The information in this website is not designed to sell you on the idea of becoming a Realtor. It is straight forward truth about the process and what you can expect if you were to take the big step. Hopefully this will provide you with the information you need to make an informed decision.
Frequently Asked Questions:
What is the process to become a Realtor?
- Your first step is to gather enough information in order for you to make an informed decision. This is more difficult that it seems. Even thought most people know a Realtor it is still difficult to get an accurate picture what is like to be a Realtor. The reason for this is twofold. The first reason is that being successful in Real Estate sales is usually a result of 2 things; the right personality and the right training. If you talk to a Realtor who did not have both of these things you will get a negative perspective on the Real Estate business. Most companies do not have adequate training. This does not mean they are bad companies it simply means that extensive training is not part of their business model. Second, the Realtor is talking to their future competition and most Realtors do not want any more competition so they discourage you from coming into the business.
- Once you decide to become a realtor, your next step is to register for the licensing course. This will cost you $875.00. You can put it on your credit card or you can write us a cheque and we will send it in for you. You can register yourself online or you can do it through us. The website is http://www.sauder.ubc.ca/Programs/Real_Estate_Division. We recommend doing it through us for a couple of reasons. First, we have a stock of textbooks that you can borrow until your books come in. Usually once a person registers they are excited and want to start right away. Second, the licensing course tends to be arduous if you do it on your own. We take a difficult correspondence course and turn it into a very practical and easy to understand classroom course. We have the textbook summarized into point form and we focus on the questions that will be on your exam. Registering with us also allows you to participate in office functions. This will begin to teach you about the business that you are about to enter. You are welcome to come to sales meetings and open house tours. This starts your relationships with your future colleagues as well as educating you to the local market.
- Your next step is to complete the Real Estate course. There are 26 different chapters. There is Real Estate Law, Real Estate history, taxation, 5 chapters on the Hewlett Packard 10BII calculator, technology, statements of adjustments, ethics, the Real Estate Services Act and so on. Average time to complete the course is 3 to 4 months. It is a lot of dry reading but relatively simple concepts.
- When you are ready, you write an exam. It is 100 multiple choice questions that must be completed within 3 hours. This can be done 2 ways. Approximately every 3 months the exam is set in Kelowna for the Okanagan students. You have to register for this exam about a month in advance. The cost of writing the exam in Kelowna is included in your course fee. The second way is to write the exam is in the exam center at UBC. The cost is $135. However, we recommend paying it. First you usually can register and write with about a week's notice. Second, you get your marks within 24 hours. When you write your exam in Kelowna you can wait up to 6 weeks for your marks. If you fail the exam you cannot write it again for 3 months. This is another advantage of taking the exam at UBC…if you don't know whether you passed for 6 weeks, then you don't know whether you should keep studying for a re-write.
- If you passed your exam you now have to start the licensing process. First, you have to pay for your license and E&O (Errors and Omissions) insurance. Your license is $500 and your E&O is $600 this lasts for 2 years. There is also another $100 fee for the compensation fund.
- Next you have to be a member of OMREB (Okanagan Mainline Real Estate Board) and CREA (Canadian Real estate Association) and BCREA (British Columbia Real Estate Association). These organizations all have start up fees. The total of these is approximately $1300 with monthly dues thereafter.
- Now you have to register for your second course. This is called the Applied Real Estate Course. This course must be done within the first 6 months of your career. Just so you are clear, you are already licensed and selling Real Estate when you take this course. Because of all the training that we provide at Century 21 Executives, usually our realtors say that this course is reinforces all that we have already taught them. This course is put on by OMREB. It teaches you the specifics of selling Real Estate in the Okanagan Valley or the Shuswap. It teaches you about the specific forms we use and the code of ethics that we follow.
- The steps outlined above are the process to becoming licensed to sell real Estate in the Okanagan Valley or Shuswap.
How do Realtors get paid?
Realtors in our office as with most other offices, work on 100% commission. The commissions are set by the brokerages. Our office policy is 7% on the first $100,000 plus 3.5% on the balance. For instance, the average home in the Okanagan area is around $400,000. If a Realtor sells a home for $400,000, under the commission structure of our office, they would receive $7,000 on the first $100,000 plus $10,500 on the remaining $300,000 (3.5% of $300,000)… for a total commission of $17,500 + HST.
How are the commissions distributed?
In 85% of the cases where a Realtor sells a home or property, there are 2 Realtors involved, one representing the buyer, the other representing the seller. Usually the total commission is split 50/50. In other words, in the example above, Century 21 may have the listing and one of our friends at Remax comes over and sells our listing for us. In that case, the $17,500 would be split in half with $8,750 going to Remax and $8,750 going to Century 21. However, in approximately 15% of the sales the Realtor does what we call a double-ender. This means that the realtor represents both the buyer and the seller on the same transaction. This means that the entire $17,500 comes to their company.
Can I have another job while I take the course?
Yes...but we don't recommend it. We have been bringing Realtors into the business for 20 years. we have learned that people who can afford to simply treat the course as a job do better and have a better chance of becoming licensed. If they can cram the knowledge into their heads and pass the exam as fast as they can it seems to work better. People who have a job and work for 8 hours a day and then come home and try to study have a much lower success rate in completing the course. However, if having a job while you do the course is your only option then the only thing that will stop you from becoming licensed is your level of commitment. It is harder to do this course when you are working but lots of Realtors had to do it and were successful at it.
Can I have another job when I am a Realtor?
Legally yes, and we highly discourage it. In your first year you are setting up your business. It is a lot of work. It takes long hours and a strong focus. If your focused is split it will lessen your chances of success.
What other costs do I have?
The biggest cost is your living expenses. It can take anywhere from 2 to 6 months before you get a pay cheque. How soon you get paid depends on how well you follow our program, how determined you are and perhaps, a little bit is based on luck. You may run into someone in your first week that wants to buy or sell a house or it may take you 3 months to find your first buyer or seller.
What kind of income can I expect?
This is the hardest question to answer. You can expect anything from working hard for a year, never selling anything and getting out of the business (This is the worst I have ever seen) to making $250,000 in your first year and $625,000 in you second year and over a million in your third year (this is the best i have ever seen). In other words people's financial results are all over the map. What I can tell you is the difference between the worst and the best is that one person followed our program perfectly and the other didn't follow it at all.
Real estate is incredibly simple, but it's not easy. In other words if you tell our trainers you want to make $100,000 in your first year or more they can tell you exactly what to do and will set up a plan for you that will guarantee you earn that amount of income. However, it is up to you to follow the plan.
The 2 things that draw people into this business are also the 2 things that push people out of the business; freedom and money. People usually get into this business because they want more freedom and money. If their child has a hockey game or music recital, they want the freedom to go and watch it and Real Estate gives you that freedom. Unfortunately, what can happen is people take all the freedom and don't do work to earn the money.
Century 21 has the best training in the business. That is indisputable. Our company has been set up that way from the start. I was a freelance trainer in Western Canada before I got into the brokerage business. However, if the Realtor does not show up for the training and support and coaching there is no consequences. It's your business. This is the major problem with our business. There is no accountability. This is why statistically if you sign up for the course there is about 60% you will never be successful. If you finish the course and pass the exam there is about a 40% chance that you will fail. If you have completed your first year there is still a 20% chance that you will not be in the business in 5 years. Real Estate is a business for people who want more. People who want more for their families, their spouses and for themselves. People who want more money, trips experiences, material possessions for them and those that they love. However, it is a business with a cost. That cost is supplying your own drive and determination. Many people in society cannot supply that themselves. If you can look back in your past and honestly say that you have never just done your job. You have always exceeded the expectations people had of you then Real Estate may be for you.
What personalities tend to make good realtors?
When I am recruiting Realtors I look for 3 qualities.
1. An outgoing personality - You cannot do well in the Real Estate business and be afraid of people. You will have countless opportunities to ask a question. You may be working late one afternoon and come out of the office and a couple are looking at the display boards in front of our office. You have a decision to make. Either you can nod your head at the couple and walk on or you stop and ask, "You folks from out of town? Anything I can help you with?". You may be in the grocery store some day and the lady at the till sees your Century 21 name badge and ask, "I noticed you are in Real estate?" Again you have a decision to make . You can nod your head and say yes, or you can say, " Yes and I wouldn't be much of a Realtor if I didn't ask...do you know anyone who is interested in buying or sell a house right now?" You would be amazed at how many people will give you an affirmative answer to that question. You have to be able to do that even if you are afraid. You have to be good at stepping out of your comfort zone. I simply call this an outgoing personality.
2. An entrepreneurial mindset - Waitresses, bar tenders, piece work construction workers, previous salespeople or business owners all seem to make good realtors. The reason is that they are pre-programmed to believe that the value that they bring to the table for their job depends on what they do not the hours they put in.. Most jobs program people to believe that there value comes from the hours that they work because that is how they get paid, by the hour. In Real estate if you can get 4 hours worth of work done in 2 hours, you are being efficient. Good Realtors are always sharpening their saw. They are consistently looking for new and better ways to find and service more clients. They are constantly coming up with new ideas rather than putting in time.
3. A sense of competition - The first 2 personality traits will give me a good Realtor but it's a sense of competition that creates a top producer. The top Realtors, the ones making 6 and 7 figures, are incredibly competitive. They compete with themselves, with other Realtors in their office, their town and their country. They are constantly improving their systems and their ways to meet and service more people better than their competitors do.
How are the companies different?
This is a difficult question to answer since our competitors will be reading this. However, the public looks at the Real Estate companies as very similar. Each one is viewed as a company that sells Real estate for and to the public. However, nothing could be further from the truth. The buyers and sellers are not really the customers of the companies. They are the customers of the Realtors. Legally the opposite is true but the relationships with the buyers and sellers are built by the Realtors so essentially the buyers and sellers are the Realtor's customers. The customers of the real estate companies are the Realtors. Each company sells a different product to the Realtors that usually is a result of a balance between services offered and cost to the Realtor. There are companies that cost very little to work for which in turn offer very few services to the Realtors. These companies are usually the ones that have the lowest producing Realtors as well. There are also companies that offer a bundle of comprehensive services and of course they have to charge higher fees as well for these services. These are usually the companies that have the highest producing Realtors. Your best bet is to interview the brokers and find out what you get for the money that you are going to pay them. Ask for their value package. There are 2 reasons you should join a company. The first is the managing broker. This is the person that is going to have a huge deal to do with the success of your business. If you do not feel comfortable with him or her and the way they present themselves or their experience in the business, look elsewhere. In my opinion you should look for a broker with at least 10 years experience in the Real Estate business. He or she is going to answering very serious questions for you and your livelihood depends on those answers. The second is the value that you get for the money that you are paying them. In today's Real estate Market a good brand is important but not enough. What services are they going to do for you to help you sell Real estate.
When is the best time to get into the real Estate business?
This question is a 2 part question. First, what is the best month to start and second is this year a good time in the cycle to start. The best month start is January. Here is the logic behind this. It will take you a month or 2 just to get your systems set up and get your feet on the ground. That will take you to the first of March; ready for the beginning of the spring market. March to August is the most active time of any year. Secondly, when the question is asking what year you should start or what time in the cycle you should start there is reasoning behind this as well.
The reason we are actively recruiting new Realtors as of this year, which is the beginning of 2011 is that it is the perfect time to start a Real Estate career. We are right at the beginning of a new cycle. We went into recession at the beginning of 2008. The government changed the lending constraints in April of 2010. That combined with the implementation of the HST pushed a fragile recovery in the last 2 quarters of 2009 back into recession for 6 to 8 months. However, the market travels in 6 to 9 year cycles. We have a graph going back to 1890 that illustrates this fact conclusively. We are just before the next rise in the real estate market. We try to never bring a new Realtor into a boom market. The reason for this is that they develop very poor habits and when the market corrects they keep wondering when the market is going to get back to normal. However, the boom market that they started in was not normal. We have found that when we bring a realtor into a tough market that is going to recover for the next few years they develop better habits and utilize the systems that we put into place for them and create a solid business so they are prepared for the next correction in the future. It is a humorous testament of human nature to observe the public's comments as the market rolls through it's cycles. When we are in rising markets most people in the public with give all kinds of reasons like the strength of the dollar, interest rates, neighbouring economies, local governments etc. why it will not stop this time. Then when we are in a market that is tanking people use the same or similar reasons why it will not stop falling. The truth is that historically for over 100 years the market travels in relatively predictable cycles of 6 to 9 years. We know right now that we are at the beginning of one of those upswings. This is the best time to enter the real estate business and build your business.