I often get emails and calls from friends that they or someone they know is thinking of becoming a REALTOR. It makes sense to me. I know I love what I do.
In fact, I just read a short article that says being a real estate agent is rated the happiest job in America! But don’t be misled by the smiles on our faces. The failure rate is very high. Here are some quick facts which originated in the National Association of REALTORs member profile for 2012. You might be surprised…
REALTORs with less than 2 years of experience had a median gross income of $9,700…. that’s before expenses, and since REALTORS are independent contractors, not employees, and are paying for every sheet of paper, every computer, all the vehicle expenses and usually all their marketing expenses, that probably means the net income is $0 or less. Yikes.
By contrast, REALTORs with 16 years experience or more had a median gross income of $57,300 (again, before expenses).
The “typical” REALTOR? The typical REALTOR completed 12 transaction sides in a year….and that will probably provide an income in the $30Ks. That doesn’t go far in Northern Virginia.
Remember, not everyone does that well. Did you know that 23% of residential brokerage specialists had no transactions at all? That means they had expenses and no income. You might wonder, if they are actually WORKING how could that happen? Well, there is a tremendous amount of work BEFORE you have clients. Education, self study, networking, marketing, prospecting… LOOKING for work is where most REALTORS fail.
To my friends who say they want to be a real estate agent, my question is typically “Who do you know that in the next 12 months would hire you to help them buy or sell a home?” That’s how many transactions you’re likely to have in the next year, if you’re lucky.
People typically hire agents because they want to benefit from their guidance. A new agent doesn’t have a lot of experience to draw from, which can make it incredibly hard to convince clients to use your services. Even the best of friends may say “I love you, but I have half a million dollars at stake here. I need someone with more experience.”… and you have to be able to deal with hearing that.
I am not trying to discourage you. The good news is that there is no one way to generate business, no one way to operate. There are as many real estate business models as there are personalities. And, for the REALTORS that “make it”, I think that’s what makes us happy.
For me, I get to choose my clients. I choose people I like, and who make me feel appreciated. I get to help them in a time that is very difficult in their lives – even if moving is for happy reasons. And I am blessed that I manage to make enough money that I can support my family doing it. That combination puts me in the group that believes that, indeed, I have the happiest job in America.