If you are young and ambitious, and have good social skills, the real estate is your thing. The possibility of earning over a million in a year even if you have not studied 5 or 7 years to acquire high academic degree is a wonderful thing. However, everything is not always favorable. According to the latest report from the Council for Estate Agencies (CEA), in the last one year more than 3,000 property agents have quit and just about 140 real estate agencies have shut down. The reason for this is pointed at the downturn in the property market.
Based on the interviews with several experts on the topic “whether real estate is still an appealing career” here is the gist of what the experts said. This might help those who are considering joining the real estate industry.
Jeff Foo, President, Institute of Estate Agents, Singapore
In my opinion, real estate agencies will continue to attract people to join their companies. This will intensify in September and October during the registration renewal.
Technology is something that is my personal concern because it seriously affects the real estate market. The real estate profession requires personalized services, it still appeals to many people, many people are willing to build career in the real estate market.
These days consumers are more knowledgeable and more savvy, they have access to the Internet and they get information easily through property websites, therefore, necessity of talking to a property agents and the agencies will be less. They will have to take service from agencies and agents only when they require experts’ advice.
Since there is a sharp decline on property transactions and drop in the property price, at this moment property market is sagging, which has created an adverse effect on the income of property agents. Interestingly, property agents have high price to pay to stay in the business. They will have to pay renewal fees and professional indemnity insurance. They will also have to pay fees for portal subscription, spend substantially in advertisements and professional development courses.
Eric Tng, Division Director, ERA
Whether you are buying or selling, you need a help from a Real Estate Salesperson (RES). If you are buying/selling property currently, you need service from RES, if you will be buying/selling property in the future, you will still need RES. You cannot do without a middleman in the real estate which is popularly called Real Estate Salesperson in Singapore. With the IT age, many predict that we will be redundant in the near future. I just don't see it happening. You don't buy a property just by looking at pictures/videos online. There are a lot more emotions and considerations in such a major decision.
The CEA is making the real estate industry clean. However, to gain respect as RES professional from the public it will take at least 5 years. I always believe that the real estate agent is a full time job and not a part-time vocation for extra bucks. At present, there are many part-timers in real estate business. We are dealing with the projects that worth couple of thousand to millions. It is not fair when the part time RES is finalizing the deal that involves big money.
In fact, RES is as a real professional, he/she should have ability to give good advice on property investments, help to maximize return on investment, manage clients' properties. Furthermore, RES should also be accustomed with overseas property markets as lots of people are investing in foreign countries.
If you are among the top 10 percent, you can quite easily earn $1 million as commission every year. I think your running costs including transportation, staff salary, advertisements, marketing etc. will be around 20-30 percent. You will earn most of the commission from estate sales. You will also earn from rental deals, referral fees from bank if the client gets loans, and management fees by running a team of RES.
The business is tough, thus, the top agents slow down after 3-4 years. The agents have to work every day (no weekend holiday) and up to 12 hours every day. It is obvious that they burn down. Just in 3-4 years, the top producers will make enough money which they invest in various passive income generating projects or switch into the managerial role. There are also some people, in a very small percentage, who take a few years break and reach to the top position when they are back.
An average full-time RES should be making a five-digit income monthly, if this is not met, they should be working as an employee. Basically, the real estate career is appropriate for those who can work independently and have an entrepreneur mindset.
Ong Kah Seng, Director, R'ST Research
Since the property market has cooled down, agencies are cautiously hiring the agents. Likewise, the buyers are also very cautious when it comes to select a house. Tenants, on the other hand, are also price-sensitive and selective. In 2014 and 2015, a very large number of private homes were built and many houses have completed in 2016, therefore the buyers have many choices. Still, the real estate agencies are looking for agents who have experience with various kinds of services given to the property buyers, property owners and tenants.
Interestingly, many agencies and agents have positive views on slacked down market. They believe that this is the indication for agents and agencies to buckle up, improve working standard, and be prepared to offer quality service. Those who have positive views on the current market are also inviting newbie, asking them to attend trainings and take necessary steps to work on the recovery. When the market is at the swing, all will be busy with the dealings, thus the slug period is the right time to enrich with necessary knowledge and skills. The lull period is the right time for the agencies to rework on operational and marketing strategies. Thus, numerous agencies are actually making good use of this lull-period.
The bad time for property market will one day be over. Until then the agents and agencies can spend time to build up their own contacts, improve their skills and performance, and demonstrate their personalized services to the clients. By doing this, they will work in full potential when the market indicators begins to improve.
In my opinion, the real estate career will continue to remain attractive; however, this will happen only when the tough times passes, which will be perhaps in 2017. Those who are working hard during this lull period will make good gains when the market begins to improve.Remember, only the fittest will survive.