Can anyone give any insight whether to enter into Residential or Commericial (retail or investment) as a sales new agent?

Asked by Sandra, Oakland, CA Sun Sep 23, 2012

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Scott Hulen, , 64068
Mon Sep 24, 2012
BEST ANSWER
A mistake so many make getting into the business is I’ll go get my license then I’ll figure out what I want to do. This is the #1 reason 90% of new agents FAIL! You need a business plan, you need to do research, you need a projected profit & loss statement with a detailed list of expenses, and you need to know how you are to provide for yourself and your family when you go 3-6 months without earning any income from real estate. If you already have a job and are just going to do this “part time” you still need all of the above, many part-timers hang on for 2 or 3 years doing 2-3 transactions per year then decide this was a huge waste of time, money & effort. (If they had put together a business plan many would have not gone into real estate) Commercial or residential depends on you and your business plan. A quick note on marketing: real estate usually begins with your circle if your circle encompasses many business owners, a presence at the chamber of commerce for many years and you personally know a lot of these types of people then gravitating towards commercial may be a good decision. If your main activities involve blue collar friends & family then residential might be a better fit. The bottom line, a business plan will help you evaluate your strengths & weaknesses and give you a road map going forward. Good Luck!
1 vote
Scott, I hear you. My RE finance teacher said the same exact thing. Common sense isn't it.
Flag Mon Sep 24, 2012
John Souerbry, Agent, Fairfield, CA
Mon Sep 24, 2012
The main difference between residential and commercial (I do both, though only small commercial) is that with residential you're dealing primarily with "home owners" and with commercial you're dealing with "businessmen." Their motivations, needs and methods are different, so it comes down to which of these customer types and property types you want to work with. Both can be lucrative, but both are also highly competitive. Both also take mentoring to learn the ropes and require a considerable amount of time and effort to establish name recognition in the market. But there is one major difference that you should consider - organization. In residential, you don't need to work for anyone else once you move up to having a broker license. You can form, operate and be your own organization and develop enough business to make a very good living. Compared to commercial brokerages, the residential customer base is very accepting of independent brokers. Commercial buyers, sellers and leasors, however, often prefer to work with established organizations that have in-house attorneys to assist with complex sales contracts and leases.
This is just one aspect to consider - best of luck with your new career.
1 vote
Thanks for your input about the commericial real estate business. I will just have to interview all of them in the SF bay area. Thanks.
Flag Mon Sep 24, 2012
Annette Law…, Agent, Palm Harbor, FL
Mon Sep 24, 2012
Sandra,
Considering the various aspects of real estate is an excellent option for those who need to take control of their future. Achieving that result, however, requires taking control of ones present by doing the appropriate research regarding such important decisions as starting your own business.
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Scott has provided excellent guidance.
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Starting ANY business, be it real estate, a sneaker store, vegetable stand or a vending enterprise, one needs to know:
1. The size of the local market
2. What are people willing to pay
3. Where are these people located
4. What is your access portal to these people
5. Your Cost of product sold
6. Source of product sold
7. How much of market must be captured.
8. Personal survival costs.
9. Business costs
10. (8 + 9) +30% = minimal business income
11. Income goal in 1 or 2 years.
12. How many sales (transactions must be competed to reach #10?
(until verified by agent/broker assume $5,000 per transaction)
13. How many sales (transactions) to reach #11?
14. Can you hold your breath long enough to reach #11?
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Failing to complete such analysis defaults the licensee to residential real estate where they usually hang around for two years and drop out.
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If you are good at spotting where the money is and agile at calculating ROI and being a deal architect, the 'emotion free' arena if commercial could be very appealing. When you get paid it's really big chucks of money.
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Residential would rely more heavily on assuaging emotional conflicts through mastery of neuro-linguistics and constant, persistent, never ending marketing programs, and accepting the fact their are seven (7) organizations or individuals (of which you have zero influence) involved in every transaction that can sink every deal.
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When such analysis has been completed, to the best of your ability, that would be a great time to meet with an agent or two and ask them to share their reality with you. Show them your analysis and get their take in regards to the local real estate market. Follow that with a meet up with a broker or two or three for the purpose of seeing who, if any, has a proven program in place that demonstrates you can get into deals as quickly as possible. The only number you need to see in the average annual transactions, per agent of THE OFFICE. National average is 6. An office with an effective program will know the socks off the national average. The average transaction count IS validation of their system and process.
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There is always room for those who are masters of their craft.
Welcome aboard,
Annette Lawrence, Broker/Associate
Remax Realtec Group, Palm Harbor, FL
727. 420.4041
http://RealEstateMadeEZ.us
1 vote
Maria Cipoll…, Agent, Coral Springs, FL
Mon Sep 24, 2012
Starting a business has it's challenges. Start searching for an inspiring real estate professional that you can consider your mentor, explore your market and competitors. Inspiration can come from different sources.
Start preparing your profile describing information on what you do and what diferentiates you from the other agents.
Be sure to include information about the area were your services is provide.
How do you plan to market your business?
How does it benefit your customers to use your services? ( from the customer point of view)

The answer to this questions may help you to decided in what area are you going to start focus.

Best of Luck,

Maria E. Cipollone

http://www.Flahomespecialist.com
0 votes
Great Advice. Thanks.
Flag Mon Sep 24, 2012
Cindy Davis, Agent, San Diego, CA
Sun Sep 23, 2012
I think the answer is about you and who you would rather work with. As a residential specialist, I enjoy supporting buyers and sellers through the often emotional process of a residential transaction. It is an emotional process and I have built long lasting customer relationships because I am good at handling the emotions.

From my understanding of commercial, it's far more matter-of-fact and based primarily on numbers. Everything is business oriented and is always about the bottom line.

That said, why don't you go on some informational interviews - at a couple of commercial brokerages and a couple of residential ones....I bet that would help you sort it out!

Best of luck.
0 votes
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