Updated: May 13, 2020
Making a career switch into the real estate can be exciting or nerve wrecking. Today, I will touch on the 3 most burning questions people ask before becoming a property agent.
Yau Hong (not his real name), my friend's brother, called me one day.
He was 44 years old and wanted a career switch because he felt burned-out. Just like me previously, he flew a lot for his work for more than 2 decades.
He wanted a change of environment and was decided to find out more about real estate before giving it shot.
He had a thousand and one questions for me but basically I could group them into 3 broad category. The questions got more and more challenging :
(A) How to become a property agent?
(B) How much does a property agent make?
(C) Which is the best agency to join?
"I am basically a full-time psychologist who shows houses every now and then." - Dori Warner
(A) How To Become A Property Agent?
Basically, Yau Hong wanted to know how much time and money he had to spend to get the RES (Real Estate Salesperson) license.
In terms of expenses, the course and exam fees are about $1200. This cost can bump up if he has to re-sit for his exams.
On the other hand, he could get subsidies from SkillsFuture and Utap to help reduce the cost.
In terms of duration, the course range from 9 days to 2 months, depending if it's day-classes or evening-classes.
The 3 exams have pre-determined dates. So there is alway a time gap after the course ends to the exam date.
Besides, he has up to 2 years to sit or re-sit for the exams.
After he has passed his exams, Yau Hong has up to 2 years to apply for the license. This is in case he decided to land another job before hand.
For more details, my earlier article "How Can You Become A Qualified Property Agent In Singapore? (2020)" will provide more details and comprehensive description of the entire road map.
(B) How Much Does A Property Agent Make?
Yau Hong said he knew from the news that a 26 year old agent netted $1.5 million dollars in commission after selling a Le Nouvel Ardmore penthouse in for $51 million dollars.
He was a very down-to-earth person and added that he believed that such sensational news cannot apply to the majority. Or else that news would not make headlines!
I commended Yau Hong for his intuitive observations and said that an agent's income depended largely on 3 things :
The product (and subsequently the commission);
The sales cycle for that product; and
How well the agent can add value to the clientele for that product.
I explained to Yau Hong and cited two extreme examples for him to see a better picture.
Agent A's GTA (Geographical Target Area) is only HDB room rentals.
The commission for a 1 year lease is about $350 to $400.
This is a "fast moving" product because clients response to advertisement is that very day it is put up.
Closure is fast because negotiations are simple.
There were no complex financing calculations nor complex legal implications involved.
If Agent A closes 30 cases a month, the gross commission is at least $10,000 per month.
Agent B's GTA (Geographical Target Area) is only bungalows in central area.
The commission range is wide because it depends on the bungalow selling price as well as if there is a need to share commission with cobroke agents.
This is a "slow moving" product because there are not many high networth clients in Singapore and sometimes it can take up to 2 years to make a sale because of very few viewings.
Besides, Agent B has to prospect that area for minimum of 3 years in order for the bungalow owners to build rapport.
Although gross commission can go up to more than $800,000 per year, the advertisement costs can be as high as $25,000 per month!
I explained to Yau Hong that CONSISTENCY is the key element here.
It's more prudent to go for activities that give REPRODUCIBLE results than to have those one-off sensational sales.
(C) Which Is The Best Agency To Join?
I explained to Yau Hong that the real estate business is quite the opposite of "working for a company". Since all agents are self employed, the agency has to "work" and "support" agents instead.
So it's very misleading to give merit points based on just the size of the agency. There are small agencies that are highly specialised in commercial office sales and rentals. These outperform the Big Boys anytime, and will be very suitable for agents who are conversant with commercial office dealings before they join the real estate industry.
In today's property market, the 3 criteria for a good agency are :
New Launches (Front End Support)
IT & Research (Back End Support)
Manager (Mentoring Support)
1. New Launches (Front End Support)
Today, new launches make up more than half the residential sales market. The other lesser half is resale market.
An agent should first shortlist to join agencies that has many new projects to offer. You want to have a good spread of products to offer to your clients.
But before jumping in hastily to join an agency that has the most number of projects, think again. Too many projects may also imply that resources can be spread out too thin.
"What is good for the goose, may not be good for the gander." - Proverbs
2. IT & Research (Back End Support)
Today's agents can only add value to their clients if they have strong IT support from their agency's mobile app.
The minimum that the mobile apps should have are the full suite of financial calculators, access to latest transacted pricing, condo floor plans, presentation slides on-demand etc.
More advance features can include an analytic suite that can show trending of sales volume and $psf for HDB, Condo and landed by Regions (CCR, RCR and OCR) and by time (12 mths, 12 Qtrs, 10 yrs).
The Research Department can help position the agent to add more value. By sending simple and yet comprehensive research reports to the clients regularly, the agent can build better report without having to spend time to collate bits and pieces of news here and there.
3. Manager (Mentoring Support)
Joining the right agency is important. But finding the right manager is more important.
This is because the right manager can mentor you to identify your gaps and then work together with you to help you accelerate your sales.
Just like you would go for job interviews before deciding on which company to work for, you should also interview the managers and shortlist who can coach you personally.
Yau Hong called me several more times later on to clarify on more questions.
He said he would source out for the schedules from the various schools before registering for the RES Course.
CALL TO ACTION
I've trained at least 5000+ agents over the last few years in my workshops and CPD courses.
At the same time, I've coached many agents who eventually became outstanding Top Producers.
What you do during the first 6 months can make or break your career. Starting right can save you lots of frustrations.
There's just so much more to cover under each of the options highlighted above. That's because your situation is unique and the final strategy has to be customised to suit you.
I look to hear from you and helping you past the first hurdle of getting the license successfully.
Anthony Yeo is a Senior Associate District Director of OrangeTee & Tie, and has helped 450+ home owners successfully find buyers and tenants for their properties since 2009.
As one of the senior leaders in the industry, Anthony is also a real estate trainer and speaker.
Being certified for ACTA and NLP Masters Practitioner, Anthony has successfully groomed and mentored many top million dollar producing agents.
In 2019 3rd Quarter, Anthony received the award for 2nd Top Recruiter in OrangeTee.
Throughout his career, Anthony has helped many clients grow their wealth through selecting great property investments and managing their portfolios actively through Property Wealth Planning.
In his spare time, he's obsessed with reading and Netflix. Occassionally, he indulges in rollerblading on the East Coast. Anthony can belt out a tune or two on the harmonica.