Apartment Locating is where its at.
If you watch the Bravo Network cable TV shows “Million Dollar Listing New York” or “Million Dollar Listing L.A.” you’d think being a residential real estate agent is both glamorous and a sure means of becoming rich real fast. Let’s face it, these agents live exciting lives, rubbing elbows with the rich and famous. It often looks like they spend more time at cocktail parties, surrounded by models, than they do listing and showing properties. Who wouldn’t want that?
The not so glamorous life of a residential real estate agent
They may call these “reality shows” but what they portray doesn’t have much to do with the reality of 99% of the residential agents working in Texas real estate today. The truth is that being a residential agent is a tough job. Its long hours without a steady salary. And in Texas, where distances are greater than in other states, there’s a lot time on the road for little return.
The real kicker is this is a commission-only job where an agent needs to be associated with a licensed broker in order to conduct business. For the privilege of being associated with, or “sponsored” by a broker, agents usually give their broker 50% of their commission. They call it a split. I’d call it robbery. That’s an amazing number if you think about it. It’s like a 50% tax. Even in the most Socialist countries in Europe, the government doesn’t take that much. Some folks have begun addressing them as “Comrade Broker.”
Being a residential agent is also becoming harder these days for other reasons. According to the National Association of Realtors (NAR), there’s currently a huge shortage of homes for sale. That, in turn, is driving up prices well above the inflation rate. Couple that with raising interest rates on home mortgages and the market for residential home sales isn't a pretty picture.
Renting is the new buying
While there may be no pilots on cable TV right now called “Million Dollar Apartment Locating Agent Dallas" or "Million Dollar Apartment Locating Agent Houston" there should be because this is where the action and money is today in Texas.
Here’s one of the reasons why. A recent study among Millennials shows their desire to purchase a home is below that of previous generations, particularly the Baby Boom generation. Many of Millennial’s first recollections of “real estate” wasn’t talk around the dinner table about how much their parent’s house was a big piggy bank, holding college tuition money for when they got older. The first mentions of real estate they recall were about what the 2008 real estate market meltdown was doing to their family and community. During that period, home values across the country declined by an average of 30%. Families lost their homes. Neighbors moved. It was pretty ugly. That wasn’t supposed to happen but it did and this new generation is wary about buying homes because of it. To many younger buyers, renting is the new buying.
Is Texas the New, New Jersey?
If you went into a bar or saloon in Texas and told the person next to you at the bar that Texas reminded you of New Jersey, they’d probably think you were either nuts, drunk or both. On the surface, the two states don’t seem to have much in common. It’s hard to imagine Tony Soprano saying "Howdy, you all". And I don’t see Willie Nelson eating a bagel at the Jersey Shore with Snooki.
What Texas and New Jersey do have in common, however, are high property tax rates. New Jersey ranks number one and Texas number three. Why that’s important is because with the passage of the “tax reform” bill by Congress, homeowners are now allowed to deduct only $10,000 of their local state and property taxes. Before, all state, local and property taxes were deductible. This is going to whack many homeowners right in the pocket big time because Texans deducted a whopping $14.8 billion in state, local and property taxes off their federal tax bill in 2015. That’s the fourth highest amount by a state in the U.S.
If you take the mortgage interest rate deduction cap with the new restrictions on deductions of state, local and property taxes together, this will effectively price many home buyers right out of the market. They will remain renters for quite a while.
Some potential home buyers are doing the math and have come to realize that buying a home vs. renting is always the smart financial thing to do. For example, if a family is planning on moving within a few years, buying makes no sense. Closing costs, agent commissions, and the fact that mortgages are front-loaded with interest payments – not principle payments – all mean that it is better for them to rent.
And there is no guarantee that home prices are always going to go up either. Just look back ten years in case you need a reminder. Renting is, for more and more people, the wise thing to do.
Being an apartment locating agent rocks
These emerging economic trends make being an apartment locator agent very appealing. With the highest employment rates seen in a generation, there are a lot of people who can afford to move to a nicer apartment, even if they can’t afford to buy a new house. That’s a large and affluent market that locator agents can exploit.
What’s also great about being an apartment locator agent is that you can do it part-time if you want. And there are brokers around that will sponsor you that won't take half your commission. For a flat monthly and a small transaction fee, agents can keep 100% of their commission.
You Keep the Money with Texas Locator Broker
For all these reasons, becoming an apartment locator agent is the way to go. The tricky part is finding a broker who is not going to take half your commission. Texas Locator Broker is a well know fixed-fee broker who has been in business since 2007. And in Texas, if you suck and don’t treat people right, you don’t stay in business for as long as Texas Locator Broker. Not only do agents keep 100% of their commission no matter how much that is, Texas Locator Broker has programs to ease new agents into the business.
And they provide all things an agent needs to be a success; work stations, Wi-Fi, copiers, training, business cards, everything. So get in touch with them and see if this is something for you. Who knows, maybe you can be the star of your own “Million Dollar Locator Broker Texas” show.
