I'm working as an agent for a real estate company.I also have my broker license because i would like to open my own company. I am now afraid to start because of the so called bubble burst. If you were in my shoes what would you do? Please no comments,helpful answers only!

During and after a bubble burst, people still buy and sell homes, just for less money than before.

Oh and of course immediatly after the bubble bursts there will be way less buyers and sellers.

There is an argument in business to start when things are bad, budget for it, and figure things will only get better.

the bubble already burst in Michigan. Worst economy in the USA and worst market in the state. I opened in June. ARGH!!!! Plenty of sellers trying to get out from the high LTV refi they did in the past few years. Buyers know it is a buyres market and offer $20k under value because they figure they should get a great deal.

Sellers get ticked and frustrated. AVERAGE days on market is OVER 100 and six month listings are the NORM. Only about 35-40% of the houses sell. Most expire! It is a nightmare scenario. It can only get better. I tell myself that daily! Luckily we also do mortgages so that has provided some cushion.

well have you taken a ce course on "so you want to open your own brokerage?" we have one in ga.I don't know what state you are in.FYI brokerages have a failure rate as high as new agents in the industry,did you know that?Money wise you can have a team under a big company and make tons of money without keeping track off all your paperwork.This bubble thing is stupid there are flat and overinflated markets in some states but the whole re industry is not going to crash.How capitalized are you to start your own business.Actual business statistics derived from the census bereau show 80 percent of business fail the first year and 95 percent fail after 5 years and the number one reason is undercapitalization(not enough money to start up).Check david lareah chief economist for nar on realtor.org he did a state by state evaluation on whether they were undervalued or overvalued market.For example in ga compared to the national average we are still considered a good buy as our median price is still 4 to 5 percent under what homes should be selling for.look at competition in your market.If you have 20 re offices around you it would be better to pick another area with less re companies were you could penetrate the market better.good luck

I believe the worst time to be an agent is during the transitions.

The top and bottom of the concave curves are what hurt.

When people start dumping properties because they are totally upside down, BK's, trying to sell their properties because they missed the mark when the market topped out and now want to sell before they lose all their equity, panic selling....

this is when it is going to get very interesting and sort of depressing when you start seeing people lose their total life savings because they bought when they shouldn't have and now have to sell because of cut backs.

Agents/Brokers will be making money either way if you know how to play the market.

What do you hope to accomplish as a broker that you can't as an agent? Are you skilled at and enjoy management and paperwork and liability and bills and operations?

a 100% brokerage will give you alsmost all of the benefits of being yoru own shop without all of thet, and it'll cost you a hell of a lot less money and be less risk.

Have you built a team yet? Is it successful? Then maybe being a broker is the next step, but if you can't recruit and manage and motivate a team of salespeople underneath you...

Was that enough of a helpful answer and not the comment you wanted to avoid?

Being a broker is more of a headache than a smart business move for most. You have to be skilled in recruiting or training motivated agents. I agree with jflynn in that the first step would be to develop a highly successful team. IF that goes well, the next logical step would be to open a brokerage. If you cannot magnage a successful team, why start a brokerage?

First off, "The Bubble" is not a universal thing. It is regional. We haven't had 30-40% appreciation in Atlanta, so I am not worried about a bubble. If you are in one of the areas where appreciation has gotten out of hand, I think you should be concerned. If you are in a more "normal" market, you should be alright.

Just my 2 cents,

I think that the smartest route to go is to start your own brokerage and learn how to invest in real estate...not focusing on training agents beneath you. Focus on developing passive income streams (like owning RE) so you don't have to cheer and coach new college young grad Johnny to become a sales superstar.

When someone states that they want to start their own brokerage many respond that training and recruiting agents is tough work. Well, you don't necessarily have to hire sales agents. You can be a one man sales shop and being a broker + owning your own company will greatly reduce your costs and liability (no agents = less liability). Walter Sandford was a great example of this business model...he was the top producing broker in the country for quite some time and never hired a single sales agent (he hired licensed assistants to do specialized tasks such as telemarketing, placing advertisments, office mgmt, etc, so he could focus on selling).

Quite frankly, in comparison to the results that you can attain focusing in investing while being a broker, I believe it's a tremendous waste of time and resources to take on sales agents. You can't control/predict human behavior and you wind up investing time and energy in people that you don't know will ever close a single sale. And if they do turn out to become RE sales superstars, they go off on their own and you have to start from square one again...and more importantly, that person that you taught all your secrets to is now using those same tools to compete against you in the marketplace. What's the saying, "Loose lips sinks ships."

Take a look at the Forbes top 100 richest people list and notice all the people in that top 100 that accredit real estate as being their vehicle to great wealth. I believe real estate is the most, or in the top 3, common vehicle to that level of wealth.

Start your brokerage. Bootstrap your start. Buy a mixed use building to house your brokerage so that your space is subsidized by the other rents coming in from the other units and focus on developing passive, residual income streams stemming from real esate investments. Set your goal as building an empire that will change your family tree forever.

Hi ;
I'm a new agent in California. I am an avid stock market and easy chair financial analyst. If you look at real estate as anything other than a long range investment then you are not seeing real estate historically as "always" and in any market, the best investment around. Take a chart on the last 10 , 20, 30, years of real estate local and national and look at the chart. It is a diagonal line going straight up like ascent of a mountain. Sure there are small adjusted down jaggs along the way but a picture is worth a thousand words. Also, every person must have a roof over their head. It is the only thing I know that shelters, pays for college, retirment,is a savings account and a tax shelter, provides a "stepping up leverage into better investment, has huge equity gains within the cycle. has sentimental memories and will always give back much more in the end than was put into.

I wouldn't worry too much about the so-called bubble

all i have been hearing about since 1994 is the freaking bubble. I hope it pops just so i dont have to hear about it anymore.

I totally agree with Xenogenetic's approach to wealth building by means of starting a real estate brokerage. This is my road map also.

In addition to starting a husband-wife team brokerage for buying and managing our own investment properties, I would also manage other investor's rental properties. Along the way, I'd like become a home inspector, appraiser too.

If you can survive the bad times, you will flourish in the good times.

It's been touched on but I'll expand on it... in a buyer's market, learn how to invest. Long-term and creative investors make their fortunes in what everyone else calls "bad markets".

I know several investors personally who have made millions of dollars in the last few years in Michigan, just from the listings agents couldn't sell.

Michiganrookie, if I recalled you said the right price can sell any house. Help me understand this please... Are you saying that 60-65% of the houses on the market are incorrectly priced? What would you have to price it to get them sold?


Xeno, the brokers that I know that earn 250+ a year are independents doing their own investment with listing on the side.

There's more money when you can control the future of your business.

OTOH, if you goal is to list as many houses as possible stick to a brand like REMAX, RE EXECS or KW. Some of the top producers in the country are agents for REMAX.

Oh, yes, I agree wholeheartedly. Placing emphasis on learning how to invest as the number one priority when in brokerage and listing property, 2nd, is definitely the way to go. If you invest and stop acquiring property, you still enjoy residual income. If you're a sales superstar listing agent and stop doing sale, your income stops as well. Easy decision.

Think of it as a challenge and not a bad thing.Just makes the game mopre interesting.