Are you thinking about starting a career in real estate? If so, you may have an idea of what the day in the life of a real estate professional looks like. If this idea is based on a real estate reality TV show, you may be in for a surprise. Let’s begin with a couple of basic propositions.
The primary function of a real estate agent is to represent sellers on a commission basis to market their residential or commercial properties. In addition to this, real estate agents are hired by buyers of residential or commercial properties to provide assistance in the acquisition and purchase of these properties. As simple as this sounds, it’s only a small portion of a real estate agent’s duties and responsibilities. Read on to learn about what real estate agents actually do on a daily basis to earn income.
Generally, agents are hired by clients to provide real estate advice, advocacy, and negotiation-level services. The word advice speaks for itself. Advocacy refers to the way in which the agent represents, meaning actively supports, the needs and desires of the client. Negotiation is closely aligned with advocacy. Negotiation is one of the most important services that an agent provides for his or her client.
Agents are also authorized under real estate license law to provide property management services. In this context, an agent is hired by the owner of an income-producing property such as an office building, strip center, or multi-unit residential complex. Property managers are actively involved in attracting new tenants, building maintenance, and landlord-tenant relations.
In Michigan, a real estate agent can be hired by and represent a buyer as a buyer’s agent or a seller as a seller’s agent. Sometimes, an agent will represent both buyer and seller in the same transaction as a dual agent. While not common, a buyer or seller may not want a licensee to formally represent them but does need some assistance with the administrative side of a transaction. In this case, the licensee works as a transaction coordinator rather than an agent.
These terms are closely related, but they are not synonymous. A real estate licensee is a person who has completed the required 40-hour course (like the one provided by NCI) and passed the state exam. A licensee can perform all of the real estate activities authorized under license law. The agent refers to a licensee who formally represents a seller or buyer pursuant to an agency contract. Finally, the term REALTOR® is a trademark of the National Association of REALTORS® (NAR).
After obtaining his or her real estate license, the licensee joins NAR through the appropriate local and state association of REALTORS®. NAR members are contractually required to abide by NAR’s strict Code of Ethics. By comparison, Michigan license law and rules only require licensees to adhere to what’s known as “minimal standards of acceptable practice.” Being a REALTOR® is a seller’s or buyer’s assurance that the licensee operates from the world’s highest standards of professionalism. This matters to the public!
As mentioned earlier, real estate reality TV shows typically do not accurately portray what a real estate agent does on a daily basis. As with any other serious job or profession, real estate agents engage in fun and exciting activities. They also must deal with more mundane, but still necessary, tasks.
Legally speaking, an agent is one who represents the interests of another under an agency agreement. The agent owes certain fiduciary duties to the client. The word fiduciary means of or relating to trust. A sampling of these duties include:
In addition to specific legal duties, an agent provides specific services to a client. A sampling of these services includes:
When examining what an agent does during a normal workday, one activity towers over all others when it comes to generating commission income: Prospecting and Lead Generation. Licensed salespersons are typically hired by their employing brokers as independent contractors. This means that each licensee generates his or her own income. Most employing brokers provide tremendous support through access to office space and amenities as well as targeted sales training.
The agents who make the most money are the ones who do the most consistent prospecting. Prospecting is the process of contacting individuals to let them know you are a licensed real estate professional and, possibly, to provide valuable real estate information. Prospecting is common in all sales-based industries.
Here is an excerpt from another post on the NCI Blog: For the new agent who is just starting out, he or she is able to kick-start their business by building lead sources from people they already know such as family, friends, and social media contacts (sometimes referred to as a Sphere of Influence). Other sources of leads can be generated from past customers and clients they worked with at previous jobs. Geographic farming is another great source for new agents. It involves focused marketing in a local neighborhood, often the one in which the agent lives. This list of potential sources of business should be good news to new agents who are often surprised at how many people they already know.
Networking is another aspect of prospecting and lead generation. Networking is the process of exchanging ideas, information, and services with other professionals. Networking sources include civic, business, community, and neighborhood groups. And, connecting with related real estate service providers such as title companies and mortgage companies.
Becoming involved in the agent’s local REALTOR® association is another great opportunity to connect with other like-minded, active agents. Veteran agents who have dedicated themselves to principles of honesty, ethics, and high integrity have a ton of knowledge and practical experience they can share with new agents. Many real estate agents find attending networking events or joining a networking group beneficial to their business.
When an agent lists a seller’s property to sell, the agent is responsible for marketing the property in a way that maximizes its exposure to potential buyers. Marketing can include a range of activities such as having a professional photographer take photos and videos of the property, creating flyers, writing a captivating listing description, staging, digital marketing, and print advertising. The primary and most effective outlet for marketing properties is the Multiple Listing Service which is available as a REALTOR®–exclusive service.
Listings are the best source of steady income because every agent in the MLS has the opportunity to connect their buyers to the listing. This does not mean that agents should ignore buyer-client relationships. Recall that a real estate transaction requires both a seller and a buyer. Agents should prospect for both seller leads and buyer leads. When working with buyers, agents help them in many ways including showing properties; educating them about the purchase process; helping secure financing; assisting with the contract and negotiations; and facilitating inspections and, ultimately, the closing.
As with any professional endeavor, real estate includes a certain amount of paperwork. The paperwork includes contracts, forms, and addenda. Here is a list of some of the contracts and forms involved in a real estate transaction: (1) agency agreements and disclosure forms such as listings and buyer agency contracts; (2) purchase agreements and associated addenda; (3) leases and related forms; (4) inspection forms; and, (5) mortgages and notes.
Brokers and managers assist their affiliated licensees with the use of all company contracts and forms. They are also responsible for double-checking that everything in the transaction file is correct and up-to-date. Nevertheless, it is up to the agent to stay on top of deadlines and make sure all paperwork has been properly filled out in a timely manner. Administrative tasks may not not be as exciting as attending a closing, but they are a necessary and important part of the job.
Any individual who is charged with running and managing a business must monitor how that business is operating and performing. The same is true for each real estate agent. To build and maintain a successful real estate practice, each agent must pay close attention to how he or she is performing. This includes daily accountability for how much time he or she prospects each day.
Lead sources must be tracked for purposes of follow-up and setting appointments. The agent must also closely monitor expenses, schedule appointments, stay current on the market, and educate themselves. Many agents forget to do this on a regular basis. Unfortunately, they may not recognize this oversight until they suddenly have more bills than available commission income with which to pay them.
The answer to this question can vary significantly from one agent to the next. The best way to examine it is from the perspective of an agent who approaches his or her real estate practice as would any other successful business. The ideal day of a top producing agent includes:
Successful agents know that following an idea day–each and every day–is the key to success as a real estate agent. New agents should not be intimidated by this prospect because brokers who hire new agents understand the importance of sales training and productivity coaching.
Serving as a real estate salesperson is not your traditional 9:00 a.m. to 5:00 p.m. job. Not only will you be working during weekdays, but you must also be prepared to make listing presentations to prospective sellers, meet with prospective buyers, show homes to buyer-clients, and hold open houses during evenings and on weekends. While this may sound a bit overwhelming at first, keep in mind that you have near total control over your office hours. In other words, if you have a listing appointment in the evening, you can go into the office a little later the next morning.
Is real estate for everyone? The answer depends on each individual. Real estate sales is a commission-based profession. In other words, there is no guarantee of a bi-weekly paycheck. There is no supervisor who will reprimand you if you don’t come into the office on time or produce at a certain level.
When asked why they desire a career in real estate, people state reasons such as career flexibility, having control over their workload, a dynamic schedule, and high earning potential as some of the reasons. For the motivated person who is willing to commit to doing what it takes to be successful, real estate is an excellent career option. Further, agents benefit from the fact that there is a near limitless income-earning potential.
If you think that real estate is a good fit for you, check out Michigan’s best real estate education school, NCI Associates, Ltd. NCI provides online self-paced, in-person, and Zoom webinar format real estate classes to fit your schedule and needs. For more information about NCI’s classes and how to get started with the process of getting your Michigan real estate license, visit TeamNCI.com today.
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However, fulfilling the promise of a successful real estate future requires the right choices at the right times. The most important decision to make right now? Where you’ll begin — or continue — your real estate training. NCI Associates, Ltd. remains your intelligent choice for Michigan Real Estate Classes.Register Today