Real Estate’s Low Barrier to Entry: A Burnout Trap?

[00:00:00] Speaker A: No prior real estate experience required. None. No mandatory apprenticeship before obtaining a salesperson license. You can literally pass your test and go access a contract and write a contract. So Even though it's 135 hours of coursework, which probably is too low anyways, it's not even actually 135 hours of coursework. That's how long they make you wait. Do new agents understand that they could work six months without earning a paycheck? [00:00:25] Speaker B: I think they understand that, but no one thinks it's going to happen to them. And the reality is they probably work much longer than that without a single paycheck. [00:00:32] Speaker A: Yeah, right now, I would say probably 9 to 12 months. If you're counting on that commission check, you're more likely to cut a corner, try to cover something up, try to desperately do something to make sure the deal closes that will ultimately end up biting you in the ass later and probably your client in a really big way. [00:00:49] Speaker B: There's also a lot of sketchy agents who do a really good job of masking their sketchiness and do well for themselves at the expense of their clients. [00:00:58] Speaker A: Welcome to AllView 360 All Things Real Estate podcast. With your hosts Daniel Gutierrez and Shannon Dempsey. We explore real estate from every angle, giving you insights, tools, and confidence to make smart decisions that support your future. It's time for a new perspective on property. Welcome to AllView360. Hello, Daniel. [00:01:18] Speaker B: Hi, Shannon. [00:01:19] Speaker A: Another AllView360 podcast and an exciting one [00:01:22] Speaker B: that we talk about quite often, but never in great detail. And it's finally time to dive in and talk about this. I think semi controversial, a very important topic. [00:01:37] Speaker A: Statistically, there's a lot of mental health, more mental health issues in the real estate industry than other industries. And separate. Not the same thing, mental health and addiction and alcoholism and all of that, but also higher in the real estate industry compared to other industries. [00:01:55] Speaker B: Well, not only that, but it would be interesting to see how much of that was present before getting into the real estate industry versus how much was caused by the real estate industry. [00:02:04] Speaker A: Yes. That's like when you dive in. Yeah. Why has it led to that? How much does it impact things just across the board? And going deeper on this, I'm like, wow, this is. There's way more to it than Realtors are crazy. Because that's not what we're saying. [00:02:18] Speaker B: Before we go into the nuances of that. This episode is about the barriers to entry to real estate. And is it too easy to get a real estate license? Are there too many people? [00:02:30] Speaker A: Yeah, I think that's the starting point. [00:02:31] Speaker B: Yeah. Are there too many people with licenses that really shouldn't be practicing real estate? [00:02:37] Speaker A: And does everyone with a real estate license that would fit into those sorts of statistics actually. Do they all actually practice real estate? [00:02:44] Speaker B: Yeah. [00:02:45] Speaker A: Yeah. So episode title, something along the lines of. Is the barrier of entry to real estate to low? [00:02:52] Speaker B: Yes, absolutely. [00:02:53] Speaker A: Way too low. Okay. So the reality behind the real estate lifestyle itself and what I think draws a lot of people to the industry in the first place, probably not what drew you to it, but one of [00:03:05] Speaker B: the things I see as a kind of issue in our society is reality tv. It's all the shows and people watching, you know, selling sunset, million dollar listing, all those things and thinking that it's real and how it is and that's what they're going to get into and that's what their life is going to be. But you see it across the board and people trying to be influencers. YouTub Whatever it is, it's not how it is on TV. [00:03:28] Speaker A: No. And I think the combination of reality TV and the way that it depicts the glamorous side of very rare real estate occasions, paired with the social media aspect of things, has really widened the gap of what real estate actually is and what it means to be a true professional working day in and day out in this industry. I think the initial draw, aside from the people that think that it is glamorous and easy and big paychecks and this and that, is the flexibility that comes along with it. As far as the scheduling goes, you can work as much and as hard as you want. You can work not at all. You know, that's kind of your choice. And there's potential to earn a lot of money. Right. And Brian Buffini always says there's no ceiling, but there also is no floor. So people don't talk about that part when they're recruiting and bringing people in. So whatever drew someone to the real estate industry if they didn't do, I mean, I don't even want to say if they didn't do proper research, but most likely the idea of what they had coming into the industry and then what it ends up being, especially in, especially in those first couple years, I would guess are very, very different. And then how does that resonate with people mentally? [00:04:39] Speaker B: A lot of people get a rude awakening and I mean, it's countless times that I've talked to new agents or agents after fears or people who even tried for fears and stopped and they, you know, they said something along the lines, it was going to be glamorous. I thought I was going to be closing deals. I thought I was going to, you know, clients were just going to fall into my lap. And none of that happened. And also to the expense of running your own real estate business as an agent. It's. [00:05:03] Speaker A: If you're doing it properly. [00:05:04] Speaker B: Yeah, if you're doing it properly, sure. [00:05:06] Speaker A: So we're talking about the mental health, the barrier to real estate, and then just kind of the mental health and addiction aspect of things that seem to be somewhat prevalent within the industry. Very separate, though, and I want to make that very clear. Mental health challenges and substance abuse disorders, not the same thing. And doesn't always impact professional competence. [00:05:27] Speaker B: And maybe touching a little bit on, do we think that this industry causes more mental health and addiction than other industries? [00:05:35] Speaker A: All of it. So the first stat I want to hit, on March 2026, there was an article that came out from Real Estate, the Real Estate Wellness Institute. They did a 3,400 surveyed agent study and it reported 64% of those 3,400 agents had significant symptoms of anxiety, burnout and depression. And two years prior it was 51%. So in this current market and what we've experienced the last few years, that number has. It was already high and then has increased. And then the se. Second stat, historical stat of substance Abuse and Mental Health Services administration found that 10% of workers in the real estate rental leasing industry experience some sort of substance abuse disorder. And that number has also increased. It's only at 10%. It used to be at 9.5. So 1 in 10 agents. [00:06:25] Speaker B: Yeah. And we've seen it before within with people that we know and worked with closely or even just friends. I have a agent that I highly respect who was telling me about how he started going through panic attacks because of his workload, feeling that his phone was vibrating. 24. 7 could have put it down. And it's crazy. I mean, I haven't gotten to that point yet, but I. I remember it was probably three years ago where I would imagine that my phone was ringing when it wasn't. Because that's just the volume of calls and the expectation, especially for someone like me who's a bit of a bit OCD and a perfectionist to always be available, always be able to answer, and then clients getting upset when you're not available. 24. 7 it really takes a toll on you. [00:07:09] Speaker A: It's not 24. 7 access to that individual, but when you're on the other side of it as the agent, chances are your Personality is somewhat of a people pleaser. You're hired, you want to serve. And so instead of having normal boundaries, you're available when they need you available. And that is once you know, you're dealing with 10, 15 clients at one time, it becomes constant, constant, constant. And it is not healthy. And I've worked hard to set boundaries and it's not easy. And so when the boundaries are not respected or understood, that's even more deflating. Because why would you not respect that? I am telling you basically from 6pm to 9pm I am having dinner with my family. And putting my daughter to bed like that, to me is a very realistic boundary. I am, you know, on my phone until I fall asleep. I'm working on weekends. Like I am so available to people. And to struggle to set that three hour a day window that I am not available should not be a struggle. [00:08:12] Speaker B: There's also some people who, and there's a lot that goes on on their side. Some people who are unrealistic, like completely unrealistic. Also some people who are just super stressed out because selling and buying is a very emotional process. And while the seller buyer goes through anywhere from what, 10 to, you know, 60 days on a transaction, of course, once we actually open the transaction, that's a sprint for them. But if the life of a realtor is non stop sprints, it's really just a marathon for running at full speed at all times. Yeah. [00:08:44] Speaker A: With no break. And then when you do take a mental break, I was texting you yesterday, like I made it a point to not schedule anything. And what's sad is I did that because it was supposed to be a big California storm when it drizzled rain for, you know, several hours and we all hunkered down. But I was like, okay, I can plan a chunk of time that I'm not doing anything. And then what my brain did during that time was not healthy. Like, it, it wasn't. I wasn't feeling depressed, but I was just feeling guilt. Like I couldn't turn it off. And I call it buzzing. I've used that term with you. Like I feel like I'm buzzing. And maybe that's a version of a panic attack, but just when so much is happening, you're just like buzzing, almost numb. You have to freeze. I can go on and on about myself, but why do you think we hear so little about mental health in the real estate world? [00:09:32] Speaker B: I don't think clients care. I think this is a very big transaction and people are going to say, you know, you get paid a lot to do this and this is what you signed up for and it is what it is. And something like a similar analogy or similar situation I see to this is NFL players with cte, you know, getting paid millions of dollars to ruin their brains and bodies. That I think is changing because we see the implications and impact to people's lives from that. But it hasn't, hasn't made its way to real estate or even kind of a lot of other industries. I know mental health and mental health awareness is larger than it's ever been and more prevalent. Still not larger though. Yeah. But within the real estate space, I think a lot of clients are like, I don't care. This is emotional for them. It's emotional for, for a lot of the parties and they want what they want when they want it. [00:10:26] Speaker A: And for me, so I'm not going to speak for anyone else, but for me, you want what you want when you want it. Knowing that I'm so available that most of the times you're going to get it. That's what makes it like I'm not a part time person that's paying attention. When I want to pay attention, I give it my all. Right. And so it becomes even that much more painful to not be able to take a couple hours. It's like, how much more can I give? Because I can't. I don't have much more to give. [00:10:53] Speaker B: Yeah. [00:10:54] Speaker A: And I go through versions of this as my business grows. Right. Like that's why I'm now partnered with God. When, you know, you add and you put systems in place, but the moments leading up to the break before the growth usually ends up with a mental component to it. [00:11:08] Speaker B: And on that component too. Sometimes the clients don't care and they just want you regardless. Yeah, I know. That's something that happens with me a lot. And over the weekend I got two call or calls from two different clients four different times. Early morning and late, late evening on the weekend for things that were not at all emergencies. And I was just call after call and it's like, what's going on? And for them it's like, oh no, I have something so you need to answer my voicemail. [00:11:34] Speaker A: Just. I don't. You probably hate it, but it, it says if you're calling before 6pm, I'm realtor Shannon. If you're calling after 6pm, I'm mom Shannon. I'll call you back tomorrow. That is probably a little too much. I have now realized that people might take, they might not value being a Mom as much as I do right now with my 6 year old, you know, like that kind of leaves too much room for interpretation. So I'm going to change it. This particular client who I had a one, he's a wonderful guy and I had a hour and 12 minute conversation with him afterwards about all of this this morning but he called at 8:40 and then he said oh like do you need to transition to Realtor Shannon? And I would have never been able to have that on my voicemail when I had a business and kind of going on and on about that. And I said I'm going to call you back because I had to breathe. And I got to the office and I called him and I said I'm. Before we start this conversation I need to let you know this is a hard boundary for me. I'm letting you know now 6pm I'm with my daughter and if of course if there's something crazy emergency, you know, I'm not going to lose a deal or not abide by a timeline with a contract because of this. But in general that is a hard boundary for me and if that doesn't work for you, you need to let me know now. And he, after talking about it actually had a lot of good advice and ended up going really well. But I was fully prepared for him to say I'm not comfortable with that. And I was very excited to say then that's, then this is where we part ways. [00:12:54] Speaker B: That was great of you. It's not an easy conversation but in order to have longevity in the industry and really any industry, you need to be able to do things like that and to answer or to respond to your previous comment, I don't mind your voicemail because amongst all of that I know, well I know that there's like a 247 availability for me. So yeah, I'm just gonna text you with whatever my random thoughts are. [00:13:17] Speaker A: That's a little different. You do wake up early though. [00:13:20] Speaker B: I try not to Text anyone before 9am unless it's like a contractor or something like that. For people that I know start working very early and it's just part of their work. But finding the send later feature on a text message was one of the greatest things that ever happened to me because I have like I wake up early. What is I wake up at 4:50 at the gym by 5:15, back home by 6:30, take my dog out to the park, get ready, go to the office. So from 6:30 ish to 8 while I'm kind of getting ready Getting in the office, that's some like really great thinking time for me because no one's calling me, no one's emailing me, no one's texting me. So inevitably I come up with ideas that I need to do and say and I will draft the text and then I will set it to send later to send it like 8:30, 9 o'. Clock. So I don't bother anyone's morning because I think mornings are sacred and people shouldn't be bothered. [00:14:20] Speaker A: Yeah. And I have industry friends and then just in other industries too that live by the schedule, sends on emails and texts A when they reply to something immediately, they still schedule it to go out a couple hours later to not set the precedent that they're going to respond immediately. And then same thing, if they're working late at night, it's not going out till mid morning the next day. Just to maintain that boundary. Even if you yourself decide to work in the hours you're not saying once you, you can say it. And then as soon as you're answering your phone at 8pm that now becomes the new expectation. So you have to stick to the boundaries yourself perception wise. [00:14:54] Speaker B: I've had a lot of inner monologues in regards to that. Oh God. So I used to. [00:14:58] Speaker A: Is your whole life an inner monologue? [00:15:00] Speaker B: Yeah, it is. I used to do that same thing and now I'll just send right away and, and I won't delay the send but if someone calls me, I'm not going to answer. Like you could email me and I'll respond when I'm available. You could text me, I'll respond tomorrow and you could call me. I'm going to deny it unless of course like there's an actual emergency. But I no longer delay the send on emails. For me, when I come up with it, I just send it. [00:15:26] Speaker A: Is there a culture of pretending to be successful even when you're struggling in this industry and is that impacting mental health? [00:15:33] Speaker B: 1,000%. [00:15:33] Speaker A: 1,000%. [00:15:34] Speaker B: I was, I was at a seminar, you could say last week and I was chatting with an agent and it was a non industry specific seminar, it was just business owners and I was chatting with an agent. He's, he owns his own office and I've known him for many, many years. I'm like how are you doing? How are things going? He's like oh my gosh, I'm so busy, I'm killing it. You know, so many deals, you know, so on and so forth. I'm like wow, that's great. Congrats like, you know, everyone else I talked to is kind of, you know, struggling. Yeah, the market's really frozen. People, you know, deals aren't going into contract. And after chatting with him for maybe another five minutes, then he's like, well, you know, actually I was really busy earlier this year and the last like month or so, it's been completely dead. Like not a single deal, no nothing moving, no showings. And then he, you know, then he was open and honest about it, but 100%. And I think a lot of that comes back to one of my first comments is like reality TV and how fake that absolutely is and people just wanting to be something that they're not [00:16:35] Speaker A: and giving the impression when you're having conversations. But I think also the materialistic aspect of things. [00:16:42] Speaker B: Yeah. [00:16:43] Speaker A: And feeling like you have to drive a car that maybe you can't afford or dress a certain way that you're going into debt doing and feeling like that's what you have to do to, you know, and there's, there's, you don't want to pull up in a hooptie that's going to give a perception, you know, maybe, maybe Uber or park around the corner and walk, you know, like there's definitely things that do give a version of a perception you don't want to give off. But you can be polished and presentable in clothes from Costco. Like you can, you know, whatever you need to do is better than stretching yourself to a thing that, that's not going to be comfortable for you financially. And then also whatever that does mentally living behind this facade that really is only in your head, but you're aware you're doing it. [00:17:24] Speaker B: It all depends on who the, who you are though. Like if you're trying to make yourself be to someone you're not, like you're killing it driving a Range Rover. You know, living in super expensive houses, traveling first class or private, you know, that's the image you're going to give off. That's what your clients are going to see. But even if you are killing it and you show up in a Honda Accord and you're, you know, super presentable, professional, articulate to the point, and that's your brand. Doesn't matter what you're driving, it doesn't matter. [00:17:53] Speaker A: One of my favorite guys, clients that I reference a lot owns a ton of houses, tons of ground up builds, all this stuff. And I never know if he's pulling up in a Honda Pilot or a Maserati and it's, you know, you just never know. But he doesn't care. [00:18:07] Speaker B: Yeah. [00:18:07] Speaker A: What about mental health impact from the inconsistent income rejection and then just like the constant availability, the constant need to feel like you're grinding? [00:18:19] Speaker B: Yeah, absolutely. I mean not knowing when your next paycheck's coming, not knowing where you're going to be, whether or not you're going to be able to pay, mortgage, feed your family, all of that has a massive and negative effect on mental health. So being in real estate, the majority of real estate agents make no money until there's a commission coming in. And while they're making no money, they're also spending a lot of money marketing themselves, being involved in the community, advertising, whatever it is, it's really difficult. [00:18:48] Speaker A: It just chips away at your mental health from the first day you jump into the industry. And then one more, and this one is separate, just alcohol and addiction related. Do you think that the social aspect of the industry can help facilitate someone that's struggling with that? [00:19:05] Speaker B: I think so. And that's a tough question. Right? Like most, I say most industries don't have the social component that being a realtor does. While you know, there's a chance for substance abuse in every industry and outside of industries, I think the social component of the real estate industry is certainly not to the benefit of someone who is struggling with those issues or temptations. [00:19:34] Speaker A: No, you can find a happy hour networking group, you can find somewhere to be from someone that's giving you a cocktail every hour of every day and it's acceptable. And so that would probably make that a little bit of a struggle. And if you're not doing a ton of deals and you're already struggling with the perception of what you're trying to give off there, paired with having the time to go to all of the networking happy hours, it's kind of a recipe for a disaster. So in talking about all this, this kind of leads back to the main point of our episode is that the barrier to entry is low. And I think we, we're gonna go into that. But a lot of the unknowns that can lead to the increase in the mental health struggles to me are part of the barrier of entry being low. And the actual understanding of the industry prior to someone jumping into it, that can come from all directions. Do you agree? [00:20:26] Speaker B: Absolutely. 100. [00:20:27] Speaker A: Okay. So it's knowing how demanding the career can be and then what it actually takes to get into it. None of that's covered in the requirements to get your real estate license, which are 135 hours of pre licensing work. 150 question salesperson exam that you have to get a 70 on. That's. I mean, when we were in high school, anything below 70 was failing. Do you remember that? [00:20:50] Speaker B: Yeah. [00:20:51] Speaker A: So you have to not fail. No prior real estate experience required. None. No mandatory apprenticeship before obtaining a salesperson license. You can literally pass your test and go access a contract and write a contract. And licensed salesperson must work under a responsible broker. And I would say that that word responsible is not something that's regulated. [00:21:11] Speaker B: No. And you also have to do the live scan to prove that you are not a felon. [00:21:16] Speaker A: Not a felon. [00:21:18] Speaker B: Yeah. [00:21:18] Speaker A: You can have misdemeanors, you just can't have felonies. [00:21:21] Speaker B: So in regards to 135 hours, that might sound like a lot, but within those 135 hours, there's, I think, three classes that are mandatory and then the remainder. You get to pick from a variety of classes that you would be interested in, such as, I don't know, property management being one, appraisals being one, things like that. So you have ethics code of ethics. Code of ethics is a mandatory. [00:21:46] Speaker A: There's a financial one. [00:21:48] Speaker B: Fair housing. [00:21:48] Speaker A: Fair housing, none of which covers an actual contract. [00:21:54] Speaker B: The only thing it covers is the laws and the terms. And the majority of all of the classes and the majority of the test is covering the laws and the terms, like how many square feet in a square mile, tracks and blocks. And what, what year was this law enacted? It teaches you nothing about real estate and how to actually be a realtor or have a successful transaction for a client or really to help them in any capacity. [00:22:25] Speaker A: There's a difference between a licensee and a realtor. You then have to go be part of a board and they do have additional ethics courses and kind of 101 courses you can take. But even then you become part of the board, I think you have to take the ethics course, court with them within 90 days. But aside from that, once you're part of the board, you have access to the mls. You have your car forms in California. That's our software that we use for the actual contracts and disclosures and things like that. You can start practicing real estate immediately. [00:22:55] Speaker B: And once you're under a broker. [00:22:57] Speaker A: Yeah, once you're under a broker and the person on the other side may have no idea that you've, you know, nothing tangent here. [00:23:04] Speaker B: Something I always love when I'm talking to people and they're like, oh, yeah, I have a real estate license, but I only use it on special, special occasions. [00:23:11] Speaker A: How well does that work? [00:23:13] Speaker B: Yeah, exactly like oh no, I'm, I'm a realtor but only when I absolutely have to be. It's like oh, must get a lot of experience. [00:23:20] Speaker A: Yeah, that's scary. I just do it for friends and family. Do your friends and family know you only do it for friends and family and probably have no idea what's going on in the current market. How much of what is learned in licensing school is actually used? [00:23:35] Speaker B: 1%, maybe less. [00:23:38] Speaker A: Zero. [00:23:39] Speaker B: There's a few laws that you need to learn to not break and I don't remember anything else that I've ever used. [00:23:47] Speaker A: I will say in going back for the broker stuff, a lot of it you I could immediately answer and I think that's just from overtime experience. So yeah, there is some components. [00:23:58] Speaker B: A lot of the same. [00:23:59] Speaker A: Yeah, it is a lot of the same actually. [00:24:01] Speaker B: I think it's all the same. I think you just have to get more questions and more of them. Right? [00:24:04] Speaker A: Yeah, it's 300 and I think you have to get 80%. Yeah, something like that. We did not talk about the 135 hours of coursework is not actually you can take actual courses and, and do it but the way that it's regulated, at least in California is they space out the online prep courses to get to the final. They space it out to where you have to take it over 135 hour period. But a lot of it's just doing the quizzes and then waiting until it lets you do the next one. Um, so Even though it's 135 hours of coursework, which probably is too low anyways, it's not even actually 135 hours of coursework. That's how long they make you wait. [00:24:43] Speaker B: A game changer now is going to be with AI. There's going to be no question that you can't screenshot and put into AI and get through immediately. So those quizzes are completely relevant. Someone's still going to have to pass the test. But besides that those quizzes are irrelevant. [00:24:58] Speaker A: It's going to come down to the individual and how much do they want to get out of it because you can just breeze through it. [00:25:03] Speaker B: Yeah. [00:25:04] Speaker A: What about what do you wish someone told you before you entered the real estate industry? [00:25:10] Speaker B: Oh man. Well, I think my career is a bit different than most. [00:25:16] Speaker A: You knew what you were getting into. [00:25:19] Speaker B: I kinda for the most part knew what I was getting into. But I thought it would be more relaxed than it is. But I think that's my own doing. And because of how Many different balls we have going at any given time and how many different initiatives and projects and everything else. [00:25:37] Speaker A: You threw a podcast in that mix. [00:25:39] Speaker B: I mean, that's fun. But I'm more so. How so? I was at a seminar, this was like a year ago, it was an asset protection seminar. And they were talking about how litigious the United States is and on top of that, how litigious California is. So the United States is incredibly litigious relative to every other country. California is very litigious relative to every other state. And then of all of that, like a vast majority of lawsuits in the United States are real estate related and then a vast majority of those are tenant landlord related. It's a lot and I feel like it's everyone's go to and it's. It's really kind of sad and frustrating. [00:26:20] Speaker A: Yeah, I wish someone there's a course or really drives home when they give you that commission check what you need to do for taxes and how you need to budget. Just any sort of financial plan. Because I closed a couple deals pretty early on and they didn't close anything for a long time. You know, just any sort of grasp on what the income looks like in this industry when you're 100% commission based. [00:26:44] Speaker B: Tangent. When you did close those deals and got all those checks, did you. What did you buy, if anything? [00:26:51] Speaker A: My Ford Fusion. That was kind of my first because I had that Silver Beetle that I loved, but it was dying because I had it for so long. And so I did buy a car after my first couple transactions that had four doors. I remember that being my. I can't have clients like hop behind my backseat and that. Back in the day you used to drive clients around a lot. Not so much anymore, but I remember I was so excited to have a car with four doors because that was needed. And then I put a magnet on it that had my face on it. Oh my God. And then I didn't save for taxes. And then I finally met Jesse, who sorted all that out for me a couple years in the business and did the whole S Corp thing and all of that good stuff. And it's been a game changer having that structure in place and learning all of that. But that was just me floating around to the happy hour seminars and trying to figure out what was going on. And had I not done that, I probably wouldn't have. Would have been in a different financial boat early on. But you know, live and learn because no one teaches you. [00:27:51] Speaker B: Well, no one teaches you regardless of this industry. No One teaches you financial literacy in really any industry. It's kind of sad. I think one of our many, one of the major flaws in our society, in our education system. [00:28:03] Speaker A: We seamlessly transitioned into our next component of this, which is the financial and emotional reality of being an agent. And you get your license and you're now running a business, like all aspects of a business. Right. You're doing it all, or you're supposed [00:28:19] Speaker B: to be doing it. [00:28:19] Speaker A: You're supposed to be doing it all with no history. For most of running a business, you're negotiating contracts, you're doing your bookkeeping, you're setting a budget, you're allocating time to customer service and lead generating. You're doing all of it. And there's no roadmap unless you seek one out. There's nothing handed to you and no experience. Like what does that even result in? Mental health struggles. Yeah, mental health struggles. So on that topic, do new agents understand that they could work six months without earning a paycheck? [00:28:52] Speaker B: I think they understand that, but no one thinks it's going to happen to them. And the reality is they probably work much longer than that without a single paycheck. [00:28:59] Speaker A: Yeah, right now I would say probably nine to 12 months. And the part. Okay, it's going to take me a long time to actually earn a paycheck. The amount of money that goes into. So it's not just earning that paycheck, it's having the money saved to get you through to that point that you can actually execute a deal. [00:29:16] Speaker B: Yeah. [00:29:16] Speaker A: You need to expect to spend thousands to build anything that's actually going to turn into anything. How many agents underestimate the actual cost of running their business? [00:29:26] Speaker B: 98.5. [00:29:27] Speaker A: All of them. Yeah. You can spend a lot of money [00:29:30] Speaker B: because there's agents that come into the industry at a later stage in their life and they've been professionals. They know what it takes and what it looks like. And I think they come in more educated than someone you know right out of high school or college. [00:29:44] Speaker A: You want to know what grinds my gears? Someone that I know grinds my gears. An agent that I know produces and still is making very cheap choices when it comes to serving their client. That drives me crazy. Your commission check is someone paying for your business to provide a service. This is my opinion. It's a business. You should be allocating some of that money towards serving your clients at a high level. It's not all of your money. And now I have to give this much away to get professional photos or, you know, it's not all your paycheck. It is a commission to a business to serve at a high level. And so many agents just assume that whole commission is theirs and it shouldn't be. [00:30:28] Speaker B: The market will eventually see that, but they're going to be delivering a much lower product relative to their expense. And mind you, there are also the agents who will charge 1% and they're like, hey, this is what you get. They're not shy about it. And you know that you're paying a much lower commission and generally going to get a much lower service. [00:30:48] Speaker A: Yeah, but there's agents collecting full commissions and then not. Not using it to actually serve. How does financial pressure affect the agent's ability to advise a client subjectively? I love this one. [00:31:01] Speaker B: That's a really hard one. Ultimately it shouldn't, but the reality is I think it does. And everyone's different. Yeah, I mean, it's really, really hard. [00:31:12] Speaker A: My petty self. Like, sometimes I'm like, what is going on with this agent? And as soon as it clicks that they are desperate for this deal to stick together, I go and look at their. And I'm like, oh, they have nothing going on. They haven't closed anything in X amount of months. And I feel, you know, for those scenarios. And I've been in those scenarios, not, not where I'm being desperate, but where I haven't closed anything. I save all my plan for the downtimes because they come. It clouds the negotiating and it clouds the ethics of it all. If you're, if you're counting on that commission, check, because maybe you're going to pay your mortgage. Whatever it might be, I would say you're more likely to cut a corner, try to cover something up, try to desperately do something to make sure the deal closes that will ultimately end up biting you in the ass later and probably your client in a really big way. You can't be desperate. [00:32:01] Speaker B: And we are not saying that just because someone's desperate that they will cut corners. [00:32:05] Speaker A: True. [00:32:06] Speaker B: But I think human nature is that when your back's against a wall, you'll do what you have to to survive. And that puts people in a tough position and someone. It leads to a higher prevalence of potentially being compromised. Super random tangent again. I remember I was in a trip to Africa. I was on a trip to Africa. We were doing a safari in South Africa and we were talking to game wardens in regards to poachers. And you see these rhinos, these elephants. You're like, these are beautiful creatures. Why would anyone ever kill them? And they were explaining to us that a poacher could sell the horn of a rhino for the equivalent of a lifetime's salary. And in a country where there's just extreme poverty, people are just struggling, literally struggling to survive. They could get one of these horns and sell it for the equivalent to a lifetime salary for them. So when you put that in perspective, their kids may be dying, their spouse might be dying. They could go do this, save all of them, and be set for the rest of their lives. It puts people in a really tough position. And only until then did I finally really understand why these people would do it. And there's, of course, the greed component of it, but it goes much further than greed at that point. It's doing it to survive. It's you or them, essentially. [00:33:37] Speaker A: Dang. Okay. And then on the financial component, all of the shiny. I'm. Is it recruiting, recruiting strategies or just in general? Look how much you can make in real estate earning potential. You know, like, you see like the LinkedIn ads where they're hiring agents for $125,000, when realistically it's, we're going to teach you how to make $125,000. Do you think in all of that hype of what their earning potential could be, we are setting up newer agents or people joining the industry for burnout and just unrealistic expectations? [00:34:14] Speaker B: 100%. [00:34:15] Speaker A: Yeah. [00:34:15] Speaker B: And also too statistically, like those statistics should be more known. What it, like 90% of deals are done by 1% of agents or something like that? I haven't looked recently, but it's close to that. And shocking is that. Yeah, yeah. It takes a long, long, long time to get there. So new agents need to know it's not that easy. Money's not just going to fall in your lap. And it's not like it is on TV. Even like in the early 90s, 2000s, the flipping shows. That one would always frustrate me because you see Flip or Flop and a local Orange county show, and the numbers that they put up for their renovations are so just false. It's not even close to reality. And they, they, a lot of times will go to, you know, different manufacturers, tile stores, whatever, and say, hey, we're going to advertise your name. We want all this for free. They'll go do their flip, get all the materials for free, huge discount on the labor, and even then understate how much they actually spent on the flip. And that's what people think is reality in real life. And it's Setting people up for failure. [00:35:23] Speaker A: Okay, we're transitioning into our brokers part of the problem. [00:35:26] Speaker B: I think some brokers, absolutely, brokers can [00:35:31] Speaker A: shoot for quantity over quality. And I think that's not good because how do you serve everyone? You know, when you're just after the numbers and really there's no oversight. I also, you and I talked about this. The barrier of entry has been a nuisance for a long time. But where that can change is just because someone doesn't have a. Just because someone has a license doesn't mean that they can work at your brokerage. And where, what standards do you set as a brokerage? As a broker, how can we help combat that lack of experience and knowledge with someone that can go write contracts? I think it starts with the brokers and having their own barrier to entry. [00:36:11] Speaker B: That is a great idea in theory, but to get every broker in California or even the United States to be on board with that is, I think, unrealistic. It's going to require a move from the government to change the standards for a Realtor in order to be able to, you know, increase the barriers to entry and the standards of which realtors or agents need to be at to help them work with clients. [00:36:40] Speaker A: Like for us, we would never have a brand new agent. I mean, we had new agents wanting to come and our response was, we can't at that time give you the support that you would need to successfully close a transaction in a way that was beneficial for you and the client and all of that. And that was really early on. And I stand by that because we could have just said sure and let them come on and then, you know, go do and say whatever and do write up whatever terms or whatever they thought they were supposed to be doing. That easily. A broker could do that. And if you're focused on quantity over quality, how are you helping everyone learn and develop even experienced agents with the changes and, you know, all the new laws and everything like that? If you are not a broker focused on that, you're part of the problem a hundred percent. Are you going to be part of the problem? [00:37:28] Speaker B: No, no, I have too much ocd. [00:37:31] Speaker A: Too much ocd. What does meaningful broker supervision actually look like? [00:37:36] Speaker B: I would probably change one of those words, supervision. If you have to put it in the terms of supervision, you're already failing because you can't be supervising all of your agents all the time. It's really about being proactive, teaching, educating, supporting, leading them as opposed to trying to manage and supervise them. These are all adults by definition. I think you do have to be 18 to get a real estate license in California. So if you're sitting on the perspective of supervising and micromanaging, you're never going to succeed. It's finding the right people, supporting them, helping them get the right training, education, the right leadership, setting their values, and helping them get to where they want in the way that they should. That abides by the laws, ethics, even the values of the brokerage in the company. [00:38:26] Speaker A: Yeah. And I think with the stage that we're at now as a brokerage, I think our availability and accessibility is very high. If you like, if I need help with something, I call you. You're on it right away. Right. Like that. That's not common. And then if the agents need help with something, I'm available to them at all times and I drill into them. You do not have to know everything like I would rather. And you know, they're experienced and they're doing deals, but they're still. I would rather them double check something with me, run something by me, not be scared to call me before they're gonna do something that they're not 100 confident in. And I'm gonna maintain that comfort level because, I mean, one of my favorite agents that does this all the time, she runs everything by me all the time. And she knows she's doing it. She'll start it with, I think I know the answer, but. And I don't want her to ever feel like she can't do that. That comes from the brokerage level. [00:39:18] Speaker B: Another hard thing around this in this industry in general is you could be doing everything right and still not succeed. [00:39:26] Speaker A: Yeah, that sucks. That's so true. Or you could do everything right and still get a DRE complaint against you [00:39:32] Speaker B: or do everything wrong somehow get a deal. [00:39:35] Speaker A: Yeah, true. And you can. Or you can do everything wrong in it and everything goes well. It's. That's a whole other topic. You can do everything right and things don't happen. It's out of your control. [00:39:44] Speaker B: There's also a lot of sketchy agents who do a really good job of masking their sketchiness and do well for themselves at the expense of their clients. [00:39:52] Speaker A: Yeah, people don't realize that's happening either. But I think that the brokerage just barrier to entry brokers are important with regulating that on their own terms and trying to keep the industry standard high. But also from the mental health component of things, we have a culture of collaboration in our office. So it's. If you're struggling, like people are excited to Share that they're struggling, what they're struggling with and, and just kind of a home base of feeling, okay, that you're not doing the most. And I think that's really important too. I couldn't imagine doing this without other people in the industry that understand what's happening, especially right now. Like, right now is a tough time to be in the industry, but we're still all banding together and adapting and working through it. And I'd probably be crying. [00:40:39] Speaker B: This industry as well as many others, there's so many components of it that are so outside of your control, so out of your hands that you just have to deal with it and do the best you can. Like interest rates, mortgage rates. Right. The economy, the state of the economy, the strength of the economy, all of those things which are fairly big. Play into how successful a realtor can be. And regardless of how hard someone's trying, how well they're doing, there's some nuances there, right? Like some people are going to fare well, better than others, but those are outside factors that completely dominate the market and really dictate someone's success. [00:41:21] Speaker A: And like right now, my. They're not pep talks, but just I'm reminding the agents that are grinding and nothing's happening. Like it's. And they are doing everything right. Keep going, keep. The market will shift eventually and you need to be ready for when that happens. And other agents are just kind of dropping out. I'll come back when it's easier. Literally, I'll come back in the spring. Okay, cool. The ones that are committed are going to thrive because they're going to be ready to go. But do not let the results of this market dictate your mentality towards the long term plan, because that would be very sad because at some point it'll turn. Yesterday I was texting you because I did. I kind of paused. I told. I regret setting that time aside to do nothing because all I did was my brain just started processing what's actually been happening. And like, holy shit. Like, if I can keep myself busy, then I can just move on to the next fire, next fire, next fire. You know, like, I can do what I, what I'm doing, but the second I had more than an hour of time with myself, it was like, holy shit. Like, what is this market? It wasn't feeling depressed, it was burnout. I don't know, it just. It's a tough time. It is, mentally, and it will. These moments will always happen. Okay, so in all of this, who ultimately pays the price? [00:42:38] Speaker B: Well, That's a hard question. But I think everybody, everybody who is [00:42:43] Speaker A: unaware that they're paying the price. [00:42:45] Speaker B: Everybody. Sometimes it's the agent, sometimes it's the consumer. No, I think everybody. Because even to your point, imagine how many agents are out there right now just beating themselves up like not making any money, freaking out about their next paycheck, trying to do everything they're supposed to and can do and they're still failing. But it's not on. Not necessarily not on them, but there's a lot of other factors at play that are against the real estate market right now. But yeah, the consumer does absolutely get hurt in situations like this, but so does everybody else. [00:43:19] Speaker A: Yeah. Do you think that there's changes? I mean there's obviously changes that can happen, but do you think there's realistic changes that can happen to help elevate the barrier of entry or put accountability on brokers to actually maintain a certain standard? Like should California require practical experience before an agent can independently handle a transaction? [00:43:44] Speaker B: Yeah, I think the barrier to entry needs to be significantly higher. Now. Will it happen? I don't think so. I don't think it will happen until there is there's some massive headline news making event that pushes the legislator to increase the barrier century. And also I think there have been enough of those and it doesn't happen. But I think that's what it will take to actually require or to push the state to increase the barrier century because otherwise I don't think it would be good for anyone's political career. I think they would just get a lot of pushback and. [00:44:20] Speaker A: Yeah, well it's like, I mean we do have continuing ed and all of that to keep your license valid. But it would be like to me, I think if there is a permit process like a junior license and you have to prove X amount of deals before but there's not the resources to actually regulate that. [00:44:38] Speaker B: I mean instead of a permit or instead of a real estate license, maybe in addition to real estate license you actually have to intern for six months or something like that. It's wild how poorly the real estate salesperson test prepares someone for a career in real estate. It doesn't at all whatsoever. [00:44:54] Speaker A: Well, that's my second question. Do you think there should be practical contract like we do the listing boot camp and buyer's boot camp and we're teaching agents how to actually go through the contract. Should something like that be part of the real estate license requirements? [00:45:11] Speaker B: I think it's like a real world [00:45:13] Speaker A: contract disclosure negotiation scenario or have the [00:45:18] Speaker B: Broker have to sign off that their salesperson has gone through this training and they are responsible, their license is responsible in the event that they aren't actually trained and go out and hurt a consumer. [00:45:34] Speaker A: Yes, again, something that can't be regulated because people will just sign off on it. Should financial literacy and business planning be part of the new agent onboarding requirements for brokers? [00:45:45] Speaker B: Maybe we could do a whole different podcast on that, but I think it should be part of high school, probably part of middle school and maybe even part of elementary school. [00:45:51] Speaker A: Yes. Yeah. I mean, Sadie just did the book fair. There's a little bit of ability to teach how to spend money at a book fair, but that's about it. Should mental health resources and conversations about burnout be part of normal brokerage culture? [00:46:07] Speaker B: I think it should be. It's a really hard topic, but I think for those who want to listen, they should. And now, mind you, I know there's a. People going to be out there be like, oh my gosh, this generation, they're soft. This and that. I've seen this affect people in every generation. It's just a reality of it. I think people are just more in tune with that these days than before. So yeah, I think it should. And not, you know, sit around, hold hands and sing Kumbaya, but to really understand what you're getting into and how to, you know, weather the storms when they do come and be the best version of you for your clients, for your family and for everyone around you. [00:46:48] Speaker A: Like, not just celebrating the agents that are producing and talking about this and that, but I think openly, and I'm pretty open about it in our office, this market sucks. [00:46:58] Speaker B: Something that is, I think, very openly talked about in the business world, especially from a leadership perspective, is what I've always heard coined as the terrible talented terrors. The people who are super good at their job, they're a producer, but they are terrible for the culture, for the team environment, a liability to the organization. Those under normal business, in normal businesses more now than ever, are being weeded out, cut out, and realizing that their production is not worth the damage that they cost to an organization within a sales organization, especially one like a real estate brokerage. I don't think that's the same thing. I think they're still highly coveted and, and you know, touted as the, whatever, the guiding light, the, the example because it's a lot less collaborative, a lot less team oriented in a real estate brokerage than, you know, in a regular company. [00:47:57] Speaker A: So in kind of just wrapping it up do you think the bigger issue is the barrier to entry or do you think the bigger issue is the brokerage side of things, preparing and being realistic for agents as they enter the industry? [00:48:10] Speaker B: I think the biggest issue is reality TV after that and Instagram. Yeah, the barrier and TikTok, the barriers to entry. And then I think after that is the brokers, because the brokers aren't going to change things unless they're forced to. But the government can change the barrier to entry and have it just be set at a legislative level for the state or federally. And I'm not one that believes in a lot of legislation, laws. I think you let the economy, the free market, do the free market. But from practicing real estate for as long as I have and being involved in the industry, I think there's a lot of room for improvement. [00:48:50] Speaker A: So my takeaway is that I understand we've always joked mental health is prevalent in the real estate industry. But in really breaking it all down, of course it is. [00:49:03] Speaker B: What else do you expect? [00:49:04] Speaker A: Yeah, I fully understand why. And people need to be aware of it. [00:49:09] Speaker B: And also too like the personalities who like, who are okay with having very little stability, who are very people oriented, love selling, you know, all of those are generally the people who are going to be a little bit, well, a little bit more interesting in their personalities. [00:49:27] Speaker A: I mean that's sales in general. Right. The sales people in all fields. You have to be a little unhinged to do well at it. [00:49:35] Speaker B: Some people are just a bit more than others. [00:49:37] Speaker A: Yes. Some have their moments. Okay, do you have any closing thoughts? I want hopefully people comment kind of their opinion on this or what level of burnout they felt. [00:49:46] Speaker B: Well beyond the burnout talking. If you're a new agent, you're listening, you're thinking about it. Really look at what it takes to succeed. Do you have the Runway? Is this something you're fully committed to or be honest with yourself. And I think there's still a lot of like the weekend agents that have full time jobs and they just do here or there. That's not a bad thing. But it's about just being committed, being knowledgeable, knowing what you're getting yourself into and ultimately being able to deliver on your promise to your clients and to your family. [00:50:14] Speaker A: Talk to people that are already in the industry, ask them all the, the questions and expectations and not one person. Talk to a few and really grasp what this looks like for you and prepare yourself mentally. Don't dive off the what, dive into the deep end. [00:50:29] Speaker B: Yeah. [00:50:29] Speaker A: Or do probably really good at sales. [00:50:32] Speaker B: Burn the boats. [00:50:33] Speaker A: Yeah, let us know what you guys think on different ways they can actually raise that barrier to entry. And then we'll take it to Sacramento. Okay, talk to you next time. [00:50:43] Speaker B: Thanks. Listen, like, subscribe, do all that. [00:50:47] Speaker A: That's a wrap on this episode of AllView360, all things real estate. If you found this this helpful, don't forget to subscribe, leave a review and share it with someone navigating their own real estate journey. Connect with us anytime on Instagram @AllView360 and on LinkedIn @AllView Real Estate. Until next time, stay curious and keep your perspective. 360.