Tomorrow's Real Estate Superstars

Posted: April 06, 1986

Wearing a gray, pinstriped suit, carrying a new leather briefcase, armed with a million-dollar smile and a go-get-'em attitude, Ken Kean arrived for his first day of work last week as a real estate agent.

Kean had seen the newspaper ads showing the faces of men and woman flashing million-dollar smiles. They were, he thought, the faces of superstars - agents who sold more than $1 million worth of houses last year.

Kean, 28, was hooked. He saw real estate sales as a path to riches and independence. The sky was the limit. He could earn $20,000 or $120,000.

He chucked his job in Bethlehem, moved back to Philadelphia and, after a series of grueling interviews, landed a job with Poquessing Corp., a firm with seven area offices.

Kean is not alone. Today's single-digit mortgage interest rates have sent a surge of home buyers scurrying for houses and that, in turn, has created a demand for real estate agents. As a result, the number of people flocking to schools to study for real estate licenses is mushrooming.

"It's a great way to make a living," said Kean, as a Poquessing manager showed him his new office - a small cubicle with a desk, two chairs and a telephone. "It's a lucrative field. It's very entrepreneurial - you're your own person and you set your own schedule.

"There are no promises in this business. How much you earn depends on how hard you want to work," said the self-confident, seemingly tireless Kean. ''You can work 20 hours a week or 60 hours a week."

"It had better be 60 hours," interjected Ann Redwanowski, vice president and sales manager of Poquessing's Center City office and Kean's boss. "We find that people have to work 50 to 60 hours a week to be successful.

"In fact, we hired Ken because he indicated that he will make that type of commitment. We want energetic people who are aggressive in a nice way. We have to cover our expenses. We're putting a lot of money on the line - $10,000 to $15,000 a year to train and equip a new salesperson."

Kean, according to Redwanowski, is just one of 15 recent hires. All are enrolled in in-house training programs. And Poquessing, which has more than 150 sales agents, will conduct five additional recruiting and training programs this year. Each class will have 15 to 20 new hires.

"Our brokers must sell $1.5 million worth of real estate in a year," said Redwanowski. "If they don't, we ask them in a nice way to please exit.

"It may sound cruel, but it isn't. Ten years ago, selling a million

dollars worth of property meant something. Today, it's nothing.

"For an agent, it's about $15,000 in commissions," she said. "If they can't sell more than that amount of real estate, they're not going to make it. They're better off doing something else."

In fact, about one in three agents Poquessing hires leaves the firm before celebrating a first anniversary there. Nationally, the figure runs between 30 percent and 60 percent, according to brokers and academics.

"A figure as high as 60 percent wouldn't surprise me," said Liz Johnson, a spokeswoman for the National Association of Realtors, a trade organization. ''There are 2.4 million people with real estate licenses. But at least half are inactive - they're not in the marketplace. The washout rate is very high.

"During boom times like now, the profession attracts a lot of people who think they can make a lot of money," she said. "When a recession hits, they leave."

The Realtors association membership figures, representing about 80 percent of all full-time agents, reflect what's happening in the marketplace. The organization counted 706,154 members in February, up from 681,121 members in February 1985. That is 23 percent more members than the most recent low in May 1983 but well below peak membership of 761,391 in December 1980.

"A lot of people are jumping on the the bandwagon for all the wrong reasons," said Ann Bailey, vice president and residential manager of Jackson- Cross Co.'s residential division. "They think residential sales is high

dollars and easy money. It isn't.

"To be successful, agents have to work 60 hours a week. During your first two years, you can expect to give up all your Saturdays and Sundays. There are no weekends in residential real estate. And you better be prepared to do a lot of night work because that's when customers are free to look at houses."

"This is no business for the bored housewife looking for something to do," cautioned Jay Lamont, founder and director of Temple University's Real Estate Institute. "The people that are going to be successful are those that will put in long hours. It's a very demanding profession. But the rewards are there for the people that are hungry."

Suzanne Lidis of Jackson-Cross is proof-positive that the money is there for those who meet the challenge. According to Bailey, Lidis' commissions approached $40,000 last year - her first year in the business - and will be double that this year.

Lidis, 47, said she has found real estate to be exciting as well as rewarding. But she also warns that it's also a very demanding profession.

"It's hard work with a capital H and a capital W," said Lidis, a former assistant dean of students at a nonprofit school. "I can see why many people get disillusioned. You're on call 24 hours a day, and there's a great deal of strain on you.

"I know I feel a great responsibility to help a buyer find the right house and to help a seller to sell as soon as possible. To be a good Realtor, you've got to like people and enjoy helping them."

Lidis' earnings, everyone pointed out, are the exception rather than the rule for first-year sales agents.

Nationally, first-year sales agents earned a median wage of $6,000 in 1983, according to the NAR. By comparison, agents with three or more years' experience earned a median wage of $18,000. Brokers, who have taken advanced real estate education courses and have more extensive sales experience, earned a median wage of $30,000.

"Those are the most recent figures we have," said Johnson. "I'm sure the figures have improved since then because real estate sales went up in 1984 and 1985."

"Surveys of our graduates show that first-year agents can expect to make

from $9,000 to maybe $18,000," said Hugo Weber, who operates Polley Associates of Newtown Square, a trade school that annually trains 3,000 to 4,000 throughout the state for real estate license examinations.

"The key to the business isn't the training we provide," said Weber. ''We help them get started, but it's the broker that hires them that makes or breaks their careers.

"Most of the people that drop out or fail in real estate can trace their problems to poor sales training. The majority of brokers have sales-training programs that are weak at best.

"The greenhorns, as I like to call them, aren't properly taught how to talk to prospective clients, how to make a presentation, how to close a deal. They get frustrated and leave. In fact, less than 60 percent of our trainees are still in the business 18 months after they start."

Despite these red flags, people are enrolling at real estate trade schools in record numbers.

"We hit a record 1,328 students for the fall, and for the spring semester we had to mail back 300 checks from applicants," said Lamont. ''Unfortunately, we had no more room at the inn."

"The market for us is extremely strong," said Weber. "When interest rates dropped below 12 percent last year, our enrollment doubled. When they fell to 10.5 percent this year, our enrollment tripled.

"We run both day and evening classes because most of our students - about 70 percent - hold full-time jobs. I think less than 20 percent of them come in thinking that they'll be brokers. They're dabblers."

"The majority of our students are female," said Weber, who, with his wife, Donna, operates 28 training centers between Newtown Square and Pittsburgh. "Many are housewives who have reared their children and are looking to get back to work. Others have night jobs, like waitressing, and are thinking of switching careers."

Students at Polley come from all walks of life. They range in age from their 20s to their 60s. Most of them enroll because they feel a real estate license is a ticket to a better life.

"I'm studying for my license because I want to make more money than I'm making now," said Debra Modesto, 30, a beautician from Ridley Township. "I know I'll be good at sales. And I like dealing directly with people."

An impending layoff and college tuition bills for his children made a student of John McCartney at age 58.

"I worked 32 years for Westinghouse in Lester, but they're closing down the plant in June," he said. "It's tough starting over at my age. But I can't sit around my house. I've got bills to pay. I picked real estate

because the firms are willing to take people my age."

Janice Iacona, 22, of Wilmington, said she was attracted to real estate

because it offers flexible work hours as well as the chance for "good money."

"I have a small girl, so being able to make my own hours is a real plus," she said. "And your earnings depend on how hard you're willing to work. I like the idea that you control you own future."

But the road to success, Lamont warned, is paved with potholes.

"It's not just the new people getting into the profession that I'm concerned about," he said. "This year mediocre people are going to make $50,000. They're basically people that earn $22,000 to $28,000. They're not superstars but they're spending money like it.

"I was addressing a Realtor conference at the Jersey shore last week and the parking lot was loaded with new, fancy cars. These people aren't saving for the rainy day, and they should be. This is a cyclical business. This boom isn't going to last forever."

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