Today, I get the pleasure of dropping my oldest daughter off for her junior year at the University of Maryland (Go Terps!). I cherish these moments. Even though the house will feel much emptier, I get a lot of “nachas” knowing that she will have the opportunity to learn and grow while making great friends and having incredible experiences along the way.
This is also the time of year when those who graduated last year realize their next chapter starts now.
I get a lot of resumes from college graduates looking to start their careers in real estate. It’s more this year than any year prior.
I recently received a resume from a young man who graduated top of his class from one of the top business schools in the country. He said his career path was to become a real estate agent. After spending four years and a fortune of money at a top institution, he only needed to pass a 72-hour real estate licensing course, which would cost him a few hundred dollars and two weekends or so.
Aspiring to become a real estate agent is a new trend. Fifteen years ago, I could have counted on one hand the people who dreamed of becoming one.
Being a real estate agent was mainly for people in their second, third, or fourth career. It was better than bartending or being a struggling model. It allowed flexibility, and you could make some decent money on the side while you pursued your passion. It was never aspirational. Never the end goal.
My first real estate office was like a band of misfits. We were musicians, artists, actors, interior designers, and wanderers on our way to something else.
Some of us had a knack for the business, and along the way, we made it our full-time profession. Some of us hated to love it, and others loved to hate it. I have had my complaints, for sure, but I am also incredibly thankful for what this business has given me. It provided me the stability that being a jazz musician could not. For that, I am grateful. But it was not the career path I planned when I moved to America with my sax.
So what changed? Why are young people suddenly drawn to the profession? Among all the applicants I meet, there’s a naïveté. They don’t understand how difficult it is to be in the top 5% of agents who make 95% of the money. The average annual income for a real estate agent is around $88K in New York state. That’s a lot of money, but it’s skewed by the enormous amounts made by the few top producers. Many of the same top producers these kids have been watching for years on Bravo.
I bear some responsibility for this, I guess. I started the trend and genre of real estate reality TV. We launched “Selling New York” on HGTV in 2009. One of my primary concerns was that the show was about the property and not the agent. This was important to me. My business has always been about the client and the property. We are the facilitator, not the focus.
Honestly, I didn’t think the viewer would be interested in the life and times of a real estate agent. Boy, was I wrong.
People loved the drama.
The money.
It wasn’t about our profession or real estate. It may as well have been a show about people selling coal.
Mark Burnett, the man who brought us Survivor, The Voice, and the Trump presidency, will be the first person to tell you that reality TV has nothing to do with reality. It’s entertainment. I experienced this firsthand and saw how it evolved over the years. It was not about the property or the process. It was about giving the audience something they couldn’t take their eyes off. Like a train wreck – but more cringe-worthy.
The most mind-blowing part for a lot of viewers are the commissions. The shows would note that selling a property earns an agent $500K in commission. The show would also make it seem as though all the agent had to do to get this money was open a few doors and have a few tense, dramatic phone conversations – and maybe throw a party.
Let’s break down that $500K. First of all, you almost always have a co-broker. Take that $500K to $250K. Now 30% goes to the brokerage – making it now $175. Pay your taxes and your team, additional overhead, and it’s maybe $75K. Listen, it’s still great money – but not half a million. And it’s always more than a few phone calls and showings. And takes way longer than the 45 mins that the show allots. It can take days, months, or years. It isn’t that easy.
My advice to anyone looking to make a career in this industry is to do your homework. There is no salary, no benefits. You eat what you kill.
This is an incredible industry with lots of highs and lows. It can be gratifying, but it can also be just as challenging. Speak to top producing agents (the ones in real life) and listen to their stories. Give it some thought – and then go for it.
Side Bar:
Today, we lost one of the most badass and beautiful musicians I have ever had the good fortune of knowing. Every time I saw or heard Joey, he brought a smile to my face. He was transformational in that way—a true gift.
Rest In Peace, Joey DeFrancesco.
Let’s do this.
-Shaun