If this sounds daunting to you, don’t worry. Upon close examination, you will see that the revenue that a real estate agent can make relative to the amount of investment necessary is amazing.

For a moment, let’s compare real estate sales with other businesses like restaurants, clothing stores or most other businesses that you might think of.

Imagine how hard it is to own and operate a restaurant, for example. You have to purchase supplies, hire staff and deal with dozens of customers on a daily basis. Don’t forget rent each and every month. You’re also going to need a phone line and probably Internet access. Additionally, you don’t get to take time off randomly like you would as a Realtor. You don’t get to create your own schedule. You have to be there six to seven days a week from open to close.

Man… THAT’S HARD WORK.

Compare this with real estate sales:

You don’t have to carry any inventory. Our inventory is out there ripe for us to sell! We have zero carrying costs and don’t have to pay for the inventory (listings) that we have.
You don’t have payroll to make until you can afford it. If you owned a restaurant, bar, clothing store, coffee shop or almost any other business, you would have payroll obligations from day one. In real estate sales, you hire an assistant when you can afford to.
You don’t pay for an extra phone line or Internet access, your broker pays for this. Don’t kid yourself about how expensive business class telecommunications can be. Many businesses have a phone and Internet bill of several hundred dollars per month or even more!
You only deal with a small number of select clients unlike the volume game played by most other businesses. Think of something as simple as a coffee shop. How many customers does a coffee shop have to deal with each and every day? Potentially dozens or maybe even hundreds. Every single customer has to leave happy. In our real estate business a successful Realtor might only have to deal with 20-30 clients over the course of an entire year. Yes, this means that each deal comes with more pressure, but you don’t have the constant pressure you would have in a higher volume business.

There are a ton of people who get into our business that come to the sad realization that buyers and sellers aren’t going to beat down the doors of the newly licensed agent. This causes them to second guess the real estate sales business and dismiss it as “too difficult”. They then start to blame the market.. “Hey nobody is buying anyway”… “Haven’t you read the news lately? The market sucks…”

The truth is that as Realtors, we don’t know how good we have it in our business. Even as a new agent, over 50% of the gross revenue generated is ours to keep. Strong, experienced Realtors often get to keep over 80-85% of the gross revenue.

Think of attorneys as a point of comparison. Attorneys typically bill out at $275-$450 per hour. Do you think that and average attorney working at a firm gets to keep that high of a percentage? Even half of it? No way. An associate at a law firm might be making $40-$50 per hour against the $250+ that they are billing.

Yes the market might be down and prices are lower than they were in many parts of the country but real estate sales can be one of the most most rewarding business out there. This is true from an economic perspective as well as the inner feelings of fulfillment that comes from helping clients navigate the complex world of real estate.

Most real estate agents don’t make anywhere near $200,000 per year, but I thought it was interesting that the manager had posted such a plan at the entrance to the office on how to create this much income.

Even if a real estate agent follows this plan to the letter and ends up screwing up fifty percent of it, their income will still be $100,000 a year in a “down” real estate market. It may sound cliché, but this “think big” mindset is useful. So is having leaders that push us to do our absolute best no matter what. Market conditions don’t define our business as much as the plan itself.

I tweeted a pic of the business plan. Here’s the link:

http://twitter.com/#!/AdhiSchools/status/127239284771127296/photo/1

However, ask yourself this question: Is the Internet a suitable substitute for an actual mentor?

Listening to our competitors, you would think so. They try to sell students on the idea that online classes are more effective in teaching than live classes. We completely disagree.
 
The Department of Real Estate requires that a student take 3 classes in order to qualify for a sales person license and 8 for a broker license. Each one of those courses has 45 hours of credit. The California Department of Real Estate requires that for a home study course there be 10 pages per course hour in each textbook used by a real estate school. Each textbook, by statute, must be at least 450 pages. (45 hours x 10 pages = 450 pages) Now, ask yourself this: If you were to receive three (You need Real Estate Principles, Real Estate Practice, and an Elective course, remember?) 450 page books in the mail, would you have the patience and discipline to read each and every page line-by-line, absorb the material, take the exams online, and subsequently pass the state exam? Even if you made it through each book, how much do you think you would really learn from reading 1500 pages worth of course materials on your own? Taking an online course does not compare to the knowledge and guidance we have to offer through our live real estate program.

Why then are so many other real estate schools online only?

The answer to this question is probably a combination of several factors. First of all, from a business perspective live real estate courses are much more costly to run than a strictly online model. High quality instructors must be compensated for teaching and classroom space must be procured. These costs create a strong incentive for education companies to keep overhead to a minimum and do “online” only.
 
All of our instructors are licensed and active real estate agents, and most are brokers. Isn’t this the caliber of educator you would prefer in helping you begin a new career in real estate?

Our program gives you the greatest chance at success. With the proper guidance and enough determination, every student can ultimately achieve their ambitions of becoming a licensed and successful real estate agent.

Call us at 888 768 5285 or visit us online at www.adhischools.com for more information.

Despite the fact that we’ve been faced with rising book costs, increases in salary for our staff, and the cost of operating twelve locations we haven’t raised our tuition since 2003. 

Find out what makes our program different by calling us at 888 768 5285 or visit us online at adhischools.com

Watching this I didn’t quite understand why each was polarizing the position of the other. There isn’t only one way to accomplish something.

I don’t think anybody can ignore the fact that social media is here to stay and that it allows human beings to communicate quicker and more efficiently than ever before. However, in our great business of real estate sales, there must be a balance between the two.

Today’s real estate agent should be aware that their only job is to be out talking to people and to get face-to-face with a potential customer. If this activity is avoided, the chances for success are zero.

Social media sites like Facebook, Twitter and YouTube are just another way to connect with one another. Telephone prospecting and door knocking are the same thing, just packaged differently. A healthy balance between the two will increase your chance of success.

Hurry up and get your Real Estate Principles, Real Estate Practice and Elective classes DONE! So you can apply!

Incase you have questions about the main form, the RE 435, watch this YouTube video.

Good luck and be patient!

I had the pleasure of reading a page that was created on the review site yelp.com and was pleasantly surprised to find the below comments.

My hope is that we will continue to provide great service in a dynamic educational environment for as long as possible.

Enjoy the comments below:

Great school, great info, and a great teacher, Kartik is the man. good value for a great live instructional class. Many convenient locations around SoCal. Totally fun and exciting way to begin your career in Real Estate. You will not be dissapointed.

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I was really lucky to find out about ADHI Schools. I had always considered RE but just kept putting it off. I sat in on a class and I was sold. Kartik’s teaching techniques are the best and he makes even some of the driest material interesting. I was really nervous about taking the state exam as it has been quite a few years since I have taken any tests but I could hear his calm voice going over the material as i sat there and yeah, I passed first time.

Not only was I prepared for the state exam but his insights to the RE market and getting your career started are invaluable. I looked forward to going to class each week and left energized about RE.

Thank you Kartik and ADHI Schools!

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I ended up in a RE class because my dad somehow got this idea of how I should be in RE. He wanted me to be productive by going to class rather than staying at home, watching tv. I remember my dad telling me how the class is going to be fun and the teacher is really good.

And of course, my dad was right. First day of class was awesome! I actually wanted to sign up for classes. Kartik’s teaching was totally different from other teachers. Usually, teachers are mumbling who knows what. Kartik’s teaching is interactive and fun! I learned a lot and listened for the entire lecture. The best part about Kartik’s teaching would be his use of stories and mnemonics. Because of stories and mnemonics, the RE materials stick in my memory a lot easier and longer. Crash course was definitely helpful for the state exam even though it was 9 hours long. But it was worthwhile. Every piece of knowledge that I accumulated from each class helped me toward passing the state exam.

Overall, my experience with the school has been amazing! I came into class with zero knowledge of RE, but I always leave class learning something new. Now that I got my license, I can’t wait to start working!

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I am so glad I joined ADHI. I am currently going thru the process of buying my first home and taking the RE classes side by side has really helped. All the teachers are really good and I leave each class with a lot of information and knowledge of the RE market.

I am really glad I decided to learn about RE and I made the right choice by joining ADHI!

Dear C.A.R. Member:

We’re starting off the new month with some great news from Washington, DC today that we wanted you to hear from us first.

Late yesterday, President Obama signed a resolution that included a provision extending through fiscal year 2011 the current conforming loan limit of $729,750 for high-cost areas, including many in California. The same limits will also be extended to loans insured by the Federal Housing Administration.

We’re extremely pleased that the Obama administration recognizes the need for such an action so that the housing market can recover. Without the extension, which was set to expire at year’s end, FHA loan limits would have dropped by as much as 50 percent in some areas, and the conforming loan limit would have dropped by about 40 percent.

C.A.R and the NATIONAL ASSOCIATION OF REALTORS® (NAR) have long advocated making permanent higher conforming loan limits. As a result of C.A.R.’s and NAR’s efforts, a provision of the Housing and Economic Recovery Act of 2008 included temporarily raising the conforming loan limits from $417,000 to $729,750 in high-cost areas and extending the limits through 2009. Yesterday’s actions effectively extend the higher conforming loan limits for Fannie, Freddie, and FHA loans through Sept. 30, 2011.

We applaud our congressional representatives for their actions to extend the higher loan limits through 2011. Without the extension of the higher loan limits, many California borrowers would have a harder time refinancing homes and obtaining financing for new home purchases. We hope Congress will now focus on making higher loan limits permanent.

The conforming loan limit determines the maximum size of a mortgage that government sponsored enterprises (GSEs) Fannie Mae and Freddie Mac can buy or “guarantee.” Non-conforming or “jumbo loans” typically carry higher mortgage interest rates than conforming loans, increasing monthly payments and hampering the ability of families in California to purchase homes by making them less affordable.

Sincerely,

Steve Goddard
2010 President
CALIFORNIA ASSOCIATION OF REALTORS®

How does this statistic affect a new agent?

My recommendation has always been to affix your license to a market leader. In most cases, the market leader is going to be a large organization with fifty or more agents. Most of these larger firms have a systematic training program and scale built up.

This is especially important for a new licensee with very little to no real estate experience. When sitting across the negotiating table with a seller, it’s comforting to be able to lean on what your firm has done to help fill in some of the holes in your own experience.

Besides being able to lean on the accomplishments of your office, it’s also helpful to be in a large office if you can develop synergies within the organization. If you want to to pick up buyer leads by holding a property open, for example, it’s easier to do that when you have 100 agents to approach and hundreds of listing to choose from. Also, being in a large office allows you to learn from the mistakes and failures of colleagues that have been in your shoes before.

Check out this video of veteran Realtor, David Hurtado, talking about how he chose an office to work with when he was a new agent. Also, this video might help you decide on what office to work for.

SB 1178 to be Voted on Again This Week

Stay Tuned for Another Red Alert!

C.A.R. is sponsoring SB 1178 (Corbett) to extend anti-deficiency protections to homeowners who have refinanced “purchase money” loans and are now facing foreclosure. Most homeowners didn’t even know that when they refinanced they lost their legal protections, and now may be personally liable for the difference between the value of the foreclosed property and the amount owed to the lender.

SB 1178 was voted on last Friday in the Senate. The bill was just two votes short of passage. The bill was then granted “reconsideration” which means it can have a vote again before the end of this week.

The bottom line is this: the fight is not over! SB 1178 will be voted on again this week. Please stay tuned for another Red Alert. It is very possible that C.A.R. will issue one before Friday.

C.A.R. is working on amending SB 1178 to address concerns raised by legislators while preserving the “no recourse” protection for borrowers who refinanced their “purchase money” mortgages.

Here is how senators voted this past Friday.

“Yes” votes: Alquist, Cedillo, Corbett (author), Correa, DeSaulnier, Florez, Hancock, Leno, Liu, Lownenthal, Negrete McLeod, Padilla, Pavley, Price, Romero, Simitian, Steinberg, Wolk and Yee.

“No” votes: Ashburn, Calderon, Hollingsworth, Strickland and Wright.

Not voting: Aanestad, Cogdill, Cox, Denham, Dutton, Harman, Huff, Kehoe, Runner, Walters and Wyland.

Absent (not in Sacramento that day due to health reasons): Oropeza and Wiggins.

Thank you to everyone who made a call to their senator. Facing lender opposition, many of those who ultimately voted for the bill, may not have done so if they hadn’t received so many calls from REALTORS(R).

For More Information

Contact DeAnn Kerr at deannk@car.org.