So far I heard many stories about successful property agents who
makes lots of money.
There is this theory going on about being a property agent:
"Suppose you are very unlucky. You only manage to sell a 4 room hdb
flat that cost about $400 000 in 2 months. You make a 1% commission
which $4000 which means you still get to earn $2000 a month.
Compare to a office worker who work 5 days a week, 9 hours a day
and maybe don't veen earn $4000 in 2 months".
Is it really that easy to make money being a property agent?
Close 1 deal and the amount of commission you make is what a normal
office worker have to work for a few months to earn.
Are there any stories of unsuccessful proerty agents who maybe many
months or even many years still did not manage to close a single
deal and than they give up and go to start a normal job?
There are many hidden cost as a property agent that are not known
to the general public. It normally cause a false impression that an
agent can sell just one flat a month to survive.
Just a correction, when a property agent is serving a seller, the
standard recommended commission is 2%, not 1%. the 1% rate exists
because of novice agent hungry for business. The standard
commission when you serve a buyer would be 1%.
A typical 4 Room flat in SG is around SGD 250K - SGD 300K. Say a
property agent gets only 1% commission, the commission is around
$2.5K. The costs in selling a property involved are as follows.
- Advertising
- Transport
- Cost of Valuation
- Miscellaneous Cost
- Company Commission
- Salary to assistant(s) / Coordinator(s)
Depending on how long it takes you to sell the property, the cost
of selling can vary by quite a bit. Let's say it takes 1 month to
find a suitable buyer for the property, the cost of selling the
property should be close to around $600-$800. But if it drags on
till 3 months the cost of selling might increase to $1500-$2000. In
such a case, the commission involved in selling the house would not
be really worth it when you spread it over 3 months of work. On top
of that, you do not get the commission until the transaction is
complete which can be 3 months later. This sale would be worth the
effort if the commission is 2%, but definitely not when it is
1%.
Thus in this case, a FULL TIME property agent can never survive on
1 sale a month. This is a false assumption done by many people.
Another issue is that most newly joined property agents do not make
it beyond 3 months. This is because they normally would not get
paid till 3 months later and during this period of none
payment survivability is the problem. And since they
never make it to beyond 3 months, they are relatively unknown.
In the first year of working as a property agent, there is a lot
of hard-work behind the scenes which is relatively
unknown to many. The building up of the network, the distribution
of flyers by yourself to save costs, and the long hours. Yes the
long hours, if you are having short hours in the first year, there
is something wrong because it means you are not having enough
appointments or is not working hard enough. I know of a lady
property agent who goes to factories in Tuas at 3a.m. in the
morning so that she can canvass for rental tenants during their
break time when these workers have time to talk to you. That's
hardwork.
