The Real Estate
Let’s explore how the industry works and what the major jobs and careers are. The Real Estate Industry can be divided into several different areas:
- Development
- Sales and marketing
- Brokerage
- Property management
- Lending
- Professional services (law, accounting, etc.)
Let’s look at each of these six areas of the industry in more detail.
Brokerage
A brokerage is a firm with a team of real estate agents or realtors as employees. The real estate agents help in facilitating a transaction between buyers and sellers of property. One of their jobs is to represent either party and help them achieve the purchase or sale.
Property Management
Property management firms help real estate owners rent out the units in their buildings. Their jobs include collecting rent, showing units, fixing deficiencies, performing repairs, and managing tenants. They charge a fee, typically a percentage of the rent, to property owners.
Real Estate Lending
Lenders play a major role in the industry as virtually all properties and developments use leverage (debt) to finance their business. Lenders can include banks, credit unions, private lenders, and government institutions.
Professional Services
There are a variety of real estate professionals who work in the industry and help make it function. The most common examples (other than the ones listed above) are accountants, lawyers, interior designers, stagers, general contractors, construction workers, and tradespeople.
Development
Real estate development is a process that involves the purchase of raw land, rezoning, construction and renovation of buildings, and sale or lease of the finished product to end users. Developers earn a profit by adding value to the land (creating buildings or improvements, rezoning, etc.) and taking the risk of financing a project. Development firms create a new product, which can be thought of as the “primary market” or generation of new inventory.
Sales and Marketing
Sales and marketing firms work with developers to sell the buildings and units they create. These firms earn a commission for creating all marketing material and using their sales agents to sell the inventory of completed units. These firms typically focus on new units.
