, the money upfront that I would spend on training and Realtor dues and whatnot. I made the decision to jump in. It is very hard, especially with the slower economy, to establish yourself. I figure in about 5 years I will really finally feel 100% comfortable and confident in my abilities, and even then, I believe that ongoing training is really important. Thanks again!

People are always as surprised as I was to see how many ways that 6% commision get sliced and diced. This misunderstanding drives two major problems that we have. A very high percentage of new agents that are out of the business within one year and the constant pressure to cut our commission because the seller's do not understand how expensive it is to do this job right.

I am still astounded that any sentient person would embark on a real estate career today.

Midori... I haven't read the comments..... but in my profession, in regards to recruiting loan officers or branches, new or experienced, I find many that are lied to or misled just to get them in the door. Gee, sounds just like some loan officers on how they treat the consumer also. But I always give the pluses and minuses of my company in what I think....

jeff belonger

I have the "square" speehc telling them they need to square any number that they think it will take on making a buck. 100 cold calls will have to be 10,000. 500 postcards will have to be 25,000,10 hour work week will be 100 hours. As your experience is I usually run into them workign at another firm

I own a small firm just outside of Charlotte, NC and I believe it is VERY important to be upfront with new agents. There are several large firms in our area that concentrate on "seat fillers" and end up with a lot of problems.

My opinion is the costs and marketing should be taught before the classes start so potential Realtors know what they are getting into before they sign up for the class. People just see the commission percent and totally believe we get that full amount. The public just does not know.

I have seen plenty of agents that get hired, that where aware of the costs and fizzled after 6 months. For some reason, real estate looks very easy from the outside. A friend of mine, thought she could do better -> she is working 2 jobs now to catch up on her debt. For some reason, she thought I was withholding "the secret" and was very upset with me, until another friend told her that my secret was "working my behind off". Most agents that start, think they can work 9-5pm with weekends off, because they see the topproducers with 3 assistants do that as well.

I have seen so many agents come in to the business, and after 6 months never see them again because they did not make a penny. Most of the brokers let them think this is an easy way to make money, hoping some friends or family member will buy or sell a home or something. If t.hey do that avenue runs out fast then they are gone because they usually got not direction from their broker

I teach real estate licensing and I always interject stories about how it really is in my lessons. Students are shocked to hear how hard we work, the fees we pay, etc. I think they should know this going into the profession.

I'm with you, Midori! I sit down with possible recuits, explain the commission process and share a simplified version of my monthly and annual expenses. I would rather they know what they are getting into, before we spend 6 months training and consulting -- only to have them decide "it's not for them" or the dreaded "I think I need to take a part-time job".

I get asked regularly about getting in the business by many. I know that I have saved most of them a lot of pain by being honest. Those who chose to join our profession are much better prepared to succeed.

Too many people in our business are not up front from the start with new agents

I think I've always been very upfront with new recruits. Real Estate is a profession, no less demanding, expensive and potential liabilous than any other profession. I think way to many people get a license and "into the business" without anywhere near the proper preparation or accurate expectations. That cheapens our profession and hurts the new recruit and many other people. On the other hand, those who join us with proper training, good work ethics and willingness ot actually work for a living, can find our profession to be a wonderful career. I love my job, but I don't think everybody should be a REALTOR.

I certainly see more leaving then coming in right now, which I believe is VERY GOOD for our business. I love real estate because it is competition in one of its purest forms. You compete for your listings, compete for your buyers, compete to get contracts accepted, compete for better commissions, compete to be the best in your office, and even compete to be the best in the business! Its survival of the fittest and the weak are NOT SURVIVING ANYMORE!

Hi Midori,

I can answer from my own expereince as a newbie because I just started last May.

I would say that my broker laid things our quite realistically. I was told that 70% of new agents fail and that the average first year income was $20,000.

Granted, those figures were from the previous year, so they may be even more severe now.

Bob

The schools spit em out like watermelon seeds with the fantasy of more money than they know what to do with. So then they are left to find out the hard way.

Most Brokers are not honest with new recruits! Even in a good market, which no one in America has at the moment, the attrition rate is 90%+ after 2 years! AND, the most likely way to survive is to be a Buyers Agent first, but most Brokers tell new recurits the old "List to Last!" What crap! Why would anyone with half a brain list with a brand new agent, when worthy veterans abound with their tongues hanging out! MHO, but I have 30+ years to build it!

Midori, It's unfortunate that most agents are not told the truth about what it will cost to be in the real estate business. Sometimes, they're told the truth and simply choose to disregard it. Both actions result in unfortunate results. Thanks for blogging about this very important topic.

NOV

Midori, You are doing the great thing by doing the right thing. You aren't being negative, just truthful. It is up for that prospective agent to decide what is the right life path for him/her.

Midori is definetely not a negative optimist :)

I would hae loed if my broker was honest with me., I would hae known what to expect and taken nessecary precautions. But that was a couple of years ago and I know better now. But for those who ask befor they enter RE I explain how things are and prepare them so they are not surprise.

I remeber back when I got my license. The real estate school where I took my required pre-lisence courses kept telling stores about agents getting their license and sitting in an opne house the next weekend and wiritng their first deal. What a lot of bull. It was months before I wrote my first contract. Thing I had 11 or 12 sales my first year but worked 800 hours a week to make it happen.

I like this post, I may do a spin off blog about it. It is very true!

I just took over the role of recruiting director for a local C-21 office. WHEW...you are right, not as many coming along and the ones that do are tough to get. I always try to explain as much as I can, but never paint a gloomy picture....after all my job is recruitment. I let them make the decision for themselves...but they are informed.

Midori,

When I interviewed with two brokerages, one of them told me upfront how the fees can "Eat Your Lunch." Another one told me that if I were on their 60/40 split, that everthing will be taken care of.

I choose the first one and the fees literally Ate My Lunch!!. I was not prepared for the monthly fees to be associated with a Big Name Franchise, and then the cost of doing business if I was in the office. Things such as faxing, copying, mailing, we were charged for all of that. The training was Exceptional, I learned so much in the year that I was there.

But after assessing the money I made compared to the money I spent, I decided that if I wanted to continue in Real Estate, I had to do it somewhere that was cheaper for me to be a Realtor. So I took the knowledge and the work ethics and signed up with a one-woman brokerage, who was a top-producer in her office and decided to go Solo. A lot of the things that I was doing while I was "in the office," was costing me tons of money and I could do those exact things for free or less than nothing, from my home office.

I think new agents really need to know what the cost is. If you can put it on paper, that's even better. I didn't have a closing for the first 60 days, but during that time, I accrued two months worth of bills from the Big Brokerage Franchise, plus office expenses.

You definitely need some extra cash stashed away to be a full-time Realtor, or even consider doing a side gig, just to make sense of it all. There is no break even point, at least during the first year or two, so that is something people need to consider.

MeLisa Minter, Realtor

www.homesmint2be.com

Midori, great question. I would think those recruiting and being honest about the big picture will recruit better agents, agents who already know the big picture and are not naive. The one recruiting with the rosier picture may recruit more but will probably also have more turnover. I would rather get fewer, better agents that more that time is invested in (and money) that do not stay. Great point.

We do not recruit agents, we try to keep as many as our internet leads can support. We do not charge any fees until a transaction is closed. So, if you want to join our company you have to sell me on your ability. Bit of a twist to the system eh?

I interview agents, tell them about the company and see if we "fit". If so, I make the person an offer. I tell them what the fees are, what to expect, and it's a very personal thing. I try to fit each person into a part of the company they'll do best in, and make the most money in. It's a pretty unique approach. But I'm always up front about what is expected and what the costs are.

NOV

Midori, there has been a dramatic decrease in the amount of new licensees. The time is a changing. With real estate and the current economy I can't imagine anyone wanting to get into Real Estate nor having the money to stay in Real Estate. I think we will see a definite wanning throughout the States, is my guess.

MAR

I think new recruits sometimes feel like we are trying to drive them away. We are brutally honest with people. If you are not willing to get out of your comfort zone and also run your own business - you need to look for a different career. And you must have 3-6 months of funds available to live off of before you start. It's about being the right person at the right time. And if that's not right now, then they should wait.

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