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7.1.18

So You Want to Make a Quick Buck in Real Estate, Do You?

We are officially in the throes of the looking season, and I don’t mean the spotting of semi-inappropriate summer wear or rare songbirds. No, the renters are here and many of them are ogling what one friend affectionately calls real estate porn. There are showings and stagings, open houses and property walkabouts. If you’re in the real estate biz, this is high season, baby.

But does that mean it’s the season of easy money for realtors? In 2017, there were 581 total sales and 94 firms that subscribed to LINK, the Island’s multiple listing service. Even adjusting for rising prices, those numbers beg the question: how do all these agents survive when it seems that every other person on the Vineyard has or is getting a real estate license?

“We’re in a peak market right now,” notes Courtney Marek, the co-owner and president of Sandpiper Realty, Inc. “And that means people are either going to get their licenses or resurface and become active again.”

“When the market is stronger, as it is now, I’m sure more people are going to get into it,” echoes Abby Rabinovitz, co-owner of Tea Lane Associates, an independent firm with fifty years on Island. “But it’s also possible that the market can support more people now than it could in 2011 when things were tight.”

Agents say they first notice the newbies at open houses that fellow agents host to showcase a new listing. Some agents, who chose not be quoted here – mainly because it is, after all, a small island – say it’s happening this season. As one griped recently, “I walk in now and I don’t know half the people in the room.”

More than half, it’s safe to say, aren’t making a killing. “Until you do the job you think this is an easy way to make money,” says Judy Federowicz, owner of Coldwell Banker Landmarks Real Estate. “But you quickly see how competitive it is, how seasonal the market is, and how much time there often is between sales.”

In particular, those high-end sales with their tantalizing-sounding commissions can take seemingly forever. “These are people buying their second homes, and for them it’s not a need; it’s a want, a desire,” she says. “Their parameters are totally different [than for a primary residence] and they can literally look forever. I like to say I get to know these families so well I even get to meet the second dog.”

“I can’t say strongly enough how wrong people are when they say this is an easy business,” adds Rabinovitz. “I think having boundaries and actually stopping working is extremely difficult in real estate, because you have to be there when people want you. You have to understand, when you work on a commission there’s a lot of work you don’t get paid for. You just have to slog away and be prepared for that. And you can work on a transaction for months that just falls apart.”

Property finally closed? Great, but now the commission that buyers and sellers quietly resent gets cut and cut again. In almost all cases, both the buyer and seller have separate agents or brokers. That means a standard 6 percent commission – a figure that is often negotiated downward at the front end – is split fifty-fifty. Each agent’s firm then takes 50 percent of that, leaving an individual agent with roughly a quarter of the commission. And while the occasional mega-sale grabs headlines, 64 percent of the sales last year were less than $1 million.

What’s more, that one-quarter commission, industry people say, also covers required ongoing education, marketing, expenses, and time. Deb Blair, president of LINK, the multiple listing service that also covers Boston and Nantucket, actually worries that young people aren’t getting into the business because every agent is an independent contractor. That means there are usually no medical benefits, no paid
vacation time, and a few or several lean years before the professional investment pays off. The successful agents, she says, are generally those who have been in the business for more than five years.

That commitment to stick it out through lean times, most say, is necessary to actually turn a fascination with HGTV into a career. It’s a unique professional opportunity on the Island, says Marek, but it’s also become complicated. Buyers and sellers are more involved, conduct their own independent research, compare services, and generally expect more from an agent. 

“There are layers and layers of regulations and permitting that vary from town to town, and that takes time and effort and experience to wade through,” Marek says. “I can say that there is never a transaction or a situation where you list the house, hold an open house, and show up to closing and get a big fat check. And if that does happen, something is probably wrong.”

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