Real Estate Blog for Buyers & Sellers

The realities of a real estate professional, what it truly means to be a realtor!

November 23, 2024 | Posted by: Michele Cummins

So…You Want to Be a Realtor? Let’s Talk About the Realities

The real estate industry is often glamorized, with portrayals of high earnings and exciting property deals. But the reality of being a realtor is much different—and often alot less glamorous—than what people think. While agents do make a difference in the lives of their clients, and the job of a realtor can be rewarding both personally and financially. their path to success requires alot of hard work, resilience, and an entrepreneurial mindset.

If you’re considering a career in real estate—or simply want to understand more about what realtors really do—let’s break it down. You may be surprised at what you learn!

The Reality: What Realtors Really Earn

Let's start with the basics: how much do realtors actually make?

In 2023, the average income for a full-time realtor was around $31,900, based on working 40+ hours a week. And that’s not a 'part-time' gig—it’s a full-time commitment. Many realtors work well beyond a traditional 40-hour workweek, especially in the early years of their career as they build their client base and reputation.

This income is well below the living wage in many regions, and it doesn’t account for all the overhead costs involved in running a real estate business. Realtors are independent contractors, meaning they don’t get a salary or hourly wage. They only earn money when a transaction closes, and that’s after covering many expenses upfront—sometimes without any guarantee of payment. In other words, they are only paid if they successfully close a sale, and even then, their commission is typically split between multiple parties.

Here’s the kicker: realtors may spend days, weeks, or even months working with a client, only to see the deal fall through. That means hours of work and hundreds or even thousands of dollars spent out of their own pocket (for marketing, staging, gas, paperwork, etc.)—with no guarantee they’ll see a penny in return.

The Cost of Doing Business: Upfront Expenses

Before a realtor even makes a single sale, there’s a significant investment required. While most people know about commission splits (which we’ll get to), there are also a host of other ongoing expenses that agents must cover just to stay in business:

• Broker Splits and Fees: Realtors work under a brokerage, which takes a percentage of their commission for providing resources, broker administration tasks, and support. The typical split can range from 50/50 to 70/30, depending on the arrangement.

• MLS and Association Fees: The Multiple Listing Service (MLS) is essential for listing properties and accessing market data. Realtors pay annual fees for this service, as well as fees for membership in local, regional, and national real estate associations (e.g., CREA, NAR).

• Marketing and Advertising: Realtors spend significant money on advertising listings, whether through online platforms, print materials and/or social media. realtors also cover the cost of staging and photography services. A quality listing requires professional photos, virtual tours, and video content—expenses that add up fast.

• Office Rent and Utilities: If they operate out of a physical office, realtors are responsible for covering rent, utilities, and office supplies.

• Business Insurance and Licensing Fees: Professional liability insurance (E&O insurance) is a must to protect against legal issues, and licensing fees must be paid annually or biannually to stay active as a licensed agent.

• Self-Employment Taxes and Health Insurance: Realtors are considered self-employed, which means they need to set aside 25-30% of their income for taxes. And, unless they’re covered under a spouse’s insurance plan, they also need to pay for their own health insurance.

These expenses—along with other costs such as car insurance, continuing education, transaction coordinators, aassistants—add up quickly. Realtors often cover these costs out of pocket and only get reimbursed after closing a deal. That’s a lot of risk for a commission-based job.

The Listing Agent’s Job: More Than Just Selling a Home

Being a listing agent involves far more than just posting a property and waiting for buyers. There’s a lengthy process involved in preparing a home for sale and handling the logistics of the transaction. Here’s a closer look at what goes into a listing agent’s duties:

1. Preparing for the Listing: A realtor needs to do market research to determine the best price for the property, looking at comparable homes in the area, understanding the market conditions, and advising the seller on necessary repairs or upgrades.

2. Creating Marketing Materials: This includes everything from professional photography, virtual tours, and drone shots to preparing property flyers, online listings, and social media ads. Realtors invest in high-quality marketing materials to showcase the property in the best light, often at their own cost.

3. Coordinating Showings and Open Houses: Realtors schedule and coordinate showings, often on evenings and weekends to accommodate potential buyers. They are also responsible for attending and managing open houses, which may require additional time and effort, sometimes with little to no immediate return.

4. Negotiating and Handling Offers: Once offers start coming in, the listing agent needs to review each one, assess the buyer’s qualifications, and negotiate on behalf of their seller. This requires skillful communication and an understanding of the buyer’s financial position and the seller’s goals.

5. Managing Inspections and Repairs: After a buyer is under contract, the listing agent coordinates inspections and works with the seller to address any issues that arise. Sometimes this involves negotiating repairs or credits for the buyer.

6. Coordinating Closing: Once everything is signed, sealed, and delivered, the listing agent coordinates the closing process—ensuring the deal goes smoothly, reviewing documents, and making sure the seller is ready to transfer ownership.

This process can be emotionally and physically exhausting, and it takes a significant amount of time and effort. It’s not uncommon for listing agents to spend weeks or months working on a property before they see any financial return. And once a sale is made, they typically only keep a percentage of the commission— the commision still needs to be shared with the buyers agent.

The Buyer’s Agent’s Job: Guiding Clients Through the Process

While listing agents manage the seller’s side, buyer’s agents focus on helping their clients find the perfect home. The tasks involved in assisting buyers are just as extensive as those of a listing agent, and they involve a significant amount of hands-on work:

1. Understanding Client Needs: A buyer’s agent spends time understanding their client’s goals, whether it’s finding a starter home or helping them navigate a competitive market. This involves detailed conversations about what the buyer is looking for, including budget, location, and features.

2. Scheduling Showings: Once the buyer’s needs are clear, the agent begins scheduling showings for properties that meet their criteria. Often, this involves coordinating with listing agents, checking availability, and planning out the best route for multiple showings in one day.

3. Researching the Market: A buyer’s agent must have a deep understanding of local markets and neighborhood dynamics, including school districts, property values, and future growth potential. They also help educate buyers on financing options and the pros and cons of different types of loans.

4. Negotiating Offers: Once the buyer selects a property, the buyer’s agent submits offers, often with multiple rounds of negotiation. This requires a good sense of strategy, timing, and market knowledge.

5. Coordinating Inspections and Closing: After an offer is accepted, the buyer’s agent coordinates inspections with listings agents, and works with the buyer’s lender to ensure all financing is in place. chase up all required docuemnts the buyers may need, They also oversee the final walk-through and assist with any last-minute details before closing.

Throughout the process, buyer’s agents also manage emotional stress, provide guidance during difficult decisions, and help the client make informed choices. 

Realtors Are Always On

One of the hardest things about being a realtor is the constant availability required. The market moves quickly, and the right opportunity can slip by if you're not “on” at all times. Realtors work weekends, evenings, and often holidays to accommodate their clients. Even when not showing homes, agents are reviewing listings, attending meetings, and managing transactions behind the scenes. It’s a 24/7 commitment—one that requires flexibility and a strong work ethic.

How You Can Support Your Realtor

If you know a realtor—or have worked with one—there are simple ways you can show support without needing to buy or sell a home:

• Share their listings on social media to help spread the word.
• Send a referral their way if you know someone looking to buy or sell.
• Leave a positive review or testimonial on their website or social media pages.
• Thank them for their hard work and let them know you appreciate their dedication.

These small gestures go a long way in helping realtors feel valued and supported in a career that can be emotionally and financially draining. The real estate business is tough, and every positive word or action can help make a real difference in an agent’s day.

Conclusion

Being a realtor is not for the faint of heart. The long hours, unpredictable income, and high-stakes nature of the job require dedication, hard work, and a true passion for helping others. As I said while the rewards are real—both financial and personal—they come after putting in countless hours and overcoming significant challenges.

If you're considering becoming a realtor, remember that success in this field is about more than just showing homes or closing deals. It's about managing a business, handling rejection, and constantly adapting to changing markets and client needs. It’s a career that requires perseverance, resilience, and an unwavering commitment to your clients' goals. But for those who are up for the challenge, it can also be one of the most rewarding and fulfilling professions.

And finally, remember this: realtors are more than just salespeople. They are problem-solvers, negotiators, and trusted advisors. They help people make life-changing decisions, whether it's finding their first home, selling a cherished property, or navigating a complicated market. So, next time you work with a realtor—or just see one in your community—take a moment to recognize the hard work and dedication they put in behind the scenes.

Being a realtor isn’t easy, but for those who truly love what they do, it’s a calling. And for those who succeed, it’s a journey worth every step!

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