Are you looking for a new career, one that is relatively stable and through which you can gain a decent income doing what you love? Perhaps you were inspired by different television shows that explore how to get your fixer upper in great condition. The property business is not just potentially lucrative, there is a distinct emotional pull to the idea of setting up a family’s new home, or helping an industrialist set up shop in a new area.
If you are strongly considering a career in real estate and are working towards getting your license, the following is a brief primer on the ins and outs of the business.
Get Your Finances Straight
In order to get into the real estate business, it’s usually best to first map out and understand your current finances. You can start to get involved with no money down, but this would be tough. Most likely, you will want to go to a lender who will, in turn, ask to review your financial history.
You should request a copy of your credit report, review it, and based on that, figure out the financing options that works best for you. Real estate investment groups can offer different plans, sometimes a mortgage or a traditional loan. There is also the idea of reaching out to private lenders or business partnerships, which are slightly more newfangled but are also increasingly encouraged nowadays. A lot of what will be recommended to you depends on your investment strategy, but you will ultimately be able to draw the appropriate conclusions via consultations with financial advisors.
The All-Important Commission Rate
Real estate agents, of course, make money by requesting a commission for every service they are able to provide. These “services” basically entails helping people to buy and sell a home by displaying an in-depth and near-perfect understanding of the town or state’s real estate market and the attendant dynamics. Also, he or she must take the time to ensure that each transaction follows local laws and regulations while doing their best to score a good deal for their clients.
Based on the performance of these services, the commission is thus split by the buyer and the seller’s respective real estate agent. Which is paid out when the sale is complete. The best commission to secure for yourself would be between five to seven percent, although some agents will only take a flat fee. In order to set an enticing commission rate, you should review the local competition and have the fee commiserate with property values in the area.
Difference Between Lister Agents and Buying Agents
Perhaps this is somewhat obvious, but there are generally two types of agents. There are those who lists homes for sale on behalf of their clients utilizing various local listing services – the selling agents. Then there are the buying agents, who are tasked with finding homes for potential buyers, possessing a deep understanding of what the buyer wants and is on the lookout for.
The listing agents are those who give tours of different homes on sale, and then if the buyers express interest, both agents on opposing sides of the aisle enter negotiations for the sale on behalf of their clients, agreeing to a final price. They both also need to make sure that the sale is legal before closing.
Different Kinds of Real Estate
Just as there are different agents on what you can call “opposing teams,” there are different kinds of real estate “pies” agents may wish to turn their attention towards for their businesses. There is residential real estate, the most common of which is a single-family home; commercial real estate meant primarily for large scale endeavors such as shopping malls and hospitals; industrial real estate, geared towards the manufacturing industry, and finally, land. This final category is perhaps a bit more diffuse, but it mostly means farmland or ranches.
Each category has its own hierarchy and set of subdivisions, but these are the general areas of focus. Depending upon your business goals and investment strategies, you might want to choose to zero-in on a particular real estate venture to get things going financially.
Real estate is not only a lucrative business, it is also huge and can entail many complexities depending upon which avenue you would like to take. While helping people to buy and sell their homes remains the most popular, there are different endeavors out there, each requiring their own set of criteria and business acumen. Deciding first on where you would like to take your work in the future is essential for enduring success within the business.