Change of plans • Defining Homes

So you want to be a real estate agent. Just be sure you know what you’re in for

By Rich Lopez

Dan FlynnNo one needs to remind you that these are tough economic times. Sometimes that means calling for serious measures like a career change. Real estate is an attractive industry because the rewards can be great for the bank account and you get to be your own boss. But before you dive head first into the waters, there is some information to know and consider. Hey, it’s a new career — what did you think?.

“Those not in the industry have some great idea that you walk into a real estate office and clients walk through the door and you make giant commissions,” Realtor Dan Flynn of Dave Perry-Miller Intown says. “The reality is nothing drops into your lap.”

Flynn has been in the real estate industry for 16 years, switching over from the telecom industry. When getting into real estate, he followed all the right steps, but had to face the realities of going into what he calls a very expensive career option. According to him, that is the one piece of information, people need to know.

“You pay for everything yourself,” he says. “You pay the broker to allow your license to hang in their office and you pay a portion of your commission to the broker as well. There are some very large expenses and you must have income to offset those in addition to earning income as you go.”

Don’t let that scare you. Flynn wants only to guide those interested in joining the industry and provide the information and insight he could have used when he began. That insight actually comes in handy even before getting your agent’s license.

“When thinking about getting a license, you want to consider the ultimate goal.  People can become a broker after becoming an agent. Also, consider transferable college credits when applying for real estate classes. You will want those credits behind you when the time comes to sit for that exam.”

Before any exam, there is study time and coursework is necessary to get to the test.
However, classes are available either online or in classroom form for those who can benefit from peer review. Accelerated plans are an option for those eager, like Flynn, to begin selling homes.

“The required courses came easy to me because everything seemed logical and natural,” he says. “I do understand getting through the coursework and tests through school can be very arduous for many.”

So you got your license — now what? Flynn emphasizes the money issue because there are fees and costs to be easily missed. Plus, if you are planning this as your day job, more financial planning is needed. National, state and local associations will have fees. MLS charges, for electronic key usage to get into homes will rack up, as will self-employment taxes, marketing materials (i.e. business cards). Brokers may require more education so they are up to speed and insurance is a must to cover any mistakes made. And even your clothing.

“You will be expected to dress and present yourself in a certain way,” he says. “Make certain you have one full year’s expenses tucked away in a bank account somewhere to pay the rent, car, whatever. It can be overwhelming. Just be prepared.”

Now you can head out into the field. If people aren’t going to drop in your lap, then you start hitting up the people around you. Flynn says this is the best way to start getting the word out about your new career and how you can help those who know you.

“You must go out and find all of the clients you work with,” he says. “You start with your personal sphere of influence and work outward.”

One thing Flynn brings up is somewhat of a surprise. Hanging your license isn’t like hanging up your diploma. A strong broker can shape a new career into a successful one and where you hang it is a crucial decision. Your new real estate license is indicative to potential clients of your reliability.

“Interview with many agencies,” he says. “Unlike looking for regular employment, you are not trying to get them to take you on so much as they are trying to convince you to come their way. My experience tells me there are extremely few options for new agents so when interviewing, look for those places that encourage you to come to the office to work and for free or low-cost education and have someone assigned to you for help.”

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First, know this

Before heading into the real estate world, the least you need to know are the requirements set by the Texas Real Estate Commission. Meet all these and you are on your way.

• You must be a U.S. citizen who resides in-state and be 18 years old.

• Texas law requires 210 hours of coursework to be  completed.

• Before applying for the state exam, proof of course completion is required.

• Apply for the state examination for your inactive salesperson license. This is done online at the TREC website.

• Pass the state examination.

• Filing an application authorizes a background check.

• Obtain sponsorship from your broker to activate your license. You are unable to practice prior to active licensure.

This information is from eHow.com under How to Become a Real Estate Agent in Texas and at the TREC.state.tx.us.

This article appeared in the Dallas Voice print edition of Defining Homes Magazine October 8, 2010.

—  Michael Stephens

Ask the experts • Defining Homes

Ask the experts

In March 2009, President Obama released the Home Affordable Modification Plan (HAMP). This would help alleviate the pressures of potential foreclosure, lowering monthly payments and still maintaining good standing in credit. But according to RealtyTrac.com’s list of foreclosure hotspots, Dallas/Fort Worth ranked 96 out of 203 with (at the time) more than 10,000 properties listed as foreclosures — a relatively small number considering the populations of both Dallas and Fort Worth. But it does make us ask the experts, “What does Obama’s mortgage aid plan mean for homeowners here and can it help those in search of buying their first home?”

Randy Hodges
Randy Hodges

Randy Hodges,
Dave Perry-Miller InTown
First of all, the federal government’s making homes affordable plan really has helped countless numbers of American families keep their homes. It’s important to note, however, that the programs being offered by the federal government should not be mistaken for a “hand-out.” Rather, these programs offer Americans, who are struggling to avoid foreclosure, the opportunity to restructure their debt by guaranteeing certain aspects of the lending process. The positive in this is that will all be to the benefit of both the homeowner and the lender.

Tomi Kuczynski,
Prudential Texas Properties’ Homes On Call
One of the first glitches I find in the plan for most Dallas/Fort Worth homeowners is the requirement of a loss of at least 15 percent in their home’s value. Most areas throughout the Metroplex have not suffered such losses in value. There are areas such as Preston Hollow, McKinney and Oak Cliff where the numbers neared 20 percent, but these areas have already begun recovery in the market. Furthermore, analysts predict the actual number these lenders will be seeking is closer to 40 percent. If this prediction is true, areas throughout California and Florida will be the benefactors of this relief plan, not the Metroplex.

Each plan has been implemented primarily to prevent foreclosures, which is my second concern. Both plans require homeowners to be up-to-date on their mortgages to qualify. I consider this to be one of the main failures within the first attempt of this plan, and will continue to be a deterrent in providing relief to those who are truly in need for Obama’s second attempt. While they struggle to find an answer, they will not be able to look to this new plan for help without being completely current.

Jeff Updike
Jeff Updike

Steve Shatsky,
Prudential Texas Properties
I think that the greatest impact of the latest mortgage aid plan is that it will keep some percentage of homeowners in their homes rather than displacing them and putting more distressed inventory on the market. In some parts of the country there is excessive inventory and a large percentage of that is distressed sales, so anything that helps keep people in their homes, which helps to lower inventory levels, will also likely aid in stabilizing property values and help them to begin to climb again. Here in Dallas we have a good amount of inventory and that, combined with excellent mortgage rates, already makes it a great time to buy a home regardless of any impact from the latest mortgage aid plan.

Jeff Updike,
Re/Max Urban
We are extremely fortunate because the mortgage delinquency rate in Texas is less than half of the national average. The HAMP and the Home Affordable Foreclosure Alternatives (HAFA) programs will help a small percentage of delinquent borrowers refinance to a permanent mortgage that will help them stay in their home.  For most others, if they cannot make the payments because of unemployment or underemployment, they will probably be forced to sell their home through a “short sale;” otherwise, it may be lost in foreclosure.

Barbara Stone

Barbara Stone

Barbara Stone,
Allie Beth Allman & Associates
If the plan is successful, it will reduce homeowners’ mortgage payments (those homeowners who have been affected by the economic crisis through no fault of their own), and help them stay in their homes instead of being foreclosed; thus reducing the number of foreclosures nationwide.  Another benefit homeowners would realize is a better credit rating, rather than having a foreclosure reflected on their credit report.
And if homes are not foreclosed on, there will be a better chance for these homes to be kept in better condition, rather than being vacated and left untended. If these homes are put on the market, then homebuyers will benefit with a better quality home to purchase.
The Obama mortgage aid plan could also help boost the value of homes and neighborhoods by keeping lower-priced foreclosed homes out of the market. If values stay stronger, then discouraged potential sellers will consider putting their homes up for sale, instead of waiting for the market to rebound. Homebuyers will then have a larger selection of homes to choose.

For more information on the  HAMP  and HAFA programs, visit 2010mortgagerecoveryplan.org or MakingHomeAffordable.gov.

This article appeared in the Dallas Voice print edition of Defining Homes Magazine October 8, 2010.

—  Kevin Thomas