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December 24, 2009

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Home » Business » Real Estate

Working long hours for home deals

SIX days a week, Hank Liu, a 27-year-old real estate agent, is in his office on Changning Road by 9am and rarely gets home earlier than 9pm.

For nearly two years, the Hubei Province native hasn't been able to kick back and enjoy a lazy weekend in his small, rented apartment in Putuo District, which he shares with a colleague from Fujian Province. It's an industry routine all realtors face: sacrificing Saturdays and Sundays because most potential home buyers are out scouring the market on weekends.

"Competition among the city's property agencies has always been intense, and we've been accustomed to working more than 72 hours per week," said Liu, who came to the city in 2005, initially as a salesman for a food company. Liu jumped into real estate about three years ago, mainly lured by the money-making prospects of a booming property market.

Among the city's realtors, who fluctuate in number between an estimated 70,000 and 100,000, more than 60 percent, like Liu, are non-Shanghai natives, industry people say.

"Unlike many other industries in which a college degree is usually a prerequisite for decent jobs and salaries, the real estate industry has comparatively lower thresholds, making it a magnet for less educated people from other provinces," said Henry Wang, a senior branch manager at Shanghai Centaline Property Consultants Ltd, operator of the city's largest brokerage chain.

Wang, a Shanghai native, said all realtors at his branch on Taopu Road in the northwestern district of Putuo are from other provinces.

For agents like Liu, who has a high school education and whose principal salary comes from commissions, working both harder and smarter seems the only road to success.

"It's true that working 12 hours a day, six days a week is physically demanding, but what's even more challenging in this job is figuring out how to improve efficiency and secure more and bigger deals in head-to-head competition with rival agencies," Liu said.

Real estate agents are a relatively new industry in Shanghai. They began popping up on the scene in the 1990s, when government policy started to shift from company or government-provided housing to a market where people were encouraged to buy their own homes.

The industry took off in 2005 when the housing market boomed. At that time, there were about 20,000 property agencies in the city. The current number of licensed agencies is estimated at up to 15,000, according to Shao Minghao, head of research at Shanghai Hanyu Property Consulting Co Ltd, one of the top three brokerage chains in the city in terms of market share.

Trust is key

"For property agencies, it's always the people who compete," Shao said. "It's hard for home buyers or sellers to tell the difference between, say, the largest and the third-largest agency names. They just trust the realtor whom they deem trustworthy and competent."

In most cases, it takes about six months for a greenhorn to qualify as a real estate agent. The training is mostly on-the-job experience while some big property agencies will also offer some intensive training courses.

At Hanyu, for example, required training courses include real estate basics, client development and customer relations, according to Shao.

However, breaking out of the pack and becoming a top flight real estate agent requires strenuous effort, and sometimes a lot of luck, because of the cut-throat competition. In any given month, as many as 30 percent of local agents may go without securing a single sales deal, industry veterans said.

Liu said he seals about 20 deals a year - average performance compared with his colleagues.

"I do take some training courses organized by the company and they are helpful, especially for beginners," Liu said. "But that's obviously not enough to help you outperform your counterparts. You need more than that. You need blood, sweat and tears to succeed."

There are, of course, little tricks to the trade. A savvy realtor who doesn't want to appear intrusive usually waits until after 7pm on work days to phone a client at home. People are often impressed by such courtesies, Liu said.

There are just no easy times for real estate agents. When the property market is booming, competition for deals gets fiercer. When the market is dropping, jobs are at jeopardy.

"The real estate industry is closely related to the economic cycles, so the chance of losing one's job is pretty high for brokers," Liu said.

A property agency that fails to break even for three consecutive months is at risk of going belly-up. In 2008, when the global economic crisis hit and Shanghai's real estate market soured, up to 30 percent of the city's property agencies were shuttered, industry people said.

However, it's all go, go, go again. Shanghai's property market has rebounded significantly since the second quarter of this year, beating all expectations.

Sales of existing properties are expected to more than double from last year in both volume and value, analysts said.

Latest industry research released by Century 21 China Real Estate, the city's second-largest property chain, reported that prices of existing homes have climbed an average of 38 percent so far this year, with those in the non-central areas posting the biggest increases. Century 21 tracks nearly 200 mid- to high-end residential projects across the city.

"My income this year will no doubt double from 2008 due to the property boom, but it is definitely not good news for me if home prices continue to soar at this pace," said Liu. "High prices reduce home affordability, and that's likely to lead to a contraction in sales."


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