Is now a good time to get a real estate license
Well, that depends.
There are always people entering and leaving the real estate industry no matter whether times are good or bad. And of course, now would not exactly be considered a good time in the housing industry.
But I'm asked that question from time to time and it's just my opinion but I personally wouldn't try to get started as a real estate agent in Charleston today.
Many people think that real estate is easy and that real estate agents make a lot of money. The problem stems from that nasty 6 percent commission that Lesley Stahl mentioned on 60 Minutes years ago so people tend to multiply a couple of million dollars worth of volume by 6 percent and figure they will make $120,000.
What they forget is that there are two sides to any real estate transaction, the listing side and the buyer side and most of the time, there are two agents involved. So you can immediately cut the commission in half. Now you have to take into account that you are going to work for a real estate agency and depending on where you select to hang your license, there is a commission split that must be paid to the agency that starts anywhere around 50 percent and can go as high as 100 percent (but generally only after you have "capped" out the amount of commission split with your agency that year).
So let's use two thirds to you and one third to the agency so now the $60,000 is $40,000. Let's take into account business expenses which include licensing fees, membership dues, technology and marketing expenses and whatever else and you should count on a minimum of $10,000 in expenses annually so now you're down to $30,000.
But that's only if you can do $2 million dollars and that's easier said than done. You see, there are thousands of real estate agents in the Charleston real estate market and many are long time veterans with a large sphere of influence, a long record of success and high name recognition. And while some people will always use a new agent or some family and friends will give you a chance to help them buy or sell a home in Charleston, all of the above is probably why I've heard that the failure rate in real estate is close to 80 percent.
If all that sounds discouraging, I apologize because certainly there will be someone in real estate school right now who passes their exam, gets their license and becomes a top producer within the next year and earns over $100,000 next year and for many years to come.
But more than likely, they are the exception, not the rule.
You could make a lot of money in real estate but above all please remember this, it's not easy.