Kory's Real Estate Blog

Well, I received the license (in hand) today and went to my first interview at Key Realtors.  I wasn’t surprised to hear that the broker/owner was not enthusiastic to hire students, though she does normally have one on staff.  The last student she hired was apparently a member of at least one social organization in the community (like Knights of Columbus or Kiwanis) and it sounded like he did decently, though he didn’t excel.  So I was being asked who my contacts were, which is apparently (though not surprisingly) very important in real estate.  After explaining to me the MLS/office fees and commissions and asking what I wanted to get out of the job, she asked me to give her time to think about it and give her a call next Friday.

But I’m not just going to sit and relax until then, I’m going to talk to my fraternity’s chapter adviser and another person who frequents the fraternity who works for a family that owns quite a bit of real estate in Macomb (the family’s name was even mentioned in my real estate class just today to my surprise).  Chances are, if I worked for this family, I may be working almost exclusively with them in commercial/rental transactions, and I’d hope that I could get to know what they were looking for in such situations, so I’ll talk to those people and let the broker/owner know what’s going on when I call her next Friday, hope it turns out well, otherwise I wouldn’t expect much.

Other than that, (like I just mentioned) I’m currently taking a course in real estate and am thinking I’ll continue taking the courses in that field, as I’d still ultimately like to open an office when or nearly after getting out of school.

I passed the state/national exam to become a licensed real estate broker, so now it looks like all that is left is applying for the license, which I plan to do possibly tonight (I’d be licensing myself as a sole proprietorship, I suppose).

The exam was pretty straightforward, the national “simulation” portion included role-playing scenarios in which you had to follow the situation and know what to ask and whom to ask.  The state portion was 45 multiple choice problems that were all very straightforward, all in all, after taking the courses, I’d say the exams were easy.

Now on to getting the license, there’s quite a few instructions on how to do this, so when I’m more relaxed (and don’t have a headache), I’ll probably begin filling out the forms.  Currently (and rather by the seat of my pants), I’m considering filling out the forms in such a way that it looks like I’d create a sole proprietorship, which seems like a good way to begin, as I could always be hired by another broker (I assume).

So I’m thinking about working in Macomb, Illinois after obtaining a broker’s license.  I’ve just brought this up to my teacher around 9 PM tonight in an e-mail and it’s not unusual that she hasn’t gotten back to me (she may not get back to me until Monday).  There’s a Century 21 office in Macomb, it’s not affiliated (as far as I know) with the broker-owners of the office where I am taking the courses, but it is a Century 21 office, so I’m hoping I may be able to get in that way, if not, there are naturally other options.  I’d like to gain experience and right now my leaning is towards opening an office of my own someday, not sure where yet, possibly on the further outskirts of Chicago (Joliet, Aurora and Manhattan are examples, somewhere further south/west of where I grew up in Oak Lawn, IL).

The idea of opening my own office excites me, but I know I need more experience before doing so.  The whole idea of helping people with what, for most people, will be the largest single investment of their lives excites me very much.  To understand a bit how I feel about what I think I’ll do in the future: I’m unusually not scared, I honestly believe that I would be able to help people professionally and help them in making the best possible decision, the idea excites me very much (obviously), but I feel as though I should have at least a few year’s experience before attempting such an endeavor and finding a managing broker willing to give me that experience at my age is likely to be a challenge, hopefully one of the largest I have to overcome, as it is currently the largest one I can imagine (yes, there will be establishing, licensing and insuring the business and building a customer base as well as advertising and building connections, but I honestly see those as easier parts [perhaps besides building connections, which may be difficult] in the process than getting my foot in the industry’s door).

On the testing front, I believe I already mentioned I’ll be taking the advanced principles portion next Wednesday and working the simulation either that same day or Thursday.  Finally, after either studying or relaxing, I’ll be taking the exam at the AMP testing facility in Chicago on the 15th of August (which is one day after when I wanted to have the license in hand, so my time frame was a bit tight, but if everything goes smoothly, I should still have license in hand around the same time school starts).  After taking the broker management course/exam (which I take after obtaining a broker’s license), I’ll hold the broker’s license free and clear and will only have to take continuing education courses every even year (2010, 2012, 2014, etc.).

So I think my ideal, high-level path would be to get the license, right around when I start school, find work at an office (I’d do essentially anything, through I would prefer to work as an agent or managing, both of which I’d like to have supervision while doing), begin gaining experience in the field and take/pass the broker management course, in fall 2009.  I’d continue working for the office and gaining experience (hence, I would stay on campus during breaks and the summer) while in school, in about three years I’d graduate from Western Illinois with a dual degree in Finance and Computer Science, at this point, I would have a choice: if I felt I’d gaining enough experience, I may open an office elsewhere or I may continue working for the same office until my confidence was built up to the point of feeling comfortable opening a new office.  After opening an office of my own, I think the possibilities could be endless, and what I believe I’d like to do is manage the office and sell, managing the accounts, operating a business and working with my independent contractors (salespeople and non-managing brokers), and these really are the aspects that excite me and additional aspects I would probably outsource to another firm (depending on what aspects need to be outsourced, legality may be an issue, which would be examined when necessary).

I’d say a ballpark goal for me to be opening my own office would be about five years, in fact, I’m optimistically putting it down on my calendar for January 1, 2015, and I’ll update milestones as necessary, but that date will continue to be my goal unless updated, and hopefully it will only be updated to a more recent date.

I will begin writing a business plan probably as early as this semester and update it as I become more experienced and gain insight into what exactly is necessary to operate a real estate brokerage, my personal belief about business plans is that the should be made early, followed and made to evolve as the business evolves, they should be forward-looking and lay a rough path that will be paved as the business comes to fruition.

That’s all I have for now, but I’d say expect a business plan to be posted here no later than Thanksgiving, even if I can’t find a broker interested in hiring me, but I honestly think I’ll be able to find one.

I finished studying for the broker administration portion today and have asked my teacher if it’d be possible to take the exam tomorrow, she hasn’t gotten back to me, but, considering I e-mailed her at 9 PM, not getting a response is pretty understandable, still would like to take it tomorrow if she gets back to me early enough, though.

The broker administration portion had two major subjects: various equal rights acts (these include protected classes, exceptions and to whom exactly the law applies) and the management of escrow accounts (accounting, record-keeping and when to deposit/withdraw, for example).  Minor subjects covered were the handling of employment and advertising laws (which tied closely with the equal rights acts).

After finishing this portion, I certainly don’t feel confident enough to go out and open my very own real estate brokerage, but I do feel confident in my ability to do so in the future, after gaining some experience in the field.  I may even say I’m confident enough to work as a sponsoring broker under a managing broker, which may be my idea job, at least as I understand the industry so far.

After finishing this portion of the exam, I’ll have one more portion to go (advanced principles) then, after completing that, I’ll take a simulation test, which my teacher tells me will tie everything together, and I assume after taking the simulation I’ll go on to take the “real” state and national exams, after that, I’m kind of unsure about the process, but I believe I’d apply for a license after passing the state and national exams, then I’d be a licensed real estate broker and I really couldn’t tell you where I’d go with it.

Well, wish me luck for tomorrow, I really hope my teacher has time for me to take the exam.

So, if I’m honestly going to attempt to turn real estate sales into a “college job,” how can I go about this?  This is the question I’ve been asking myself constantly, so the following is just a bunch of stuff that has come to my mind:

1. I don’t drive, if I am allowed to be a salesperson, how would I get to showings?
   1. I do plan to get a license before year’s end, and could perhaps borrow a friend’s car
2. What would I do for the office?
   1. For useful experience, I would be willing to do essentially anything, though I’d prefer to manage escrow accounts, be doing the math or be an active salesperson.
3. How often/when would I be working?
   1. Very strictly, I cannot work during hours when I have class (currently, during the day on Mondays, Wednesdays and Fridays and just before lunch Tuesdays and Thursdays)
4. Why would I hire me?
   1. I have a broker’s license and am earning a degree in finance from a local school, I am reliable and, so long as class isn’t interrupted I’m responsive and willing to work around other peoples’ schedules.
5. What do I hope to gain from this experience?
   1. I’m interested in gaining experience, and let that lead me in a direction, if I feel confident in my abilities, I may want to open my own firm somewhere else in Illinois after graduating, or if I’m uncomfortable with the idea of opening my own office, but enjoy the industry, I may stay with the firm that hired me in college.
6. How long would I want to stay in the employ of another broker?
   1. Well, as mentioned above, it all depends on my comfort level after graduation, if I like what I’m doing and am comfortable where I am with no want to proceed further, I’ll stay at my original broker’s office, if I’m feeling ambitious, I may expand out and open my own office, probably closer to Chicago.
7. What’s the bottom line (how much will I get paid)?
   1. This is almost impossible to tell because it would depend on me and my ability to attract buyers and sellers, though (according to the website Payscale), the wages for full-time salespeople (hence, not brokers and probably not owners) is competitive with average salaries in the area (35k in Macomb, IL and ~40k in Chicago, IL)
8. What can I expect, how long will it take (and how much will I spend) before I’m a profitable salesperson?
   1. Again, too tough for me to currently tell, through I have read that it can take 60 to 180 days to become profitable, according to Century 21.
9. If I’m only doing this on a half-time or less basis, can I be consistently profitable (even if the profits are razor thin, I need to make some money: I can’t go bankrupt for all the experience in the world)?
   1. I honestly think I could be, I’d be committed to the job at least 70% of my free time on Tuesdays, Thursdays, Saturdays and Sundays, as well as the afternoons of Mondays, Wednesdays and Fridays, this gives me quite a few hours to work, so as long as buyers and sellers could work just a bit around my schedule, I’d be available and I could do the office work in the afternoons, including the fees I’d have to pay my broker from MLS access and office space, I’m sure I could make enough to be in the black.

After reviewing and thinking about all of that, after I obtain my broker’s license (whether that be before summer’s end or before spring session starts), I’ll talk to my teacher and see if she can’t get me a job down at Century 21 in Macomb, if that’s not a possibility, I’ll talk to my friends to see if any of them know a broker who may be willing to take a chance by hiring me and try that, and if that fails or nobody knows anyone, I’ll talk to the local (non-franchised) office, Key Realtors® and attempt to get hired by them.  Finally, I’d try to get hired by the non-Century 21 franchises (RE/MAX and Coldwell-Banker).  If nothing works out at any of those offices, I guess it’d be safe to assume I wasn’t meant to work in real estate while in college and I may give up until I graduated, or perhaps altogether and I’d just keep my license for its own sake, but I rather doubt nobody would hire me.

I just began studying the financing portion of the exam and am considering making a at least a part-time college job out of being a sales associate.

The financing portion is going like the other two brokers portions went so far: I’m able to quickly hammer through the problems while occasionally (about 1/5 problems) making a mistake.  Unfortunately, these first three portions were the “easy”/non-state portions, and the next two are the “harder” portions that include most of the information that is going to be on the state/national exam, so I’m still not quite sure what to expect.

Ultimately, though, with the results from my studying so far, I’m considering the possibility of making the license into a part-time job while at school and I’m going to talk to my teacher about the possibility of being employed while in school (at the Century 21 office in Macomb) and over the summer (either at the Century 21 office in Oak Lawn or Macomb).  I also plan to talk to the local office in Macomb, Key Realtors (I’d actually prefer to work for a more local office, but, because of where I got my training, I think the chances of being hired by an affiliated office would be better than a local office), especially if the teacher would be unable to secure anything for me at Century 21 (the school I’m taking these classes at is affiliated with Century 21).  I’d like to get some experience in the field with the prospect of picking up some extra cash on the side, through I’d be willing to perform menial tasks for relatively cheap.

I’m thinking if I can begin working now and gain some experience while in school and during some time after school and perhaps go on to open my own office in the future, but that’s too far in the future to speculate with any precision, anyway, I don’t even have a license yet, and first thing’s first!

So I asked my teacher about the possible sequences in which I could take the various exams (national, Illinois and pre-license from the office).  It turns out that I can take the pre-license exams at her office at my leisure (for example, I can take the salesperson, come back a few days later and take the first broker series, come back a few days later and take another broker series, etc.); however, the state and national exams all must be taken in one sitting, for both broker and salesperson.

I suppose this works both to my advantage and disadvantage, the advantage is getting everything over with at once so I finish when I finish, but the disadvantage is that I’m not able to study one topic and test on it while I’m extremely fresh in that topic.  I think in the long run, it will be to my advantage to take everything at once and be able to integrate the great amount of information that’s in the many topics, so I look forward to continuing to study my broker material while staying fresh with my salesperson material, my goal is to have (or be fully ready to receive [have all of the exams taken]) my broker’s license by Friday, August 14, 2009.  There’s quite a bit of material, but I’m currently just an unemployed student, so it’s not such a big deal and I think this is a realistic goal.

As a side note, I began studying in March, but only began reading the book at that point until I was finished with school on 17 May, 2009, at which point I completed reading the book rather quickly and began taken the school’s quizzes, I have just recently finished taking the school’s quizzes and am now prepared for the school’s salesperson final exam, but I’d like to give myself a refresher course before taking their exam.  Perhaps by the end of this week or beginning of next I’ll be ready to take their salesperson exam so I can get that transcript.

After I collect the necessary transcripts from the school (there are six of them, 1 salesperson and 5 broker), I register to take the state/national exam, and upon passing that exam, I apply to receive a license and then take an additional course after receiving the broker’s license.  After completing that final course, I believe I am clear to be a broker so long as I complete 6 hours of continuing education every two years, which is maintainable.  But this last paragraph is just a little bit speculative.

I’m still interested and speculating as to what I can do with my broker’s license while still in college.

My main interest is starting a small business, an LLC with me as the only employee/member at first; however, I’m still unaware of the steps necessary to do such a thing (I would need to establish the business, market and build industry contacts).  I’m also unaware of the personal investment (monetary and time) necessary to do such a thing.  If I’m able to go down this route, I believe my first steps would be joining the local REALTOR® organization (to begin building contacts and access to the MLS) and marketing, both online (I would expect to have a strong online presence) and with door-to-door fliers.

If after researching into the above option yields so great an amount of difficulty such that I’d be unwilling to make the commitment while still taking courses, I would be interested in working for another firm on a part-time basis.  I am willing to do absolutely anything, so long as the following conditions are met: I could state what hours I am unable to work (hours during which I’d be taking courses), I am making a decent wage (at least enough to live in the city where I was practicing while maintaining my obligations [student loans] and status in the real estate industry [any professional designations and continuing education).  The advantage to hiring me as an agent would be my eagerness to learn, especially about starting my own firm, and I would be willing to take reduced pay and increased work if I was given the oppertunity to learn how to start and run a successful firm of my own.

My final option would be to do essentially what I planned to do from the beginning, not use the license for anything except for transactions involving friends and family, where I’d be able to use my education to provide them with advice and possibly save them money.