Real Estate Sales Agent and Broker

views updated

Real Estate Sales Agent and Broker

Education and Training High school plus sixty to ninety hours of training and license

Salary Median—$35,670 to $58,720 per year

Employment Outlook Good

Definition and Nature of the Work

Real estate brokers own real estate firms and employ real estate sales agents to help sell or rent property for the owners. Brokers charge fees, and sales agents earn commissions on the sale or rental of property. Brokers may also manage, appraise, or develop real estate or even combine their real estate business with an insurance agency or law practice. Members of the National Board of Realtors may call themselves realtors.

Most sales agents and brokers sell private homes. Some specialize in commercial property such as apartment buildings, offices, or factories. Relocation specialists offer packages of home buying and selling services for people moving from one geographic area to another. They may work with individuals or for companies transferring a number of employees.

Real estate sales agents and brokers work from a file of properties that are listed for sale or rent. They use computers and the Internet to locate or list available properties and to identify available sources of financing.

Real estate sales agents and brokers obtain new listings for their agency by locating property owners interested in selling through the brokerage. Much of their business is generated through word of mouth. When they must find new clients, some realtors call homeowners who are trying to sell their homes privately through newspaper ads. They may also contact all the homeowners in a certain area and ask them if they wish to sell. Many real estate agents and brokers send postcards listing their recent sales to other homeowners in the neighborhood. Agents and brokers often visit newly listed properties so that they can familiarize themselves with the features of each property.

In any sale the agents have to negotiate with both the seller and the buyer. Sellers usually begin by asking more for their property than buyers are willing to pay. Agents must be able to convince sellers to set a realistic price. However, most of the agents' efforts focus on the buyer. Agents try to learn what will motivate the buyer to make a purchase, and they must be able to convince buyers that the property in question suits their needs, their desires, and their budget.

Buyers generally offer somewhat less for a property than the seller asks unless the real estate market is hot. If the market is hot, then buyers may compete with one another and drive the price of a property above the asking price. In both cases agents help negotiate the final price. Agents and brokers help buyers arrange to finance the home and perform title searches. Agents arrange for the inspection of the home to ensure nothing is wrong with the property, and they are generally present at closings when final contracts of sale are signed.

Those real estate sales agents who sell homes must be prepared to answer questions about the tax rates in the area, the quality and location of the schools, and the availability of public transportation and shopping. Agents who handle commercial property must be familiar with business trends, the labor market, taxes, freight transportation, and marketing facilities.

Education and Training Requirements

To get a job as a real estate sales agent, a candidate must obtain a license from the state by passing a written test. The test covers real estate transactions and laws regarding the sale of property. Brokers generally must pass a more comprehensive test and may also be required to have several years' experience selling real estate. Most states require that licensed real estate workers have between sixty and ninety hours of formal training. Courses in real estate are available at two- and four-year colleges. In addition, professional associations sponsor courses to prepare prospective agents and brokers for the state test.

Some employers hire high school graduates to work as office assistants while they prepare for the state test. Other employers prefer applicants who are already licensed and who have a bachelor's degree or some college training in business or real estate. Personality traits such as maturity and enthusiasm are also important.

Getting the Job

Interested individuals should apply directly to the real estate brokers for whom they would like to work. Newspaper want ads and career sites on the Internet often list job openings in the real estate field.

Advancement Possibilities and Employment Outlook

Quite often experienced sales agents obtain a broker's license and go into business for themselves. Successful sales workers generally stay in sales of one kind or another because the financial rewards are very good. Some, however, become appraisers or go into property management.

According to the U.S. Bureau of Labor Statistics, 460,000 people were employed as real estate sales agents and brokers in 2004. Employment in this field was expected to increase as fast as the average for all occupations between 2004 and 2014. The use of computer databases, fax machines, and the Internet may eliminate some of the demand for agents in the future, as these technological advances enable fewer agents and brokers to serve greater numbers of clients. The Internet also allows buyers and sellers to find one another without the help of the realtor. As the house-buying population grows, however, the demand for real estate sales agents and brokers will grow with it. Jobs are usually plentiful in this competitive field because there is a high turnover rate. Many beginners transfer to other fields because they fail to find profitable listings or are unable to make enough sales to generate a decent income.

Working Conditions

Real estate sales agents and brokers meet clients, arrange closings, and handle other paperwork in the office. They spend a great deal of time on the telephone locating property up for sale and negotiating with clients and property owners. They also spend time in the field checking out new properties and showing real estate to prospective buyers. Most agents work nights and weekends to arrange meetings that are convenient to buyers and sellers. Their work time is flexible, however, and they can set their own hours.

Real estate sales agents and brokers should enjoy interacting with different kinds of people. Many agents are fairly independent in their work and find satisfaction in locating the right property for the right buyer.

Earnings and Benefits

When a piece of property is sold, the seller pays a percentage of the selling price to the broker. The sales agent receives a percentage of that fee, often about 50 percent, as a commission. However, the rate of commission varies, depending on the policy of the firm, the total selling price, and the type of property. Because sales agents are paid on a commission basis, their earnings vary greatly. The Bureau of Labor Statistics reported that the median annual income for real estate agents in 2004 was $35,670. The top-paid 10 percent earned in excess of $92,770 per year. Brokers earned a median income of $58,720 per year in 2004, and the top-paid 25 percent of brokers made more than $99,820. Some brokers provide sales workers with benefits such as life and health insurance.