Real Estate Investing

A brilliant, funny, dynamic, amazing agent left our company several months ago.  Amy had earned her broker’s license, so was offered the opportunity to be the managing broker of her own office funded by outside investors.  Her business had dropped significantly while at my company - largely due to the sickly housing market - and she needed to find a stable source of income for her family.  Some investors offered her a broker position so she was paid a regular salary on top of the commissions she earned as a result of her sales.

Amy just stopped by for a visit and I bombarded her with questions about starting a new company.  My cup must be half empty today because I asked her if this is a BAD time to open a new office rather than whether it’s a good time.  Her answer surprised me,

“It’s not as risky now because business is slower, so there’s less to lose.  And I did ask myself, ‘What have I got to lose?  Why not?’”

Amy further explained that the challenge wasn’t in taking the risk, it’s getting a real estate approved office space before you can open.  She said it was difficult to get the letter from zoning saying it’s okay to have office in that location.  Then once you have that, you have to take care of everything including:  signage, obtaining a business license, have your insurance in place, ordering a phone, internet, and all your basic requirements needed to run a business.  And then you have to get furniture!!

Hoo Boy Online gives some tips about opening your own office,

Rent and start up equipment are required if you decide to open your own real estate office, and business education real estate grants can help with this. The cost of starting a new business may be more costly than you originally imagined. Starting your own agency is possible once you have been licensed. Providing you have enough money to tide through the start up phase, you will be able to concentrate on selling real estate and building a successful business that will continue to grow.

A common misconception is that you can get your real estate license and immediately open your own company.  In Tennessee that’s not true.  You must be an affiliate broker - similar to an apprentice-type situation - for a minimum of three years before taking classes and testing to be a managing broker.  You also have to earn many hours of continuing education (I believe it’s a minimum of 120 hours).  I’ve heard the state test if pretty daunting, but have never struck out on my own to conquer it.

There is some online information available about starting your own real estate brokerage firm, including this from Realtor.com.  But we’d be very interested if any readers have done this and can share their own experiences!

Photo from Luxury Home Digest.

Several entries ago, I tried to highlight what happens in the three weeks before a buyer, seller, and Realtor reach the closing on a home.  Lynnae over at beingfrugal.net has written a couple of brilliant posts about every step she has taken in her quest to buy a new home.

In late July, she described how she found a home online, then proceeded through the purchase process.  Read the whole post because Lynnae most definitely demonstrates what can go wrong, what can go right, and what it’s like to live through the process.

This last month has definitely been full of ups and downs.  Barring any delays with our loan, we should be able to close by mid-August, and we might be able to get moved in before school starts.  That’s the goal, but it’s an optimistic goal.

When I first told you we were buying a house, I was hopeful that everything would work out, but I was far from convinced.  At this point in the process, I’m pretty sure everything is going to work out, and I’m more nervous about the timeline in regards to school than anything else.

Today, Lynnae continued her saga - still no closing but it’s coming.

The name of this game seems to be hurry up and wait. In reality, we will probably close Monday morning.  Our realtor is going to see if the sellers would be willing to give up the three days they have after closing to move out.  If they do, we’ll get keys Monday morning.  If not, we’ll have keys by Thursday at the latest.

I’m nervous for her that she’s giving the sellers time to move out after closing.  But more often than not, this works out okay.

Interestingly, many commenters wrote about how odd it was that the buyer could close in just 60 days.  WHAT?  Where I am, it’s highly unusual to close in more than 45 days.  Typically we close in Middle Tennessee in 30 days.  Also, the title companies must have an attorney on staff to approve the paperwork and keep the process moving (along with the Realtors and mortgage company).

One commenter sums it all up,

I work in real estate and this is actually very common, it can be a hurry up and wait. Even with an attorney (which is common practice in my area), you have next to little control over the title company and the mortgage company and how they roll out documents. Closing in less than 60 days is great in this market. Usually the lenders ask tons of questions and want tons of documentation and the process gets delayed because of that.