Thinking about becoming a REALTOR®? There’s a lot of misinformation out there. Whether you’re new to the real estate world or considering a career shift, it’s crucial to separate fact from fiction. Here are 15 common myths about being a REALTOR® and the truth behind them.
1. REALTORS® Can Set Their Own Schedules
Myth: REALTORS® enjoy complete freedom to set their work hours and take vacations whenever they want.
Reality: While REALTORS® have some flexibility, they must often work around their clients’ schedules. This means evenings, weekends, and long days are common. Unlike traditional freelancers, REALTORS® need to be highly adaptable to meet client needs and ensure their business thrives.
2. REALTORS® Earn a Regular Salary
Myth: A common belief is that REALTORS® receive a steady salary.
Reality: Most REALTORS® earn their income through commissions, not a fixed salary. This means your earnings depend on the number of deals you close. For new agents, it might take time to build a steady income stream, and initial earnings can be inconsistent.
3. Commissions Are Always 6%
Myth: Many think that REALTORS® always make 6% commission on every transaction.
Reality: Commission rates can vary. While 6% is common, the actual rate may be lower, depending on factors like the property’s price and market conditions. The national average commission rate can be closer to 5%.
4. REALTORS® Keep All of Their Commission
Myth: There’s a belief that REALTORS® receive the full commission from each sale.
Reality: Commissions are typically split. They are divided between the listing agent and their brokerage, and if a buyer’s agent is involved, they also take a share. Even within a brokerage, commissions might be further divided if the agent works as part of a team.
5. Travel Costs Are Covered by the Brokerage
Myth: Some assume that brokerages cover all travel expenses for REALTORS®.
Reality: REALTORS® usually pay for their own travel costs, including gas and vehicle maintenance. Industry data shows that vehicle expenses are a significant cost for REALTORS®, so budgeting for these expenses is essential.
6. Payment is Received Immediately After a Sale
Myth: New REALTORS® might expect to get paid as soon as a sale is completed.
Reality: Payments typically take time. REALTORS® usually receive their commission after the closing process, which can be 30 to 60 days after the sale is finalized. Don’t expect immediate payment upon closing a deal.
7. Marketing Costs Are Covered by the Brokerage
Myth: There’s a notion that brokerages will handle all marketing and promotional expenses.
Reality: REALTORS® are generally responsible for their own marketing costs, such as flyers, business cards, and online ads. While brokerages may offer some support, most marketing expenses come out of the agent’s own budget.
8. Getting Rich Quickly is Easy
Myth: Many believe that becoming a REALTOR® is a fast track to wealth.
Reality: Success in real estate usually takes time and effort. New REALTORS® might not see significant earnings right away, and it could take several months to start earning consistently. The idea of quick wealth is more of a fantasy.
9. House Flipping is the Best Way to Make Money
Myth: Flipping houses is often seen as a quick way to earn a profit.
Reality: While house flipping can be profitable, it’s not without risks. Success in flipping requires market knowledge, budgeting skills, and the ability to predict buyer preferences. There’s no guarantee that a flipped property will sell quickly or for a high price.
10. REALTORS® and Real Estate Agents are the Same
Myth: People often use “REALTOR®” and “real estate agent” interchangeably.
Reality: While both roles involve similar tasks, REALTORS® have additional credentials. They are members of the National Association of REALTORS® (NAR), which provides access to exclusive professional resources and a broader network of industry contacts.
11. The Real Estate Market Always Increases
Myth: Some believe that real estate values always rise.
Reality: The real estate market is cyclical and can experience downturns. Historical events, like the 2008 housing crisis, demonstrate that prices can fall. It’s crucial to stay informed about local market trends and avoid assuming that prices will always go up.
12. REALTORS® Receive Kickbacks from Inspectors
Myth: There’s a misconception that REALTORS® might receive kickbacks from home inspectors.
Reality: Accepting kickbacks is unethical and illegal in many states. However, some areas still see such practices, so transparency is important. Ensure that all transactions comply with ethical standards to avoid conflicts of interest.
13. No Further Education is Needed After Licensing
Myth: Some think that once they pass their licensing exam, no more education is necessary.
Reality: Maintaining a real estate license requires periodic renewal and ongoing education. Successful REALTORS® continuously seek to enhance their skills and stay updated on industry changes. Continuing education helps in building expertise and staying competitive.
14. Being Sociable Guarantees Success
Myth: It’s often believed that being outgoing is all you need to succeed in real estate.
Reality: While social skills are beneficial, success in real estate also requires other factors like lead generation, strategic business practices, and client management. Social skills alone aren’t enough; effective networking and client acquisition strategies are essential.
15. All Brokerages Offer the Same Benefits
Myth: New REALTORS® might assume that all brokerages are alike.
Reality: Brokerages vary significantly in terms of resources, support, and commission structures. It’s important to choose a brokerage that aligns with your career goals and offers the resources and support you need. Boutique and national brokerages each have their own advantages, so it’s crucial to find the right fit.
Is Becoming a REALTOR Worth It?
After addressing these myths, you might wonder if becoming a REALTOR® is a good choice. Despite the challenges, many find the profession rewarding. It requires careful planning, budgeting for initial costs, and being prepared for a demanding yet fulfilling career.
With the right approach and dedication, being a REALTOR® can offer the autonomy to run your own business and the potential for significant success.
Feel free to adjust or expand as needed!