When markets are hot like Arizona, being a real estate agent looks like easy money. Homes are flying off the market within days (or hours) of being listed. Mortgage rates are favorable, encouraging more people to become first-time homebuyers or helping current homeowners to afford their dream home.
That’s the part that everyone sees. What’s underneath, however, is a bit more surprising than many people realize. If you’re considering getting your Arizona real estate license, it’s important to look beyond the market to know what it really means to buy and sell real estate.
Here’s what most people won’t tell you about becoming a real estate agent in Arizona.
The mindset of a real estate agent
From seeing homes flying off of the MLS to watching HGTV, my oh my, it looks easy like a broadway show or an NFL football game. It is just a walk in the park. People just flock to you and they are all happy and so excited to buy a house. This is when Jane the Virgin hits the breaks and wakes up to reality. This is a slice of the pie, and the lowest skill and experience level are required.
A Broadway show does not just happen. There are months of preparing for this one-hour presentation. An NFL player has practiced since he was a kid, and in the NFL, he is practicing, working out, eating right all week long to play 30 to 60 minutes. As a real estate agent, you have the amount of work, training, coaching, and mentorship time that goes into a successful real estate transaction. Sure, you can get lucky out of the gate and have someone you know to buy a house through you, but that is not a career in real estate.
As a real estate agent, you will be doing cold calling, paying to generate leads, paying to create your brand, paying to mail to your sphere, marketing, and advertising to just have the ability as a real estate agent to sell yourself to your prospective clients. Then you have to sell them to sell their house or buy their house. There is an art to sales that one must master.
You’ll do a lot of free work
Real estate agents work for a commission. This means that you only get paid when a home sells. In the meantime, you’ll be doing a lot of free work to meet clients, conduct showings, and negotiate in order to generate transactions. Many real estate agents don’t make a dime in their first 1-6 months in the business. That’s because it takes an average of 47 days to close on a house, so even if you get a contract on your very first day as an agent, you won’t get paid until weeks later.
Understand now, as a new real estate agent, you are competing against large real estate agents known as mega teams who are doing 93% of the business as a group. 93% of real estate is said to be done by seven percent of real estate agents. This naturally means seven percent of the business is left over for the 93% to fight over. Mind you, most of those will be their sphere and complicated buyers and sellers.
To become a real estate agent in today’s real estate market, you will want to join a successful real estate team. As you can see, becoming a real estate agent who can last more than one or two renewals on your real estate licenses is tough. Also, know that team owners are less profitable than you are per transaction. They do all of the hard work and you do the medium and easy work. They have the leads, systems, platforms, admin, call centers– you name it, is paid for you, so it takes several transactions by you to make them profitable where it only takes you one transaction to be profitable.
It’s feast or famine
In recent years, the real estate market in Arizona has been as hot as our deserts. But that hasn’t always been the case. Remember the housing crash just 10 years ago? It shows that even highly desirable markets like ours are vulnerable to economic uncertainty. When mortgage rates and unemployment climb, the housing market takes a hit. This means you’ll be working harder for leads because there are fewer of them. You’ll need to be excellent at saving your earnings for a rainy day because there will be times where your prospect well dries up.
In today’s real estate market, we are predicting in the nearing months that an entry-level home in places like the city of Maricopa, Buckeye, and San Tan Valley will hit $300,000. This means a buyer could be paying around $1,913.75 monthly for their house. To be frank, that is a lot of money for the first-time buyer to pay for their housing in Arizona based on what the average person in Arizona makes per month. Real estate agents should be looking at that number and figuring out how to pivot with the future real estate shift that will come to Arizona.
A career in real estate requires real estate agents to constantly be looking at trends and predict the next housing shift. New real estate agents most likely do not have this skill nor even this vocabulary in their minds. A real estate career for real estate agents requires a lot more skills and experience than what most people think about who is in real estate school to get their real estate license to become a real estate agent.
You’ll wear a lot of hats
Real estate agents are in the people business. It’s not just about showing homes and drawing up paperwork. It’s also about connecting with people in the community to get your name and brand out there. It’s about networking lunches and mentoring new agents. You’ll need to be a master marketer and lead generation superstar, which might be learning about new technologies. The skills required to be a successful real estate agent in Arizona continues to grow, and you’ll need the right mindset to grow with it.
In short, in real estate, we have lead generation through marketing and sales, we have showing homes, listing homes, admin or managing the escrow or listing, psychology for your client, their client, and their client’s agent to keep the deal together. There is a lot of work for a real estate business that most who become real estate agents never even dream of.
If you are in real estate school getting ready to become a real estate agent you should look at this no different than opening up a real estate business, which is no different than opening up a boutique business. They both are businesses. If you are doing this, do you have the money to do that? Do you have the skills and experience to do that? Have you ever sold anything at a massive level? Have you ever run a marketing and advertising agency before? For most, if not all, the answer is most likely no.
I can only imagine your real estate school that you attended should have let you know the failure rate in real estate for new real estate agents. Assuming they did, why would a newer real estate agent think they can magically get a real estate license and then magically turn into a successful real estate agent business?
Joining a real estate team
As a new or newer real estate agent, we recommend getting advanced real estate training, coaching, and mentorship. The issue for a new real estate agent is that they cannot afford to get the best real estate training, coaching, and mentorship. No matter how great of a real estate brokerage you find, the quality of training, platforms, websites, leads, appointments you made, or admin support cannot compare to what a successful real estate team can offer a newer real estate agent.
Joining a real estate business vs creating a real estate business will commonly lead to success quicker than trying to go at it alone in your career in real estate. Start your real estate career with the best tools and support available. It is not about splits, it is about real estate agent survival, then the real estate agent thriving. We are here to help you with your real estate career after you get your real estate license.
Your brokerage plays a key role in your success
You don’t get paid an hourly rate as a real estate agent, so in a sense, you’re working for yourself. But if you’re not an independent agent, you’re also working for a brokerage. This brokerage plays a large part in your success as an agent. Because your name is tied to the brokerage, it can have a lot to do with your reputation in the community.
When you choose a reputable brokerage, you’ll look good by association, even if you’re brand new to the field. However, if you choose one that isn’t well respected in the community, then you may struggle to get clients.
The James Sanson team at Keller Williams is the leading real estate team within a leading real estate brokerage in top Arizona markets including Phoenix, Tucson, and Yuma. We’ve earned the trust and respect of the clients we serve and are continuing to grow our team. If you’re looking to expand your career, we invite you to reach out and join a winning team!
If you do not have your real estate license yet, then focus on your real estate license accomplishment first. Then let’s talk. We will take part-time real estate agents looking to go full time, and we will take full-time agents looking to build their real estate career. We love newer and new agents who honestly have a strong work ethic who can benefit from our real estate team. Agents get everything they need to be successful on our team.
Once you get your real estate license and want to learn more about real estate, then you can read these other real estate articles. Once you have your Arizona real estate license, then schedule a meeting with Brittany to go over our real estate team in depth.