My Adventure In Trying Out Real Estate

Real estate seems to be the career changer’s job of choice since 93% of real estate agents come from a previous career according to a book I read. It is easy to see why this is so since the barrier to entry is low in terms of the training required to get a real estate salesperson license. In the state of Washington, all that is required is to take one class about real estate fundamentals, pass the class exam, and then pass the state license exam which is comprised of two sections – one for federal and one for state. A high school diploma is not required. The test is not overly difficult and one can easily pass it if they prepare adequately. I found that rehearsing with practice tests helps a lot to solidify the knowledge and get higher scores in the practice tests.

If the barrier to obtaining a license is low, the barrier to success in the real estate sales profession is very high. The turn-over rate of real estate agents is high compared to other professions. According the National Association of Realtors (NAR), the turnover rate of licensees is 50%, which sounds a little low to me since I heard from an agent that only 5% of agents actually renew their license when it is due. It is a clear indication that new agents are not well prepared for a career in real estate sales as the training provided is not sufficient – in terms of sales training and real estate - and due to this reason, the expectations of newcomers are also off. This is the pitfall that I got into when I decided to get my license and joined a brokerage firm. To be honest, I didn’t realize what I was getting into and in some way I made myself blind to facts that I obtained through my own research. I know that I am interested in real estate, but I am not that much into sales per se. I read two books for new real estate agents, interviewed four agents who are active in their field, and watched training videos provided by my brokerage office. It was evident after all the research that prospecting and marketing is a predominant factor for success. I hesitated for a brief time as I had a bad feeling when I thought about meeting five new people every day and building my database of contacts as suggested by the RE/MAX training videos. :-) But I was able to swiftly push this feeling aside and look at the future hopeful and determined. As we are told to market to our sphere of influence, I ended up marketing to my friends.

Here are the things I learned:

Thick Skin
During that time, the first thing I learned was to develop a thick skin. In my situation, my rejection rate was high, perhaps around 80% at my own estimation. I reasoned that the primary reason of the high rejection was the perception people held of me. I was doing a drastic career switch from software testing to real estate sales. On top of that, I am a pretty much a shy and hesitant person with an aspiration of improving my people skills.:-) So it would be a natural consequence that my friends do not view me as a competent real estate professional that has the expertise to get them the best deal. In all honesty, the first rejections were a little hard to swallow although I was already warned about rejection through the books I read and interviews with other agents; however I adamantly chose to deny these warnings and felt confident that I could deal with it!

Perception and Image are Important
Plunging into the field of real estate and coming from a very different background where people wear jeans and t-shirts and do not worry about their image, I realized through people’s reactions and feedback how important it is in business of how you are perceived by others. I have to admit that it is difficult for me to look at myself from an objective standpoint, so I formed an idea of my external perception through two ways: people’s observation of me, and observing other sales professionals who share similar personality traits with me. My difficulty of attracting new clients is an indication of not projecting the right image. When I visualize the agents that I met who are dressed up, have a cheerful attitude, make contact with others easily, appear confident, and can do the talking, I also know that they are successful. On the other hand, visualize the agent who doesn’t talk much, doesn’t know the right things to say, doesn’t make eye contact, and is in general not easily approachable, and it is difficult to believe that they are successful.

People Skills
A salesperson with no people skills is as good as a piano with no tone. People skills are important in every field, even in non-sales professions - in jobs where people hide behind computers, we have to effectively communicate with our peers to work collaboratively, and negotiate our next promotion with our boss. But at least in these jobs, our income is not directly tied to our people skills, perhaps only the raise portion of it. But in sales jobs that are commission based, the salesperson who doesn’t sell has their survival at stake.

We Want a Sales Pitch
I worked with a close friend who was shopping for a house for several months. Towards the end of the house shopping period, we were at a condo conversion sales office and we were being shown the model condos by an attractive-looking and dressed up real estate sales professional. The real estate lady was also friendly and good at explaining the facts. After our visit ended, my close friend pointed out to me that this is the type of job that I should look for and that I should be as confident and professional as the sales lady. To be honest, I was actually surprised that this comment came out of my friend. In fact, my deer friend is a laid back person, values honesty, simplicity, and the natural things in life. She does not care much about bells and whistles. Even in her case, she was longing for a sales pitch and some degree of embellishment through external appearance and attitude.

Tough in Negotiations
A recent experience I had was with investors who are friends of mine who are looking to buy a house at bargain price to flip it. As I made the call to the listing agent in their presence, I politely asked a couple of questions and then hung up. My clients were very upset that I did not insist enough on getting more information from the agent and being tougher. We later submitted an offer and had to “play the game” as the agent was putting pressure on the premise that there is another offer that was at full price, which later he disclosed that it was not at full price. Go figure what is true and what is not. In the end, I think an agent with good negotiation skills is worth his/her commission.

Know Your Neighborhood
Last but not least, real estate agents should know the neighborhood pretty well to advise the clients on what to look out for. When I was working with my client, there were two instances when we both were faced with unanticipated facts. The first instance was when I advised her to view a rambler that was in a good location in Kirkland, but as soon as we arrived there, the traffic noise was very noticeable since the rambler was on a busy local road - I didn't live in the neighborhood in question and so I had no idea there was going to be high traffic noise. My client was disappointed that we had to drive all the way there to discover it. The second instance was a house in Canyon Park situated next to a gun range. We heard the gun shots on our second visit to the home since it was on a Sunday when the gun shots are heard. This one also could have been avoided by more familiarity with the neighborhood on my part. In general, clients do expect their agents to have neighborhood knowledge and save them the time to discover things on their own.

Conclusion
It was definitely one year of adventure for me. Because of my renegade nature I had to try real estate sales. I enjoyed the thrill of it with all the ups and downs. I have no regrets since I know a lot more about business, sales, and marketing now than I knew when I started (and by the way a lot more that what I learned in the MBA classes). And I also know a lot more about myself. I still admire the cheerful real estate agent out there who can make the connections with people! I know now that this is probably a rosy picture. What attracted me to this field was being outdoors and away from the office, :-) in addition to the ease of connecting with people. For the people skills part, I know now that I need to take baby steps towards a better version of me. For the outdoors part, I wonder if I can find a job that fulfills my desire to be outdoors!

Is Early Retirement a Good Idea?

Early retirement is not exactly the same as career change but it is linked to it. Many people take this route instead of career change under the belief that once they reach financial freedom, they can start living their best life and realize their dreams.

Well, at least this is one category of people. Personally, I don't agree with this view. Here is why.


In my opinion, striving for early retirement is an extreme approach to living life. This school of thought suggests that we should work hard during our prime years, save as much money as possible, live frugally, and work in high paying jobs to accelerate the early retirement. After this is achieved, we will be rewarded in the future by a large net worth made up of our savings accounts, retirement accounts, and assets. At this point, we can quit our job and reclaim our freedom. However, this means that during the working period of our lives, we must be working hard perhaps also clinging to high stress jobs that are high pay, putting our social life and well-being to a lower priority, and not rewarding ourselves enough with the things we want from life like vacations, material possessions, and more time with friends and family.

Even if we are willing to live an extreme lifestyle for the first part of our lives, will we reach happiness later in life? Happiness cannot be bought with money, it comes from within. Happiness is the combination of being healthy, having enough money to live a decent lifestyle to meet our needs, maintaining meaningful relationships with friends and family, and having a purpose in life. Now money is important to provide us with the things we need, but beyond that, it is of less value. But how do we determine what constitutes a "need"? Of course, this varies with each of us based on our values and background. Personally, I think a financial need is any need that is a basic need (like having a place to live, clothing, food, having access to a mode of transportation (like a car), having an education) or a useful need (basically an investment that is going to result in an improvement or financial return like taking classes, investing in a business, etc.) I believe that these needs can be met gradually through a balanced approach to living life.

Along the same lines, I believe that work is good and is in fact necessary for our well-being. In fact, as the statistics show that unemployment is the riskiest job to have. Jobs are not mere vehicles of making money, but they are ways to express ourselves through them, to reach our potential, and to make a difference at the end of the day. So why retire early? If we do not work as hard and slow down to smell the roses, our net worth will build up more slowly, but this is for the better. If we retire early and stay home while other people our age hold regular jobs and are being productive every day, how are we going to spend our time?

However, there may be some cases where early retirement can be benefitial. If a parent retires to take care of family obligations like raising children, or the case when one is as rich as Bill Gates and can spend their future career working on volunteer activities. Otherwise, it is not a path that I want to pursue, unless it happens by accident! :-)

All in all, this is my biased view of work and life :-) Maybe it's because I am more conventional, I like enjoying my time and accumulating material possessions gradually and not postponing everything until retirement :-) But I guess for other people who live their lives differently, early retirement might be an attractive option!

Should one go back to school to change careers?

I was asking myself lately whether it is worthwhile to go back to school in order to switch careers. While there are advatanges to starting over, it may not be suitable for all.

Evidently, the most prominent advantage of going back to school to study a new major is freedom. I get to choose a new field I'd like to go into, and as long as I graduate with a new degree, I have a chance at working in my dream job. For example I could study nursing or bio-chemistry, or anything that I find interesting. Once my new degree is in hand, I have a shot at working in the new field. However, this approach has some serious downsides in my opinion.

One of the downsides is aging. I'm in my early thirties now. I have been contemplating architecture since I like drawing and have a passion in construction. The only way for me to switch to architecture is to pursue a 3-year Professional Master of Architecture program. This would take me 4.5 years if you count the 1.5 year it will take me to apply to and enroll in the school. After graduation, it's the start of the rat race, i.e. competing with other fresh graduates who are in their early 20s to get internships and work as an intern for another 3 years at least. The internship is a required step in the architect's career path. The year count is now at 7.5 years and I haven't even started yet in my new career as an official architect. After the internship, only then can I start expecting good job offers or going solo, at which point I will be in my early 40's perhaps still competing with 20-somethings :-) who have a clear youth advantage fueling them with undoubtedly more energy and drive.

And guess what?... What if I made a mistake in picking architecture as a career? Ouch, that will be painful... For the 20+ year old, it's OK - they will just have to try something else. But what if it's the second or third college degree at a much older age? Well, this is what I call high risk! Of course, this means that career changers need to do a lot of research about their new field before making a career move to mitigate risk. I'm currently reading a book entitled "Becoming an Architect" by Lee Waldrep who himself found out that he was in the wrong career after getting his doctorate in architecture and starting his third month of work. I am still at the beginning of the book, so I will post about it more in the future.

Other than the time disadvantage, there is also the money issue. It can be very expensive to go back to school full-time. For example, tuition for many architecture schools is between $20,000 and $30,000 a year, unless if I go to a state university paying resident tuition which would be $11,000 a year more or less. Add to that the opportunity loss of not generating an income and it starts to look very pricey even with resident tuition. The question is will the return on investment be high enough to justify these expenses? Probably not financially, since it takes so much time before one can start working as a licensed architect and the income is not higher than other professions (median income in WA state is $65k according to the Bureau of Labor Statistics, I think people who have the median income probably map to the 5-10 year experience level.) Will it be rewarding on a personal level? Perhaps.

So the more I think about going back to school, and the less attractive the idea becomes.

Dependable Strengths

There is a variety of help out there for career changers between classes, books, career assessment tests, personality tests, and career counseling - none of which comes with a garantee of finding a new career but nevertheless could be helpful tools to support us in making more informed decisions in our job search. The most recent class that I took was offered by the UW Career Services Center in Seattle, WA. Here is the link:

University of Washington. Seattle, WA
Dependable Strengths Seminar
http://depts.washington.edu/careers/careerplan/depstrg.php

The Dependable Strengths model was developed by someone called Bernard Haldane originally to help military personnel to find jobs after they leave the military. Later on, this technique is now applied to all career changers. For more info, go to http://www.dependablestrengths.org.

The UW Career Services Center uses this model for their Dependable Strengths seminar. Basically, the idea is to list your good experiences (a good experience being an activity that you did well, you enjoyed doing, and that you were proud of). The strengths are then extracted from these good experiences and distilled into a list of top dependable strengths which are then used to write your own report (which is a brief version of a resume that focuses on your strengths and links them with the activities that you achieved). The idea then is to use this report for networking with people (friends and strangers) to get job ideas and referrals for new jobs.

Pros
* It was very helpful to work in groups. The class size was about 10-12 people and several exercises were done in subgroups of 4 people or 2 people. It was good to get other's people reassurance of what our strengths are and practice mock interviews.

* The other thumbs up was that we had a follow-up session one month later. This helped us get the structure to do the homework of networking in the one month timeframe. Most importantly, it helped us reconnect and form an informal support group. We ended up not meeting regularly because of the different locations we live in, but we exchanged email addresses and phone numbers for occasional communication.

Cons
* While the idea behind this seminar is good, I found that the hard part was the implementation. Therefore I think the class format is too short (it was a 2-day class when I took it). We did a networking exercise on the 2nd day when we went out to talk to people on campus and let them recommend job matches for us, which was a disaster for most of us. Of course the idea was to just practice but I still think it was too premature for us to do this. The class should have been offered instead as a quarter class spanning 10 weeks, so we have enough time to explore career ideas, get more assistance from the career counselors, and get assistance in searching for the next job.

The method of extracting strengths employed in this class is very similar to methods described in career change books. For example:

1) What Color is Your Parachute by Richard Nelson Bolles
http://www.amazon.com/What-Color-Your-Parachute-2007/dp/1580087949/ref=pd_ecc_rvi_1/002-5557587-5272008

The book has the same idea of listing the activities that you did well and enjoyed doing, and then extract from them the strengths that you utilized. This is done in the "flower exercise".

I read this book several years ago. Basically you get what you put into it. You should take the flower exercise seriously and make an effort to do it. But other than that, I don't remember anything else remarkable about this book.

2) Passion and Purpose by Marlys Hanson
http://www.amazon.com/Passion-Purpose-Identify-Leverage-Powerful/dp/0971721548/sr=1-1/qid=1170621289/ref=pd_bbs_sr_1/002-5557587-5272008?ie=UTF8&s=books

Along the same lines, "Passion and Purpose" also adopts a similar technique to help you list your strengths. However, the difference between this book and the "parachute" book is that this book employs a much more detailed process that guides you in listing your skills. The skills are organized into different categories, and by guiding you through each category and answering questions, you can build your list of strenghts based on your good experiences. So I liked the more detailed approach here. She calls this bundle of strengths the motivational pattern approximation, which sounds to me a very scientific term :-)

Also, what I liked in this book is the idea that each one of us is naturally inclined to do something. So if we observe what we are naturally motivated to do when we are not pressured to do anything in particular, then we will find where our talent and interests lie. And this is not dependent on having explored many things in life. Some people complain that they didn't have the chance to do many things in their life, and they feel trapped by the lack of life experience and use it as an excuse for not being able to discover their strengths. The author argues to the contrary and claims that even if we led simple and unsophisticated lives, our pattern will still show up. For example, if we are naturally inclined to keep things organized and tidy, we will be doing that at home or in the office no matter what circumstances life offers us.

What's Next in my Career

"What's next?" is the question I have been asking myself lately when contemplating a career change. This question can be easy or difficult depending on one's situation. In my circumstances, it is a difficult question to answer. Let me tell you why.

There are two categories of people. The first category comprises of people who know they don't like their current profession and it is clear to them what their strengths are. I've seen many co-workers/friends do this transition successfully. For example, there are software developers or testers who one day decide "this job is too technical for me and I don't get to interact enough with people." This is a typical statement. For this group of people, the notion of a job mismatch is as clear as the notion of what is missing in their jobs and how they are going to find a new job that allows them to use the skills that they want to make use of. And this doesn't apply only to the computer industry only but I am writing on this industry because this is what my experience is in.

As as illustration, consider Joe* who graduated with a degree in computer science and landed his first job as a software programmer for a software company. After a couple of years of diligently fulfilling his duty of being a good employee, he decides he wants to switch careers. Joe is an outgoing person, has leadership and a direct communication style. It is clear to his managers that he will be successful in a management role. So he moves to a program manager role in the same company.

The previous example demonstrates an easy and smooth transition because Joe can use this technical experience in his new role and is still with the same company. But for other people career change is not as straightforward. For those of us in this second category, we know what we don't want but we may not necessarily know what we want exactly either because we are not clear about the strengths that we possess, or we know our strengths but there is no job that exactly fits our needs and requirements.

In my case for example I am 50% right brain and 50% left brain. In addition, my level of attention to detail is perhaps higher than average, but not 10 over 10, perhaps 7-8 over 10. I currently work in software testing which requires a high level of problem solving/troubleshooting skills and attention to detail. Since I am 50/50 :-) I like to use a variety of skills that entail both analytical thinking as well as talking to people and writing. I think my strengths are my observation skills, organizational skills, and results-orientation.

To pinpoint what specific job would fulfill my desire of variety, I took numerous career tests, personality tests, career change classes, and met with different career counselors. One career counselor concluded after analysis of my strengths and requirements that there is no job that directly matches what I want because of too many requirements. Another career counselor suggested I should pursue real estate appraisal since I had already expressed interest in that and it fulfills the outdoors requirement.

Other than myself, I have friends and have met several people in the career classes who are also in the same boat. Some of us are trying to create a support network for each other.

By the way, here is a great website that has resources for career change:
http://www.careerjournal.com/jobhunting/change/

I like this article in particular: "When Changing Careers, First Try Some On for Size" by Eileen Gunn
http://www.careerjournal.com/jobhunting/change/20041102-gunn.html

I will post more of the career change resources on the blog over time.

In my next blog I will write about the career change classes that I took.

Notes:* First name has been changed for confidentiality.