- The Washington Times - Friday, September 5, 2008

When Carter Knapp greets a class of recently licensed real estate agents, he often asks, “How many of you have been told it’s a stupid idea - or at least terrible timing - to become a real estate agent right now?” Mr. Knapp says every person in the room raises his or her hand.

Mr. Knapp is vice president of education at Coldwell Banker Residential Brokerage for the Mid-Atlantic Region, and he thinks this may be the most promising thing about these new agents: “Despite the gloom and doom about real estate, these people have decided they want to be in it anyway.” Mr. Knapp tells these new sales professionals what they may already know: The current market offers plenty of opportunity for buyers and can even be a good opportunity for sellers who want to move up if they have owned a home long enough for it to appreciate in value.

While Mr. Knapp says the real estate prelicensing classes offered by Coldwell Banker have fewer students this year than in the past, evidence suggests that the number of real estate agents in the Washington metropolitan area is staying steady or dropping only minimally.

Greater Capital Area Association of Realtors (GCAAR) 2008 President Dennis Melby, a broker with Long & Foster Real Estate Inc. in Bethesda, says, “We have about 10,000 members in our association, and we have seen a small decline overall in the past year or two. However, we are adding about 75 new members every month.” GCAAR includes Realtors in the District and Montgomery County.

Anne Gardner, vice president of education and business specialties for the Northern Virginia Association of Realtors (NVAR), says its membership is increasing slightly.

“There’s certainly no real exodus from real estate,” Ms. Gardner says. “Licensing cycles last for two years, so people leaving now would have been either newly licensed or renewed their license in 2006. We had a large influx of new agents in 2004-2005, with a slower pace for the past two years.” Ms. Gardner says there is a “healthy number” of students in the prelicensing classes given by NVAR, with no drop-off since last year.

In the District, Maryland and Virginia, real estate agents are required to attend 60 hours of prelicensing classes and pass a test to earn a real estate license. Classes are offered by the local Realtor associations and by individual real estate companies with varying prices. Classes are offered with both daytime and evening sessions, so it is possible to take the required sessions within as little as two weeks.

“It can cost under $400 to get a professional license and be on the way to earning a potentially high income,” says Bill Spadea, executive recruiter for Weichert, Realtors in the Washington area. “This price point certainly encourages people to get into real estate. You don’t have to take out a second mortgage to get into this career the way you would if you want to get a graduate degree or go to law school.” Mr. Spadea says the major “expenses” associated with getting into real estate are “energy, enthusiasm and the time commitment.” In addition to the cost of the classes and the test, new real estate agents must be prepared to spend money on fees to join the Realtor association and to gain access to the local multiple listing service - Metropolitan Regional Information Systems Inc. (MRIS) in the D.C. area - and the normal costs of starting a new business, such as ordering business cards and starting a Web site.

“Generally, from zero to business cards, it costs between $1,500 and $2,000 to get set up as a Realtor,” Ms. Gardner says.

Mr. Knapp says that while the cost of becoming a Realtor has stayed the same in recent years, the profession itself has changed in some ways.

“Today, you need to work well with technology to be successful in real estate,” Mr. Knapp says. “Once someone gets a license, the larger real estate companies and local associations provide additional training in technology and how to be a consultant and educate buyers and sellers.” All licensed agents must take continuing education credits to keep their license.

Mr. Spadea says Weichert has generally positive numbers of students in its real estate school, although not at the record numbers seen at the height of the real estate market a few years ago.

“The reality is that local markets, not national trends, are what matter to a real estate agent,” Mr. Spadea says.

Koki Adasi-Efuya, a Realtor with Long & Foster Real Estate in Rockville, became an agent at the end of 2005, just as the market was beginning to decline.

“I thought it was a good time to become an agent and learn the business when it was a little slower,” Mr. Adasi-Efuya says. “It took me 11 months from the time I got my license until I sold my first home. For the first six months, I kept my old job, and then for five months I went right through all my savings. But now I have lots of experience and have been successful.”

Mr. Adasi-Efuya recommends that new agents have savings in the bank and be ready to spend some initial capital to get into the business. After less than three years as a Realtor, Mr. Adasi-Efuya was recognized this year by the National Association of Realtors’ Realtor Magazine as one of the “Top 30 under 30” agents in the country.

“I think real estate has a major appeal for young people because of the flexibility of running your own business,” Mr. Adasi-Efuya says. “There’s a great potential for earning a lot of money, and yet you are not being micromanaged.” Mr. Knapp says he is seeing a trend of more younger people entering real estate than in the past, especially people in their late 20s and early 30s.

“Real estate is appealing to this age group because they want their independence and they don’t want to be part of a corporate environment,” Mr. Knapp says. “It’s also appealing because of technology. Young people are very comfortable with technology, and these days, 80 percent of people are using the Internet for a home search. Young people are very good at communicating through e-mail, blogs, instant messaging and more, and this will be a growing trend in the business.”

“A lot more agents are coming into the business as a first career, when it used to be a second or third career for most new agents,” Mr. Melby says. “One thing that helps is that a lot of brokers have mentor programs, so it is easier to ramp up to getting into the business. Also, I think real estate has a much better image as a profession than it did in the past, thanks to the professionalism of Realtors and to the education campaign of NAR.”

Mr. Spadea says Weichert is seeing more interest than in the past from recent college graduates and first-time job seekers who want to avoid the “corporate grind.” “Young people looking for something creative and yet with the classic American entrepreneurial spirit are getting into real estate,” Mr. Spadea says.

He says many of the people traditionally attracted to real estate are continuing to enter the profession.

“Corporate executives who want to leave the corporate world find that this is one of the few professions that allows you to get a serious credential in a short amount of time,” Mr. Spadea says. “Real estate also offers the positive experience of helping people who want to buy or sell real estate.”

Shelly Murray, 2008 secretary of GCAAR and manager of Weichert, Realtors in Germantown, says she became a Realtor after being laid off.

“Real estate can be a great thing to get into for people who have been laid off because they often have severance pay which can carry them during the ramp-up phase of selling real estate,” Ms. Murray says. “I wanted to make a lifestyle change and became a full-time agent within weeks of being laid off.”

Ms. Murray says a number of GCAAR’s new members are transitioning into real estate from other fields, some of them continuing to work for six months at their previous job while working part-time as a Realtor, then going full time in the new field.

“We see a lot of people from the ‘caring professions,’ such as nurses and teachers, who look at selling real estate as a new way to care for clients,” Mr. Spadea says. “We also see some retirees looking for a second career, especially if they have been downsized and were not necessarily ready to retire.”

Ms. Gardner says a wider cross-section of people is entering real estate today.

“In the past, the typical new licensee was someone in their second career, in this area, quite often we saw retired federal government or military employees,” she says. “Now we see more young people, some people looking to supplement their income and some retirees.”

Mr. Spadea says another group attracted by real estate includes women and men who are re-entering the job force after staying home to raise children, since the profession offers a relatively easy entry into the business world.

New real estate agents continue to be split between full-time and part-time agents, although the trend generally seems to be for agents to work full-time in order to be financially successful as a sales professional. Some real estate companies will only hire full-time agents, Mr. Melby says.

Mr. Spadea says becoming a “spare-time” rather than a “part-time” agent is an option for some people.

“You can become a ‘referral agent,’ which requires a license and can be a career coinciding with another career,” Mr. Spadea says. “Referral agents can earn extra money by referring friends and family to full-time agents.”

Ms. Gardner says the stable number of people becoming real estate agents points to the increasing professionalism of the business.

“The fact that people are choosing to enter the field at this time shows us that they have put together a business plan and thought about how they can make money in real estate,” Ms. Gardner says. “The expectation is that the market will change in Northern Virginia. There are lots of first-time buyers out there with pent-up demand, and there is plenty of housing available, so the challenge will be for agents to meet in the middle and put these sellers and buyers together.”

Mr. Knapp says despite the negative reports about real estate, more than 5.6 million homes were sold across the country in 2007, making it the fifth best year in history for the number of homes sold.

“New Realtors see that the change in the real estate market is coming and this is a great time to get trained and get into it,” Mr. Spadea says. “Homes are becoming more affordable, it’s a great market for first-time home buyers, money is still available for mortgages and the interest rates are low. Realistically, all of these factors will drive growth again in the future.”

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