With recent news about REALTORS’ commissions, there are misconceptions about our jobs and how we are paid. People often ask me about our health benefits, 401K programs, paid vacations, personal time off, paid sick days, or perks like company cars. The truth is, we don’t have any of those. Real estate sales is not a 9-5, Monday through Friday, 40-hour-a-week job with weekends and holidays off.
As full-time professional REALTORS, we are self-employed.
Unlike most people’s jobs, we don’t earn a fixed wage or salary or benefits. Our income comes solely from selling homes, and we only get paid when a sale goes through. However, about 10% of sales never close, which means we might not get paid at all for our efforts. We’re affected by economic factors we can’t control, like high-interest rates and low housing inventory. Plus, we have to cover many upfront costs, even if a sale falls through.
Being a full-time REALTOR means relying entirely on home sales for income. We don’t have another job to fall back on if we don’t make a sale. When we list a house for sale, we typically have to pay upfront expenses ranging from $500 to $1,000, and often more. And there’s no guarantee we’ll recover those expenses if the house doesn’t sell.
Like every business, we create a profit and loss statement. That’s why we’re careful not to take on listings or buyers with unrealistic expectations. We invest a lot of unpaid time researching market trends to ensure homes are priced accurately. Our goal is to sell your house quickly so you can move forward with your plans.
Because we are self-employed, there’s no boss or supervisor to give us raises or bonuses based on our performance. If we want to make more money, we have to sell more houses. We’ve missed family dinners, kids’ concerts, or sporting events. Full-time professionals aren’t in the business part-time, to be a professional we are full-time REALTORS. We aren’t in business to look at pretty homes or something to do as a weekend hobby. Sometimes, we have to talk to a lot of people—maybe around 100—to sell just one home.
There aren’t any easy ways to succeed; real estate sales a challenging and often difficult job, that needs full-time commitment, hard work, and lots of effort. But it can be fulfilling and rewarding.
Here are some of our expenses:
- Broker Splits and Fees
- Office rent and utilities
- Computers
- MLS Fees
- National Association Fees
- Local Association Fees
- Errors & Omission Business Insurance
- Legal fees
- Extended Auto Insurance
- Self-Employment Tax
- Social Security tax, double what the average wager earner pays
- State Licensing Fees
- Advertising Fees;
- Yard Signs
- Photographers
- Videographers
- Property flyers
- Showing Service Fees
- Website and Internet Fees
- Assistant’s Salaries
- Showing partners
- Transaction Coordinator
- Office Supplies
- Business Cards
- Networking groups
- Electronic Lockboxes (each electronic lockbox is more than $100 each)
- Required Education
- Auto maintenance including gas.
- Income taxes are not taken out so we need to put that aside around 25-30%.
- Health insurance