A career in real estate : Is it for you?
A career in real estate demands diligence, flexibility, and hard work on your part, but it also offers great rewards and growth potential. Most real estate practitioners will tell you there's nothing quite like the emotional and financial satisfaction that comes from the successful negotiation of a transaction. Even after years of experience as an active practitioner, you are always free to explore related real estate fields to keep your viewpoint fresh and your motivation high.
Contact the licensing education department of the Real Estate Association in your province for the specific requirements for obtaining a licence to trade in real estate. All provinces require that candidates complete an approved program of study, pass qualifying examinations, and be offered employment by a licensed broker. After you obtain your licence, you will be required to constantly upgrade your knowledge through continuing education and professional development.
Areas of specialty
- Residential resales are generally the first transactions that come to mind when people think about real estate. This area, perhaps the most "people-oriented" and popular area, involves the sale of existing homes. Residential resales demand a number of technical skills and specialized knowledge in addition to the ability to communicate effectively. The majority of people entering the profession start out in residential sales, but it is just one of many areas in which you can specialize.
- New home sales are somewhat similar to residential resales. The big difference, however, is that you're selling an exclusive product only for the builder or contractor you represent. Thus, it's absolutely essential for you to know your product inside-out.
- Condominium sales form a different area of residential real estate, where you sell not only a property but also a lifestyle. Many purchasers don't fully understand the exact meaning of "condominium lifestyle."
- Rural and recreational property sales may sound pastoral, but this type of real estate activity is far from being a leisurely pastime. It's very demanding, and requires long days, a great deal of travel, and highly specialized knowledge of such things as septic systems, wells and waterfront regulations.
- Commercial sales and leasing (includes industrial, commercial and investment) are very different from residential sales. This is one of the most exciting areas of real estate but it's not for the faint of heart. Many commercial transactions involve millions of dollars and it can take anywhere from six months to two years to close a deal.
There are also other areas in real estate that don't involve sales or leasing. These are known as the "quiet" facets of real estate and each specialized area requires particular skills:
- Property management, for example, involves assisting property owners in making sure their investment is properly maintained and leased. It's a highly complex occupation requiring plenty of administrative and executive skills.
- Appraisal is one of the most complex areas of specialization because of the many physical, political, economic, and social factors that affect a property's value. Appraisal techniques rely on fairly sophisticated mathematical formulae, therefore this particular field demands that you have a good grasp of math.
- Financing is another very important part of the real estate profession. People in the business of arranging financing for buyers are called mortgage brokers. This highly technical area of specialization requires good, solid math skills.
Regardless of the area of real estate you choose to pursue, each requires the same basics: a proficiency in mathematics, good communication and interpersonal skills, and technical knowledge.
You’re a good candidate for this field if you are:
- A good communicator
- To provide the best possible service to sellers and buyers, it's essential to be a good listener and communicator.
- You must be able to take the good with the bad, handle rejection, and maintain a mature and objective attitude. It's inevitable that you'll have to deal with some disappointment; as in all other endeavors, things won't always go smoothly.
- To be successful, you have to be devoted to your profession, and willing to make necessary sacrifices. Listings are unlikely to simply drop in your lap. It will be your job to go out and find them and build up a solid client base. Achieving these goals requires hard work and a high level of self-motivation.
- As in any career, you have to be willing to accept change and respond to challenges. You will have to be flexible enough to work with all types of people and adapt to the changing minds of your buyers and sellers. Calls at all hours can disrupt your personal life.
- The qualities of patience and professionalism are necessary in every aspect of the business. Everything you do in your real estate career reflects not only on you but on your brokerage and on the profession as a whole. You will be relied upon for your trustworthiness and good business ethics.
- It's essential to remain helpful and understanding at all times, regardless of how you actually feel. Providing good service is particularly crucial due to the importance of referrals in the real estate industry.
Real estate professionals wear many hats; they have to be part lawyer, part financier, part manager and part public relations expert. Here are a few specific skills that will help you in a real estate career:
- You need to have a good, basic grounding in the fundamentals of math, with proficiency in multiplication, division, fractions and factors. You'll use these skills in measuring area and land, as well as appraising property and arranging mortgage financing.
- You should have (or be willing to develop) research capabilities, because you'll frequently have to play "sleuth" as you search for legal documents. Of course, you'll also need a thorough understanding of those documents once you locate them!
- Organization and planning
- These skills are particularly important when you're handling more than one property at a time and have to juggle an active, and often conflicting, schedule that includes showing properties, taking listings, and handling offers and negotiations.
- Handling problems and coming up with quick, plausible solutions is a necessity in the real estate business, particularly when it comes to negotiating an offer to purchase. Remember, emotions often run high when you're dealing with people's homes.
- English language proficiency and comprehension
- This is an essential skill, particularly for drawing up and understanding real estate documents. Listings must be self-explanatory, so that someone who has never seen the property can look at the listing and understand it. Offers to Purchase must also be crystal clear.
- Computer proficiency
- It's vital to have the basic computer skills to access listing databases and other proprietary systems and data. These skills will become even more important in the future!
- The ability to negotiate
- Of course, this is a very important factor in closing a deal. You must be able to negotiate with both the vendor and the purchaser, and bring them to a mutually acceptable and, therefore, successful transaction.
- Good interviewing techniques
- It's important to be able to question people with relative ease. After all, if you don't ask the right questions, it will be hard to give your customers and clients the best possible service.
- Excellent people skills
- These skills are the hallmark of the real estate sales profession. It's essential that you enjoy working with people, be genuinely interested in them, and quick to understand their needs and wants so that you can develop a rapport and establish a good, strong working relationship with both purchasers and vendors.
A word of caution
About half the people entering the profession quit or transfer to a different brokerage within two years of starting. It's a long and difficult road to success in real estate, so it's best to have every intention of making a long-term commitment to the profession. From the beginning, be prepared to invest time and money in a learning process that will be ongoing. Even after you've obtained your licence, you'll be required to keep up-to-date with changing laws, procedures and technology through continuing education and professional development.
Mobility is also a key factor. Real estate practitioners are constantly in and out of the office making contacts, procuring listings, showing homes, and negotiating deals across the geographic area for which they're responsible. In addition, you'll have to make personal sacrifices in order to be available to sellers and buyers at almost any time of the day or evening. Long days, high stress levels, and a reduced social life can also be part of a career in real estate.
Income is based on commission, which is determined by the amount of property you sell or lease. For example, if you list and sell a property, your commission is paid to your broker who then splits it with you. If another salesperson lists the property and you sell it, the total commission is first split between the two brokers (listing and selling), who then distribute the appropriate percentages to you and the other salesperson. In some cases, brokers pay an extremely high percentage of the total commission, but then they are usually required to pay for more operating expenses. You should also take into account the expense and time involved in establishing a practice. Some brokerages expect you to have enough capital on hand to remain financially independent for at least the first six months.
Earnings vary according to location, specialization, market conditions, and from salesperson to salesperson depending on experience, training, skills, contacts and effort. Some real estate professionals earn six-digit incomes; others may work for months or years with almost no income. There are no "average" earnings, and that makes the ability to live with uncertainty a definite asset. For the most part, you get out of real estate what you put into it.
The cost of becoming licensed
Across Canada, the cost for mandatory pre-licensing courses generally runs from $1,200 to $1,500. Most brokers in Canada belong to local real estate boards and the membership dues range from $800 to $1,500 per year. You will have to pay for Errors and Omissions insurance, and you may also be responsible for fees for other board services. Other costs include advertising, the use of a vehicle for showing properties and a cellular phone or a pager.