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Looking for a Career in Real Estate? How to Start
Dear Ms. Lank: Since assisting my sister with the sale of her house, I find the idea of selling homes and preparing homes for sale interesting. I contacted the state and got a list of locations with classes on real estate sales and broker licensing.
I am also interested in estate sales and the process of staging and cleaning homes. I suspect identifying and working with people who already do this type of work would be a good way to get involved.
Any advice you have for a retired person looking for a second career would be appreciated. Your column is always interesting and understandable. A couple weeks ago, I came across your blog, which is entertaining and inspirational. -- G. G.
Answer: For someone who finds real estate sales interesting, brokerage can indeed be an exciting second career. I'm not sure what state you're writing from, so I can't be specific about requirements. But to start, you need to take a salesperson licensing course and pass a state examination. Because important decisions and large sums of money will be involved, you will then start as an apprentice to a sponsoring broker, who will be legally responsible for your actions. You'll receive practical training from the company you join.
There's no one profile for a successful agent, but it helps if you have certain traits.
You need to be a self-starter. Eventually, you'll be working on your own. You'll set your own hours and choose your own goals.
You need be flexible. Every day is different, and your income may be irregular. Some days, you'll be free to sleep in; some weekends, you'll be completely involved with out-of-town buyers.
Most importantly -- and it sounds as if you'll be fine with this one -- you must enjoy what you're doing. Some workers watch the clock and count the years till retirement. People who find they aren't enjoying real estate almost always quit and go do something else.
Many people think selling real estate consists of finding someone who wants to buy a property, but that's just the tip of the iceberg. You'll advise sellers on market value, analyze buyers' financial ability, help negotiate sales agreements, guide financing and serve as liaison with inspectors, attorneys, lenders and title companies. You'll monitor paperwork and help solve problems all the way to final transfer of title.
Sign up for that salesperson course. At the same time, start investigating various firms so you can find a sponsoring broker for licensing. Drive around neighborhoods that interest you; read ads; and call for interviews with several companies that are active in those areas.
Don't be afraid to ask questions. The decision to affiliate works both ways: The broker will take valuable time to train you, and you will be investing your time and energy.
Most beginning salespersons work as independent contractors rather than employees, so you aren't likely to be offered a salary, health insurance, income-tax withholding or paid vacation. You'll probably be offered a "split" -- perhaps, as a beginner, half of the commissions you bring in.
There's something to be said for joining a large franchised office, but some salespersons enjoy working with small independent firms. Try to find an office and an initial training environment that suits your pace. It may be a formal classroom; it may be one-on-one with an experienced broker.
It'll be a fascinating adventure!
(My blog is called "86 and Holding." It doesn't have anything to do with real estate, and I'm no longer 86 years old, but I'm pleased G. G. found it.)
This Year or Next?
Ms. Lank: My husband and I purchased a house in another state at the end of 2016. We plan to move into the house January 2018. We currently have some very nice tenants.
The house needs work: New windows, plumbing, air conditioning and a new water heater are the most critical repairs at this time. Would it benefit us tax-wise to make these repairs now, while the property is a rental? Or would it serve us better to wait until we are living in the home? -- W. L.
Answer: The cost of repairs to a rental property can be deducted from rental income. For repairs that are considered permanent, though, a bookkeeping system known as depreciation spreads the cost over a period of years, and one year's deduction would be relatively small.
Repairs are not deductible once a property is your own residence. What you spend on permanent improvements can be added to your cost basis. That wouldn't matter until you sold it someday. In any event, if you've used the homesellers tax exclusion at any point, there might not be any capital gains tax.
Contact Edith Lank at www.askedith.com, at firstname.lastname@example.org or at 240 Hemingway Drive, Rochester NY 14620.
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