Let’s squash these misconceptions right here, right now, especially for those who are considering a career in real estate.
1. Real estate agents make buckets of money.
Thirty-three percent to broker, 33 percent to IRS quarlterly, 33 percent for expenses and income. Myth: flashy cars, big houses, and steak dinners give people the impression that we are rolling in dough. The truth is, you can make good money in the business if you put the in time and effort. If you are willing to hustle, and truly want the business and success, the money will follow. However, that is true in any business. Whether you are a chef, lawyer, bartender, or medical sales representative—if you work hard the money will come. In all honesty, the six-figure income is not the norm in the real estate business. According to the National Association of REALTORS®, the median gross income of REALTORS® was $42,500 in 2016, which has actually decreased from 2014’s average income of $45,800. In fact, many agents enter the business due to this easy money misconception, and real estate coach Tom Ferry estimates that 87 percent of agents quit within the first five years. Enough said.
2. Real estate is “easy.”
This one makes any successful real estate agent laugh. Most people think we show three houses (thank you House Hunters), write a quick offer, hand out keys and get paid.
Let’s just back up to the showings. The odds of any real estate agent only showing three houses and securing a contract is slim-to-none. Last summer I showed a client 66 houses. That’s right, 66. (I kept track.) And guess what—the house my client ended up choosing was one of the first properties I showed her. She ended up becoming a good friend of mine, so I didn’t mind! But the truth is, it’s not as easy as people believe. One house may be perfect, minus the 30-year-old roof. The next home is completely renovated, but tilted to one side. The last one is exactly what the client is looking for, but $30,000 overpriced with a stubborn seller. Showings aside, we are dealing with multiple personalities, and managing listings, marketing costs, and closing gifts. Agents work around the clock to ensure a paycheck. Bottom line: If it were easy, everyone would be doing it.
3. Real estate agents have flexible schedules and don’t have to work a lot to make money.
The truth is, we do have flexible schedules. We don’t have to be in an office at 9 a.m. and can take vacations or days off without asking permission or taking a paid sick day. However, while that may be the case, if we don’t work, we don’t get paid. Time is money in this business, considering it is a 100 percent commission field. Every minute we are not hustling is another minute spent not making money. Real estate is NOT a 9 to 5 job, with evenings and weekends off. In fact, evenings and weekends are typically our busiest times of the week, considering most of our clients have a 9 to 5 job and are only available for showings and listing appointments at those times.
4. Being a real estate agents doesn’t require any skill.
Let’s just counteract this upfront by saying without the proper skills and training, the success won’t exist. First and foremost, real estate agents must follow a strict Code of Ethics enforced by the National Association of REALTORS®. Should you not have the proper training and education to abide by the Code of Ethics as well as state and federal laws, you can lose your license completely. Aside from the strict rules and regulations of the business, as I mentioned previously, the business is more than just showing beautiful homes and signing a quick contract. You need to be able to understand what a contract says, how to properly fill it out and explain it to the client, how to negotiate a sale and home inspection, arrange title searches, monitor finances, and most importantly, guide buyers and sellers through a very emotional transaction. This requires extensive training, understanding, patience, and education.
The reality is, real estate has its highs and lows. There are definitely glamorous moments, nice paychecks, and beautiful homes. However, without the hard work, proper training, and passion, those things won’t exist. Real estate is not a get rich quick scheme or “easy” career, hence the large percentage of agents that don’t last more than 5 years (many after the first year). Hopefully this clears up any confusion and give you a clearer picture of what you need to do to be a successful agent.
R Donatelli, ABR, SRS, is a top producer at McDowell Homes in Cleveland.