I had learned the curriculum and passed the certificate test. Next up was the state exam. If I could do it over again, I would have timed things a bit differently, such that I would not have had to wait 4 weeks to take my state exam after having finished the course online. In a perfect world, I would have taken the exam that same week I did the online study so that it would have remained fresh on my brain. Given that was not the case, I had to make sure that I stayed up to par on all of my vocabulary and pertinent facts, which I did via the flash cards and high lighted sections of my text books. This was a huge help, as these tools were just reminders at this point. I was really starting to know this material, as I recited the answers to self proposed questions sarcastically and exuding confidence gained through repetition.
In preparation for the exam I had to fill out a relatively lengthy application and get a back ground check via Live Scan. Live Scan pulls its information and data from the FBI database, among others. This background check is national in scope and very conclusive. In order to obtain the back ground check I had to submit digital finger prints and pay a small fee (if my memory serves me it was around $27). The results were mailed to me within a week or so and I would then include this file with my application and course completion certificate, and again, a small fee, for filing I suppose.
I bundled this all up in a crisp brown folder and waited patiently for my exam date. The night before I made sure to take care of myself. I felt as though I had a game the next day. I stayed off of my feet. I ate plenty of carbs and fruit and vegetables. I drank loads of water. I watched a light hearted funny movie to laugh a bit and to take my mind off the pending test. I set out my materials for the day ahead…Comfortable clothes. Fresh bottle of water. Pencils. Map to test site. Crisp brown folder with all my goodies. I set my alarm for the morning to wake a few hours before I needed to to ensure I had time to eat breakfast at my favorite spot and still make it to the testing center with time to spare. I went to bed early.
Everything I had expected and planned went along to the note. I arrived fed, early, and with enough time to make friends with the proctor. I found a seat that wasn’t under an air vent and got down to business from the moment the clock started ticking. I finished relatively early and thought it would be a good idea to read the exam again to insure each of my answers was in fact my best answer and I ended up changing only 2. I turned in my completed exam, packet, and pencils and thanked the gentleman for his time. Just before I left I quietly asked, “So when do you think we’ll be able to get results?” I was disgusted by his answer, although I had assumed such. “Not real sure. It can vary from a couple weeks to a couple months. You can call the department to track the process.”, he explained in monotone. This is a multiple choice test, for heavens sake. The internet has boomed, burst, and on the way up again. One can send a fax with a cell phone. I can have a Russian automatically translated into English within my email. Frustrated, I asked myself in my mind, “Why can’t I know right now if I at least passed the test or not?” I let it go and left.
The coming weeks were patiently passed by my morning ritual of checking the DRE website and then getting on with my day.
Finally, after 5 weeks, the status of my profile within the department website changed. I had passed. I was licensed in the State of California to sell real estate.
All in all, the process took about 3 months, cost around $300, and I learned a ton of useful information, no matter if I ever sold a single home or not.
Now I had to learn how to get clients and that is a story for another day..
I needed to take the certificate exam and then needed to take the state exam, which had been touted as long, hard, and an examination that most people fail the first time.
In response to those that warned me, I confidently explained that I had actually learned the material and that I felt that I would be fine. This ended up being the truth, however it did require me a large measure of focus and concentration to absorb the new curriculum.
Curiosity had me, as I started the text and studying. I asked myself, “What are real estate practices and principles and will real estate finance be as boring as I found the ins and outs of accounting in college?”
To my delight, it was very straight forward and easy to comprehend.
The topics listed below are those specifically presented to those learning to broker real estate in California, however I think mastery of these concepts are a good starting point for anyone starting a career real estate.
Real Estate Principles topics include:
Department of Real Estate – Role, jurisdiction, licensing, continuing education, violations
Real Property – Rights, types of estates, real property vs personal property, descriptions
Title – History, ownership, recording, encumbrances, title insurance
Contracts – Elements of a valid contract, breach of contract, statute of limitations, types of contracts
Agency – Agency relationships, duties of an agent, MLS (multiple listing service), cooperating brokers, disclosure and confirmation
Conveyance And Escrow – Escrow process, relationships of those involved in the escrow process, RESPA (Real Estate Settlement Procedures Act)
Leasing – Landlord and tenant rights and duties, crafting a lease, rent payments
Finance – Lending, deeds, mortgage, short pay, foreclosure
Appraisal and Taxation – Valuation, reconciliation, types of taxes, tax collection
Brokerage – Code of ethics, regulations of the real estate commissioner, operation of a brokerage
Math – Investments, commissions, pro-ration
Real Estate Principles was a general outline of the industry at large. It gave me pertinent vocabulary, how the different sectors worked with each other, and how it would all affect me and my job. I was now ready to learn Practises.
Real Estate Practises topics include:
Profession – Industry, economy, what it takes, finding a broker, continuing education
At this point I understood what my job would be, how it worked, and how to talk about it. Next up was to delve into understanding the fuel that drives it all. MONEY! I like money. I like understanding money. I like being versed on how it works in relation to real estate and the sources from which it comes. Never mind the days of accounting 101 in college, amorphous acronyms like EDITBA and FIFO, and a very very stuffy professor. I found this book very interesting. Perhaps it was that it was applicable to what I just learned or maybe it was that I could use real world examples to understand it better. It’s one thing to learn what an interest rate is, but its another ball game to understand the drastic difference it will make to living my life to obtain a loan for 5% as opposed to 6%.
Real Estate Finance topics include:
Introduction – Meaning of money, money flow, mortgage basics, instruments of finance
Investment Financing – SFR (single family residence) to multi unit apartment building, debt coverage ratio, break even analysis
I read these books, used a yellow highlighter to note main points, took the practise quizzes, and finally the practise tests. By the time I took the certificate exam it was a piece of cake. Easily enough, I passed, printed my completion certificate, and went online to schedule my State exam. To my dismay, I had to wait several weeks before I was able to sit for the exam, but I did sign up and was one step closer to getting my license.
Tune in tomorrow for the finale and the other pieces of information I had to gather to eventually get my license
I had been recruited to live in Los Angeles to work for a real estate development firm and supervised the building of the Yankee Hotel in downtown LA. It was all good, an eye opener, but all good. We finished the project and delivered on time and within budget. Right about then, the market started to shift. I believe the owner of the company I was working for saw the writing on the wall and as projects ended, he was letting those folks go. Me included!
I was mad, then sad, then mad again! This guy paid me good money to stop my life back east and move to LA to work for him. I felt as though I did all that he asked, and more, yet he let me go when the project was done. The way I figured it, he could have me on the pay role for the next 8 years without ever making another dime off of my efforts and still be on top, but of course that is just my side on the story.
So I drove from his office in a frump! I stopped at the driving range to hit a bucket full of balls only to be reminded how hard it is to golf when angry or the like. I walked in a few circles, sipped a diet coke, and tried my hand again. This time I let it go. I let go the anger that I was experiencing from being laid off. I let go the thoughts of “What am I going to do now”. I let go off the obligations swimming…swarming in my head of my obligations, some of which were waaaaayyy over due. I just let it go. Realizing that becoming a broker would be a good idea was the result.
So, after a good meal and another diet coke (this time with a bit of jack) I started on my quest to get licensed in California to sell real estate.
I started on Google with “California Real Estate License” and found a few licensing providers and the Department of Real Estate website, which had quite a bit of useful information. After browsing the California Department of Real Estate website, I found that I needed to successfully pass 3 college level real estate courses including:
Real Estate Practises, and
Real Estate Principles, and
One course from the following list
Real Estate Appraisal, Property Management, Real Estate Finance, Real Estate Economics, Legal Aspects of Real Estate, Real Estate Office Administration, General Accounting, Business Law, Escrows, Mortgage Loan Brokering and Lending, Computer Applications in Real Estate, Common Interest Developments
I ended up going with one of the licensing providers that resulted high in the google rankings and based upon what I discovered about them via direct search of their name, felt they were a good choice. I signed up and zapped them about $200 and they gave me access to download the texts and off to the races I went.
It was Friday night, about 8pm, when I got access to the texts. I had the house all to my lonesome that weekend and where I had originally planned on moping the entire time in lieu of the layoff, now I had a project…a purpose!
I opted to take Finance, as my elective, becuase I like numbers and understanding how numbers can illustrate the value of a parcel, I felt would be fun. Both of the required texts (Practises and Principles) are in excess of 500 pages and so was Finance, so I had my work cut out for me. But the books are in double digit revisions and quite an easy read. They are organized well and the language used is simple.
Now, I do not want to deceive anyone by saying that I read all 1,500 pages over that weekend, because I did not, but I did competently complete the course by the following Tuesday evening. I studied and graduated from college with a business degree, so that helped, but alot of the material was new. Self explanitory after I read and understood it, but new just the same.
I was blury eyed, sleep deprived, and slightly hungry, but I was done. The key was getting focused. I turned off the Blackberry, shut off the internet, and hung a “Nobody Home” sign on my door…seriously! I studied the highlighted sections very closely and took the practise tests and quizes throughout the curricula, and it served me. I also made flash cards for the first time since the 5th grade and they worked as well. The vocabulary was pretty simple and at the end of it all, it all came together.
That Tuesday night I slept like a baby. Next up was the certificate exam and then the State exam.
If you want to succeed you should strike out on new paths, rather than travel the worn paths of accepted success. – John D. Rockefeller
I regularly am asked about when might be a good time to start selling real estate or insurance. “I’m an engineer, or a programmer, or a whiddily bop, but I really understand and enjoy sales. I’m just not sure when to make the jump”, they say.
Now! Right Now!
We are currently in a mess of a recession. It’s nasty. People are losing homes, getting laid off, and sales are few and far between. It’s hard to persevere. Its not easy to keep a positive outlook in the midst of everything, which I think is crucial to sustained success. But there is opportunity. There is opportunity everywhere. The annals of history have illustrated this over and over again.
Success is realized when an individual moves in the opposite direction of the masses. Those that have amassed huge portfolios of real estate did so when the masses were selling. Firms that garnered incredible intelectual resources did so when the rest were laying people off. Individuals that decided to do what they really love and created amazing success have done so when the greater population has done all they could to stay put for security’s sake.
So why now?
Now is the best time for a number of reasons:
People are leaving the industry in droves, for a myriad of reasons. There isn’t as much competition.
With less competion, it is easier differentiate and make a noticable impact in the marketplace.
In a slower paced market, one can actually learn the important nuances of the business.
As the market turns, you’ll be poised to take advantage of new opportunities.
Firms are investing heavily in those that exhibit the desire to persevere.
This list could could go on and on, but I trust you understand. There could not be a better time.
Has there been a better time to buy a house or income property? Has there been a better time to invest in devalued companies, via stock? Have insurance products ever presented themselves as more solid, sound, and secure investment vehicles?
Who will these consumers turn to to find sound and objective advice and professional representation? Will it be you?
Another point to consider is the timing of the market. What do you think is going to happen when the media shifts its message from “doom and gloom” to “sunny days are back again”? Will the people that have been patiently waiting on the sidelines wait for the market to reach its peak before jumping back in or will they go ahead and pull the trigger to get invloved? Will the folks that left the industry by the dozen over months and months come back over the same time span or will they plunge right back in? Will the clients that desire the services of these trusted professionals look to those “fair weather” brokers or will they remain loyal to those that stuck it out and were there when there wasn’t tons of money to be made?
This isn’t to say it will be easy, because it will not. Nothing any good is ever easy.
Here are a few points to ponder:
Do you have the resources or ability to moonlight to carry you through?
Do you have what it takes inside to create new business?
Are you willing to do the hard work it will take to learn your craft?
Are you confident in yourself that you will research and learn the skills needed to be successful?
Are you willing to do what others are not such that you can make something for yourself and your family?
At the end of the day, when you look at yourself in the mirror, you are the only one that can answer these questions and you must be truthful with yourself.
This is an interesting look at the Real Estate industry from the US Bureau of Labor Statistics. Visit their site for more details and facts: http://www.bls.gov/oco/ocos118.htm
In addition to offering insurance policies, agents increasingly sell mutual funds, annuities, and securities and offer comprehensive financial planning services, including retirement and estate planning.
Agents must obtain a license in the States where they sell.
Job opportunities should be good for college graduates who have sales ability, excellent interpersonal skills, and expertise in a wide range of insurance and financial services.
Nature of the Work
Most people have their first contact with an insurance company through an insurance sales agent. These workers help individuals, families, and businesses select insurance policies that provide the best protection for their lives, health, and property.
Insurance sales agents, commonly referred to as “producers” in the insurance industry, sell one or more types of insurance, such as property and casualty, life, health, disability, and long-term care. Property and casualty insurance agents sell policies that protect individuals and businesses from financial loss resulting from automobile accidents, fire, theft, storms, and other events that can damage property. For businesses, property and casualty insurance can also cover injured workers’ compensation, product liability claims, or medical malpractice claims.
Life insurance agents specialize in selling policies that pay beneficiaries when a policyholder dies. Depending on the policyholder’s circumstances, a cash-value policy can be designed to provide retirement income, funds for the education of children, or other benefits as well. Life insurance agents also sell annuities that promise a retirement income. Health insurance agents sell health insurance policies that cover the costs of medical care and loss of income due to illness or injury. They also may sell dental insurance and short-term and long-term-disability insurance policies. Agents may specialize in any one of these product areas, or function as generalists, providing multiple products to a single customer.
An increasing number of insurance sales agents are offering comprehensive financial planning services to their clients. These services include retirement planning, estate planning, and assistance in setting up pension plans for businesses. As a result, many insurance agents are involved in “cross-selling” or “total account development”. Besides offering insurance, these agents may become licensed to sell mutual funds, variable annuities, and other securities. This practice is most common with life insurance agents who already sell annuities, but many property and casualty agents also sell financial products. (See the statement on securities, commodities, and financial services sales agents elsewhere in the Handbook.)
Insurance sales agents also prepare reports, maintain records, and seek out new clients. In the event that policy holders experience a loss, agents help them settle their insurance claims. Increasingly, some agents are also offering their clients financial analysis or advice on how to minimize risk.
Insurance sales agents working exclusively for one insurance company are referred to as captive agents. Independent insurance agents, or brokers, represent several companies and match insurance policies for their clients with the company that offers the best rate and coverage.
Technology has greatly affected the insurance business, making it much more efficient and giving the agent the ability to take on more clients. Agents’ computers are now linked directly to insurance carriers via the Internet, making the tasks of obtaining price quotes and processing applications and service requests faster and easier. Computers also allow agents to be better informed about new products that the insurance carriers may be offering.
The growing use of the Internet in the insurance industry has altered the relationship between agent and client. Agents formerly used to devote much of their time to marketing and selling products to new clients. Now, clients are increasingly obtaining insurance quotes from a company’s Web site and then contacting the company directly to purchase policies. This interaction gives the client a more active role in selecting their policy, while reducing the amount of time agents spend actively seeking new clients. Insurance sales agents also obtain many new accounts through referrals, so it is important that they maintain regular contact with their clients to ensure that the clients’ financial needs are being met. Developing a satisfied clientele that will recommend an agent’s services to other potential customers is a key to success for agents.
Increasing competition in the insurance industry has spurred carriers and agents to find new ways to keep their clients satisfied. One solution is to increase the use of call centers, which usually are accessible to clients 24 hours a day, 7 days a week. Insurance carriers and sales agents also are hiring customer service representatives to handle routine tasks such as answering questions, making changes in policies, processing claims, and selling more products to clients. The opportunity to cross-sell new products to clients will help agents’ businesses grow. The use of call centers also allows agents to concentrate their efforts on seeking out new clients and maintaining relationships with old ones. (See elsewhere in the Handbook the statements on customer service representativesand claims adjusters, appraisers, examiners, and investigators.)
Work environment. Insurance sales agents working as captive agents are usually based in small offices, from which they contact clients and provide information on the policies they sell. Independent insurance agents, or brokers, may work in offices of varying sizes, depending on the size of the agency. However, much of their time may be spent outside their offices, traveling locally to meet with clients, close sales, or investigate claims. Agents usually determine their own hours of work and often schedule evening and weekend appointments for the convenience of clients. Some sales agents may meet with clients during business hours and then spend evenings doing paperwork and preparing presentations to prospective clients. Although most agents work a 40-hour week, some work 60 hours a week or longer.
Training, Other Qualifications, and Advancement
Every sales agent involved in the solicitation, selling, or negotiation of insurance must have a State issued license. Licensure requirements vary by State but typically require some insurance-related coursework and the passing of several exams. Although some agents are hired right out of college, many are hired by insurance companies as customer service representatives and are later promoted to sales agent.
Education and training. For insurance sales agent jobs, many companies and independent agencies prefer to hire college graduates—especially those who have majored in business or economics. High school graduates may be hired if they have proven sales ability or have been successful in other types of work.
College training can help agents grasp the technical aspects of insurance policies as well as the industry fundamentals and operational procedures of selling insurance. Many colleges and universities offer courses in insurance, and a few schools offer a bachelor’s degree in the field. College courses in finance, mathematics, accounting, economics, business law, marketing, and business administration enable insurance sales agents to understand how social and economic conditions relate to the insurance industry. Courses in psychology, sociology, and public speaking can prove useful in improving sales techniques. In addition, familiarity with computers and popular software packages has become very important because computers provide instantaneous information on a wide variety of financial products and greatly improve agents’ efficiency.
Agents learn many of their job duties on the job from other agents. Many employers have their new agents shadow an experienced agent for a period of time. This allows the agent to learn how to conduct their business, how the agency interacts with clients, and how to write policies.
Employers also are placing greater emphasis on continuing professional education as the diversity of financial products sold by insurance agents increases. It is important for insurance agents to keep up to date on issues concerning clients. Changes in tax laws, government benefits programs, and other State and Federal regulations can affect the insurance needs of clients and the way in which agents conduct business. Agents can enhance their selling skills and broaden their knowledge of insurance and other financial services by taking courses at colleges and universities and by attending institutes, conferences, and seminars sponsored by insurance organizations.
Licensure. Insurance sales agents must obtain a license in the States where they plan to work. Separate licenses are required for agents to sell life and health insurance and property and casualty insurance. In most States, licenses are issued only to applicants who complete specified prelicensing courses and who pass State examinations covering insurance fundamentals and State insurance laws. The insurance industry is increasingly moving toward uniform State licensing standards and reciprocal licensing, allowing agents who earn a license in one State to become licensed in other States more easily. Most State licensing authorities also have mandatory continuing education requirements focusing on insurance laws, consumer protection, ethics, and the technical details of various insurance policies.
As the demand for financial products and financial planning increases, many insurance agents, especially those involved in life insurance, are choosing to gain the proper licensing and certification to sell securities and other financial products. Doing so, however, requires substantial study and passing an additional examination—either the Series 6 or Series 7 licensing exam, both of which are administered by the National Association of Securities Dealers (NASD). The Series 6 exam is for individuals who wish to sell only mutual funds and variable annuities, whereas the Series 7 exam is the main NASD series license that qualifies agents as general securities sales representatives.
Other qualifications. Previous experience in sales or insurance jobs can be very useful in becoming an insurance sales agent. In fact, many entrants to insurance sales agent jobs transfer from other sales related occupations, such as customer service representative positions. In selling commercial insurance, technical experience in a particular field can help sell policies to those in the same profession. As a result, new agents tend to be older than entrants in many other occupations.
Insurance sales agents should be flexible, enthusiastic, confident, disciplined, hard working, and willing to solve problems. They should communicate effectively and inspire customer confidence. Because they usually work without supervision, sales agents must be able to plan their time well and have the initiative to locate new clients.
Certification and advancement. A number of organizations offer professional designation programs that certify agents’ expertise in specialties such as life, health, and property and casualty insurance, as well as financial consulting. For example, The National Alliance for Education and Research offers a wide variety of courses in health, life and property, and casualty insurance for independent insurance agents. Although voluntary, such programs assure clients and employers that an agent has a thorough understanding of the relevant specialty. Agents are usually required to complete a specified number of hours of continuing education to retain their designation.
In the area of financial planning, many agents find it worthwhile to demonstrate competency by earning the certified financial planner or chartered financial consultant designation. The Certified Financial Planner credential, issued by the Certified Financial Planner Board of Standards, requires relevant experience, completion of education requirements, passing a comprehensive examination, and adherence to an enforceable code of ethics. The exam tests the candidate’s knowledge of the financial planning process, insurance and risk management, employee benefits planning, taxes and retirement planning, and investment and estate planning.
The Chartered Financial Consultant (ChFC) and the Chartered Life Underwriter (CLU) designations, issued by the American College in Bryn Mawr, Pennsylvania, typically require professional experience and the completion of an eight-course program of study. Many property and casualty insurance agents obtain the Chartered Property Casualty Underwriter (CPCU) designation, offered by the American Institute for Chartered Property Casualty Underwriter. The majority of professional designations in insurance have continuing education requirements.
An insurance sales agent who shows ability and leadership may become a sales manager in a local office. A few advance to agency managerial or executive positions. However, many who have built up a good clientele prefer to remain in sales work. Some—particularly in the property and casualty field—establish their own independent agencies or brokerage firms.
Insurance sales agents held about 436,000 jobs in 2006. Almost 50 percent of insurance sales agents work for insurance agencies and brokerages. About 23 percent work directly for insurance carriers. Although most insurance agents specialize in life and health insurance or property and casualty insurance, a growing number of “multiline” agents sell all lines of insurance. A small number of agents work for banks and securities brokerages as a result of the increasing integration of the finance and insurance industries. Approximately 26 percent of insurance sales agents are self employed.
Insurance sales agents are employed throughout the country, but most work in or near large urban centers. Some are employed in the headquarters of insurance companies, but the majority work out of local offices or independent agencies.
Employment of insurance sales agents is expected to grow about average for all occupations through 2016, and opportunities will be favorable for persons who are college graduates and who have sales ability, excellent interpersonal skills, and expertise in a wide range of insurance and financial services.
Employment change. Employment of insurance sales agents is expected to increase by 13 percent over the 2006-16 period, which is about as fast as average for all occupations. Future demand for insurance sales agents depends largely on the volume of sales of insurance and other financial products. Sales of health insurance and long-term-care insurance are expected to rise sharply as the population ages. In addition, a growing population will increase demand for insurance for automobiles, homes, and high-priced valuables and equipment. As new businesses emerge and existing firms expand their insurance coverage, sales of commercial insurance also should increase, including coverage such as product liability, workers’ compensation, employee benefits, and pollution liability insurance.
Employment of agents will not keep up with the rising level of insurance sales, however. Many insurance carriers are trying to contain costs and are shedding their captive agents—those agents working directly for insurance carriers. Instead carriers are relying more on independent agents or direct marketing through the mail, by phone, or on the Internet.
In many ways, the Internet should not greatly threaten agents’ jobs as was widely thought. The automation of policy and claims processing is allowing insurance agents to take on more clients. Most clients value their relationship with their agent and still prefer discussing their policies directly with their agents, rather than through a computer.
Insurance and investments are becoming more complex, and many people and businesses lack the time and expertise to buy insurance without the advice of an agent.
Job prospects. Multilingual agents should have good job prospects because they can serve a wider range of customers. Additionally, insurance language tends to be quite technical, so agents who have a firm understanding of relevant technical and legal terms will also be desirable to employers. Many beginning agents fail to earn enough from commissions to meet their income goals and eventually transfer to other careers. Many job openings are likely to result from the need to replace agents who leave the occupation or retire, as a large number of agents are expected to retire over the next decade.
Agents may face increased competition from traditional securities brokers and bankers as they begin to sell insurance policies. Insurance sales agents will need to expand the products and services they offer as consolidation increases among insurance companies, banks, and brokerage firms and as demands increase from clients for more comprehensive financial planning.
Independent agents who incorporate new technology into their existing businesses will remain competitive. Agents who use the Internet to market their products will reach a broader client base and expand their business. Agents who offer better customer service also will remain competitive. Carriers and agencies are increasingly using call centers in an effort to offer better service to customers because they provide greater access to clients’ policies and more prompt services.
Most individuals and businesses consider insurance a necessity, regardless of economic conditions, so agents are not likely to face unemployment because of a recession.
Projections data from the National Employment Matrix
The median annual earnings of wage and salary insurance sales agents were $43,870 in May 2006. The middle 50 percent earned between $31,640 and $69,180. The lowest 10 percent had earnings of $24,600 or less, while the highest 10 percent earned more than $115,090. Median annual earnings in May 2006 in the two industries employing the largest number of insurance sales agents were $46,210 for insurance carriers, and $42,950 for agencies, brokerages, and other insurance related activities.
Many independent agents are paid by commission only, whereas sales workers who are employees of an agency or an insurance carrier may be paid in one of three ways: salary only, salary plus commission, or salary plus bonus. In general, commissions are the most common form of compensation, especially for experienced agents. The amount of the commission depends on the type and amount of insurance sold and on whether the transaction is a new policy or a renewal. Bonuses usually are awarded when agents meet their sales goals or when an agency meets its profit goals. Some agents involved with financial planning receive a fee for their services, rather than a commission.
Company-paid benefits to insurance sales agents usually include continuing education, training to qualify for licensing, group insurance plans, office space, and clerical support services. Some companies also may pay for automobile and transportation expenses, attendance at conventions and meetings, promotion and marketing expenses, and retirement plans. Independent agents working for insurance agencies receive fewer benefits, but their commissions may be higher to help them pay for marketing and other expenses.
Occupational information about insurance sales agents is available from the home office of many insurance companies. Information on State licensing requirements may be obtained from the department of insurance at any State capital.
For information about insurance sales careers and training, contact:
Independent Insurance Agents and Brokers of America, 127 S. Peyton St., Alexandria, VA 22314. Internet:http://www.iiaba.org
This is an interesting look at the Real Estate industry from the US Bureau of Labor Statistics. Visit their site for more details and facts: http://www.bls.gov/oco/ocos120.htm
Real estate brokers and sales agents often work evenings and weekends and usually are on call to suit the needs of clients.
A license is required in every State and the District of Columbia.
Although gaining a job may be relatively easy, beginning workers face competition from well-established, more experienced agents and brokers.
Employment is sensitive to swings in the economy, especially interest rates; during periods of declining economic activity and rising interest rates, the volume of sales and the resulting demand for sales workers fall.
One of the most complex and significant financial events in peoples’ lives is the purchase or sale of a home or investment property. Because of this complexity and significance, people typically seek the help of real estate brokers and sales agents when buying or selling real estate.
Real estate brokers and sales agents have a thorough knowledge of the real estate market in their communities. They know which neighborhoods will best fit clients’ needs and budgets. They are familiar with local zoning and tax laws and know where to obtain financing. Agents and brokers also act as intermediaries in price negotiations between buyers and sellers.
When selling property, brokers and agents arrange for title searches to verify ownership and for meetings between buyers and sellers during which they agree to the details of the transactions and in a final meeting, the new owners take possession of the property. They also may help to arrange favorable financing from a lender for the prospective buyer; often, this makes the difference between success and failure in closing a sale. In some cases, brokers and agents assume primary responsibility for closing sales; in others, lawyers or lenders do.
Agents and brokers spend a significant amount of time looking for properties to sell. They obtain listings—agreements by owners to place properties for sale with the firm. When listing a property for sale, agents and brokers compare the listed property with similar properties that recently sold, in order to determine a competitive market price for the property. Following the sale of the property, both the agent who sold it and the agent who obtained the listing receive a portion of the commission. Thus, agents who sell a property that they themselves have listed can increase their commission.
Before showing residential properties to potential buyers, agents meet with them to get an idea of the type of home the buyers would like. In this prequalifying phase, the agent determines how much the buyers can afford to spend. In addition, the agent and the buyer usually sign a loyalty contract, which states that the agent will be the only one to show houses to the buyer. An agent or broker then generates lists of properties for sale, their location and description, and available sources of financing. In some cases, agents and brokers use computers to give buyers a virtual tour of properties that interest them.
Agents may meet several times with prospective buyers to discuss and visit available properties. Agents identify and emphasize the most pertinent selling points. To a young family looking for a house, for example, they may emphasize the convenient floor plan, the area’s low crime rate, and the proximity to schools and shopping. To a potential investor, they may point out the tax advantages of owning a rental property and the ease of finding a renter. If bargaining over price becomes necessary, agents must follow their client’s instructions carefully and may have to present counteroffers to get the best possible price.
Once the buyer and seller have signed a contract, the real estate broker or agent must make sure that all special terms of the contract are met before the closing date. The agent must make sure that any legally mandated or agreed-upon inspections, such as termite and radon inspections, take place. In addition, if the seller agrees to any repairs, the broker or agent ensures they are made. Increasingly, brokers and agents are handling environmental problems as well, by making sure that the properties they sell meet environmental regulations. For example, they may be responsible for dealing with lead paint on the walls. Loan officers, attorneys, or other people handle many details, but the agent must ensure that they are carried out.
Most real estate brokers and sales agents sell residential property. A small number—usually employed in large or specialized firms—sell commercial, industrial, agricultural, or other types of real estate. Every specialty requires knowledge of that particular type of property and clientele. Selling or leasing business property requires an understanding of leasing practices, business trends, and the location of the property. Agents who sell or lease industrial properties must know about the region’s transportation, utilities, and labor supply. Whatever the type of property, the agent or broker must know how to meet the client’s particular requirements.
Brokers and agents do the same type of work, but brokers are licensed to manage their own real estate businesses. Agents must work with a broker. They usually provide their services to a licensed real estate broker on a contract basis. In return, the broker pays the agent a portion of the commission earned from the agent’s sale of the property. Brokers, as independent businesspeople, often sell real estate owned by others; they also may rent or manage properties for a fee.
Work environment. Advances in telecommunications and the ability to retrieve data about properties over the Internet allow many real estate brokers and sales agents to work out of their homes instead of real estate offices. Even with this convenience, workers spend much of their time away from their desks—showing properties to customers, analyzing properties for sale, meeting with prospective clients, or researching the real estate market.
Agents and brokers often work more than a standard 40-hour week. They usually work evenings and weekends and are usually on call to respond to the needs of clients. Although the hours are long and frequently irregular, most agents and brokers have the freedom to determine their own schedule. They can arrange their work so that they have time off when they want it. Business usually is slower during the winter season.
Training, Other Qualifications, and Advancement
In every State and the District of Columbia, real estate brokers and sales agents must be licensed. Prospective agents must be high school graduates, be at least 18 years old, and pass a written test.
Education and training. Agents and brokers must be high school graduates. In fact, as real estate transactions have become more legally complex, many firms have turned to college graduates to fill positions. A large number of agents and brokers have some college training. College courses in real estate, finance, business administration, statistics, economics, law, and English are helpful. For those who intend to start their own company, business courses such as marketing and accounting are as important as courses in real estate or finance.
More than 1,000 universities, colleges, and community colleges offer courses in real estate. Most offer an associate or bachelor’s degree in real estate; some offer graduate degrees. Many local real estate associations that are members of the National Association of Realtors sponsor courses covering the fundamentals and legal aspects of the field. Advanced courses in mortgage financing, property development and management, and other subjects also are available.
Many firms offer formal training programs for both beginners and experienced agents. Larger firms usually offer more extensive programs than smaller firms do.
Licensure. In every State and the District of Columbia, real estate brokers and sales agents must be licensed. Prospective brokers and agents must pass a written examination. The examination—more comprehensive for brokers than for agents—includes questions on basic real estate transactions and laws affecting the sale of property. Most States require candidates for the general sales license to complete between 30 and 90 hours of classroom instruction. To get a broker’s license an individual needs between 60 and 90 hours of formal training and a specific amount of experience selling real estate, usually 1 to 3 years. Some States waive the experience requirements for the broker’s license for applicants who have a bachelor’s degree in real estate.
State licenses typically must be renewed every 1 or 2 years; usually, no examination is needed. However, many States require continuing education for license renewals. Prospective agents and brokers should contact the real estate licensing commission of the State in which they wish to work to verify the exact licensing requirements.
Other qualifications. Personality traits are as important as academic background. Brokers look for agents who have a pleasant personality, honesty, and a neat appearance. Maturity, good judgment, trustworthiness, and enthusiasm for the job are required to attract prospective customers in this highly competitive field. Agents should be well organized, be detail oriented, and have a good memory for names, faces, and business particulars. They must be at least 18 years old.
Those interested in jobs as real estate agents often begin in their own communities. Their knowledge of local neighborhoods is a clear advantage. Under the direction of an experienced agent, beginners learn the practical aspects of the job, including the use of computers to locate or list available properties and identify sources of financing.
Advancement. As agents gain knowledge and expertise, they become more efficient in closing a greater number of transactions and increase their earnings. In many large firms, experienced agents can advance to sales manager or general manager. People who earn their broker’s license may open their own offices. Others with experience and training in estimating property value may become real estate appraisers, and people familiar with operating and maintaining rental properties may become property managers. (See the Handbook statements on property, real estate, and community association managers; and appraisers and assessors of real estate.) Experienced agents and brokers with a thorough knowledge of business conditions and property values in their localities may enter mortgage financing or real estate investment counseling.
In 2006, real estate brokers and sales agents held about 564,000 jobs; real estate sales agents held approximately 77 percent of these jobs.
Many real estate brokers and sales agents worked part time, combining their real estate activities with other careers. About 61 percent real estate brokers and sales agents were self-employed. Real estate is sold in all areas, but employment is concentrated in large urban areas and in rapidly growing communities.
Most real estate firms are relatively small; indeed, some are one-person businesses. By contrast, some large real estate firms have several hundred agents operating out of numerous branch offices. Many brokers have franchise agreements with national or regional real estate organizations. Under this type of arrangement, the broker pays a fee in exchange for the privilege of using the more widely known name of the parent organization. Although franchised brokers often receive help in training sales staff and running their offices, they bear the ultimate responsibility for the success or failure of their firms.
Average employment growth is expected because of the increasing housing needs of a growing population, as well as the perception that real estate is a good investment. Beginning agents and brokers face competition from their well-established, more experienced counterparts.
Employment change. Employment of real estate brokers and sales agents is expected to grow 11 percent during the 2006-16 projection decade—about as fast as the average for all occupations. Relatively low interest rates and the perception that real estate usually is a good investment may continue to stimulate sales of real estate, resulting in the need for more agents and brokers. However, job growth will be somewhat limited by the increasing use of technology, which is improving the productivity of agents and brokers. For example, prospective customers often can perform their own searches for properties that meet their criteria by accessing real estate information on the Internet. The increasing use of technology is likely to be more detrimental to part-time or temporary real estate agents than to full-time agents because part-time agents generally are not able to compete with full-time agents who have invested in new technology. Changing legal requirements, such as disclosure laws, also may dissuade some who are not serious about practicing full time from continuing to work part time.
Job prospects. In addition to job growth, a large number of job openings will arise from the need to replace workers who transfer to other occupations or leave the labor force. Real estate brokers and sales agents are older, on average, than are most other workers. Historically, many homemakers and retired people were attracted to real estate sales by the flexible and part-time work schedules characteristic of the field. These individuals could enter, leave, and later return to the occupation, depending on the strength of the real estate market, their family responsibilities, or other personal circumstances. Recently, however, the attractiveness of part-time real estate work has declined, as increasingly complex legal and technological requirements are raising startup costs associated with becoming an agent.
Employment of real estate brokers and sales agents often is sensitive to swings in the economy, especially interest rates. During periods of declining economic activity and rising interest rates, the volume of sales and the resulting demand for sales workers falls. As a result, the earnings of agents and brokers decline, and many work fewer hours or leave the occupation altogether.
This occupation is relatively easy to enter and is attractive because of its flexible working conditions; the high interest in, and familiarity with, local real estate markets that entrants often have; and the potential for high earnings. Therefore, although gaining a job as a real estate agent or broker may be relatively easy, beginning agents and brokers face competition from their well-established, more experienced counterparts in obtaining listings and in closing an adequate number of sales.
Well-trained, ambitious people who enjoy selling—particularly those with extensive social and business connections in their communities—should have the best chance for success.
Being a solid broker takes more than just knowing where your office is, having crisp business cards, and a good hand shake. It means being knowledgable about your craft. It means helping your clietns better understand what it is you are selling. It means you offer value, beyond the specifics contained within the lines of the contract.
Listed below are the top 10 resources I could find for consumers on insurance.
Onward and upward!
Insurance Information Institute
Improving public understanding of insurance—what it does and how it works.
National Association of Insurance Commissioners
The mission of the NAIC is to assist state insurance regulators, individually and collectively, in serving the public interest and achieving the following fundamental insurance regulatory goals in a responsive, efficient and cost effective manner, consistent with the wishes of its members: Protect the public interest;
Promote competitive markets;
Facilitate the fair and equitable treatment of insurance consumers;
Promote the reliability, solvency and financial solidity of insurance institutions; and
Support and improve state regulation of insurance.
A.M. Best Insurance agents, brokers, financial advisors, banks and other insurance professionals utilize Best’s Financial Strength Ratings to determine an insurer’s financial strength.
In recent years, ratings have also become increasingly important in helping consumers themselves make decisions on which insurers to buy coverage from, whether it be to protect their lifestyle or their future financial well being.
Best’s Ratings provide an independent third-party evaluation to help determine the ability of an insurer to fulfill its financial obligations with regard to life, homeowners and other insurance products to you — the policyholder. Our rating process subjects all insurers to the same rigorous criteria, providing a valuable benchmark for comparinginsurers.
Not all of the insurers you find on our site are assigned a Best’s Financial Strength Rating. For those insurers that participate in our interactive rating process, the following scale outlines the ratings and descriptions assigned to them. View our online video explaining this rating scale.
California Department of Insurance
The Consumers’ Overview section is designed to provide useful information to the public. This section includes resources to assist in making informed decisions regarding insurance related issues. While specifically written for California consumers, many topics can be utilized by all.
Health Insurance Info The Georgetown University Health Policy Institute has written “A CONSUMER GUIDE FOR GETTING AND KEEPING HEALTH INSURANCE” for each state and the District of Columbia — fifty-one in all. These Consumer Guides are available at this web site and will be updated periodically as changes in federal and state policy warrant.
As a trade body, the ABI does not regulate insurers or mediate in disputes. But we do want to help our members’ customers. On these pages you will find information about your options if you are dissatisfied with the treatment you have received from your insurer along with links to those who can hear your complaints.
The official business link to the U.S. Government
The following websites provide a wealth of guidance to help you make informed decisions when buying insurance. Make sure you visit your state’s office of insurance. State governments regulate the insurance industry, and provide a number of services to consumers and small business owners.
Wikipedia Insurance, in law and economics, is a form of risk management primarily used to hedge against the risk of a contingent loss. Insurance is defined as the equitable transfer of the risk of a loss, from one entity to another, in exchange for a premium, and can be thought of as a guaranteed and known small loss to prevent a large, possibly devastating loss. An insureris a company selling the insurance; an insured or policyholder is the person or entity buying the insurance. The insurance rate is a factor used to determine the amount to be charged for a certain amount of insurance coverage, called the premium. Risk management, the practice of appraising and controlling risk, has evolved as a discrete field of study and practice.
Nearly every state has variations in their requirements of continuing education. Variations include amount of hours needed, mandatory courses, filing fee variances and more. Some states require proctored exams for many of their professional certificates and continuing education credits. The actual tests and testing styles may vary from company to company and from site to site, so ultimately, it is up to the individual to discover what works best for them. Cost, location, availability, and test format all play a role. Some testing centers have an “open house” or review opportunity such that individuals are able to research how the center administers their course work and to provide a general feel for the center.
For specific questions on the laws and regulations that your state requires, it is encouraged that you contact your governmental department for details.
Continuing Education Journal provides this content as a courtesy for informational purposes only. Continuing Education Journal nor its employees warrant or represent that this information is correct and all information is subject to change.
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