Real estate jobs are hot, too

Record sales stir interest of people laid off in slump

Classes for licenses are full

Profession may look easy but is quite demanding

January 05, 2003|By Trif Alatzas | Trif Alatzas,SUN REAL ESTATE EDITOR

A growing number of job seekers are turning to real estate sales in Maryland and across the country as layoffs and slowdowns in other industries have pushed some to take advantage of the hot housing market.

Maryland and Baltimore industry groups said their memberships have grown during the past few years. Real estate school teachers said classes are full. And members of the Maryland Real Estate Commission said a growing number of people are taking the state's licensing test.

Experts said it's a combination of a hot market, job losses in other fields and the allure of the flexible hours and the independence of selling real estate.

"We've sort of known this was happening," said Steven VanGrack, chairman of the Maryland Real Estate Commission, who pointed out that sales of new and existing homes are expected to break records in 2002 after achieving all-time highs one year earlier. Final figures for last year are expected this month. "It has turned out to be one of the few financially successful areas in any industry."

But most agents point out that few newcomers make a steady salary right away. Fixed salaries, annual raises and steady office hours are rare. And while new agents said the money is there to be made, it takes years to establish the network of contacts and earn a consistent salary.

The National Association of Realtors said the average Realtor earned $47,700 a year in 2000. But the group also found that an agent with 11 to 15 years of experience earns about $41,000 more a year than a colleague with one to five years in the profession.

"Real estate is one of those professions that looks a lot easier on the outside than it really is," said Jody Landers, executive vice president of the Greater Baltimore Board of Realtors.

Members of the Maryland Real Estate Commission said the business is cyclical, and they noticed a drastic decline in the number of agents beginning in the late 1980s and early '90s when the housing market began to weaken and more stringent licensing requirements were put in place.

In 1990, Maryland had more than 51,000 licensed agents and brokers. By 2000, the number fell to little more than 30,000. At the end of 2002, Maryland had almost 35,000. And more are expected.

In 1999, about 6,000 people took the state's licensing exam. In the state's last fiscal year that ended in June, almost 12,000 took the test. For the year, the average first-time passing rates were almost 73 percent for brokers compared with almost 59 percent for sales agents.

The Maryland Association of Realtors said its membership is up 3,000 people to almost 20,000 since 2000. And the National Association of Realtors said its numbers are up about 111,000 to 878,000 agents and brokers during the past two years.

Some economists predict that the housing market will cool this year because mortgage interest rates are expected to rise slightly. That could be poor timing for some new agents, a labor analyst said.

"If that happens just as a bunch of new people try to join the market as real estate agents, they may not be as successful as they hope," said Scott Hoyt, director of consumer economics for Economy.com, which is based in West Chester, Pa. "They may be entering a market that may be slowing."

Breaking into the business can be difficult. For example, real estate experts estimate that up to 30 percent of new agents will not renew their licenses after the first year. That compares with the 93 percent who will stick with the career after they've been in the business for at least five years.

"People get into it and they find out it's more difficult than they thought," said Landers of the Greater Baltimore group.

The National Association of Realtors said the typical agent is a 52-year-old married female, works 43 hours a week and has been in the business for 13 years.

Typically, agents will spend about $1,500 to get started in the business with fees, courses and marketing costs. Some make about 1.5 percent of the sale of a home in commission, and that money is not paid until after the house goes to settlement.

Some new agents said they have gone up to six months before ever seeing money from a sale.

Eric Figurelle, 33, was laid off from a sales job with an Internet company last year.

He went on scores of interviews at other companies but couldn't find the right fit. He decided to give real estate a look, thinking that if it didn't work out he could dabble in the profession on a part-time basis.

Figurelle, of Baltimore, became a Realtor with Long & Foster last January. He started out by taking every call and showing any house that a customer wanted to see. He answered telephones at his sales office and fielded cold calls from potential customers about prices, homes and availability.

He worked mornings, nights and weekends and posted $5 million in sales during his first year, and is one of the company's top rookies in Baltimore.

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