15 Myths of Being a Realtor And the Truths Behind Them

15 myths of being realtor and truths behind them header image | AgentAdvice.com

Have you just started researching what it takes to become a REALTOR®, and afraid you’ve come across some bad info? Or are you a newly minted real estate agent that wants to make sure you have your facts straight? 

Maybe you’ve heard that you’ll be able to take vacation time whenever you want, or that you’ll be paid right away after making a sale. Sadly, both of these things are not true—or at least don’t tell the full truth. 

Unfortunately, there’s a lot of bad information circulating the internet about the different aspects of being REALTOR®. Making sure you have the right information is crucial to your success. This is true whether you’re just starting your journey down the real estate path, or are at the beginning of your REALTOR® career.

Popular Misconceptions of being a REALTOR®

Some of these myths contain kernels of truth, but none tell the full story on their own. This article debunks 13 myths to help you navigate the minefield of information available online. Along with telling you what’s not true, we’ll also provide you with the real information behind each of these myths. 

 

REALTOR®s are freelancers that can work whenever they want

Woman working in coffee shop

Have you heard that real estate agents can set their own schedule, or take vacations whenever they want? For those of us feeling burnt out at our 9 – 5 jobs, this sounds especially enticing. But the life of a REALTOR®  isn’t exactly the same as that of a typical freelancer or contract worker. 

The truth: Real estate agents and REALTOR®s are more like small business owners. Yes, the schedule is often flexible. But you’ll need to put in the work if you want your business to survive and be successful. While contract workers can decide when they want to work, real estate agents are often at the whims of their clients’ schedules. That might mean working on evenings or weekends, or 10 hour days sometimes. 

 

You’ll be paid a yearly salary

Many people are motivated to become a real estate agent because they hate the confines of their 9 – 5 job. The opportunity to establish your own business can be an appealing reason to consider going into the real estate industry.

But not everyone realizes that real estate agents and REALTOR®s are not paid a yearly salary. 

The truth: Most of your income will come from commissions, especially for new real estate agents. Other sources of income can come from things like investing in property yourself and revenue or stock options. Though not all real estate firms offer opportunities for you to earn residual income. So your income will likely be 100% commission, at least for a while. 

The commission made off of a listing is always 6%

The idea that a real estate agent always makes 6% of the commission on a listing is a common misconception. Make sure you have your facts straight on this one. Especially if you’re considering a career in real estate looking for a listing agent.

The truth: The percentage of commission the REALTOR® makes can be variable. In fact, the Washington Post noted that the national average for real estate agents’ commission was closer to 5% in 2017. The commission a real estate agent makes can depend on the listing price, type of property, anticipated time it will take to sell, etc. 

 

You get to keep all the commission made off a listing

Not only can the commission REALTOR®s make be variable, but they don’t get to keep all of it either. The real percent commission a real estate agent makes also depends on how many ways the commission is split.

The Truth:  The commission will always be split at least two ways—between the listing agent and their broker—but may be split even more. If a buyer’s agent is involved in the sale, they will also get a chunk of the commission. And even if there is no buying agent, the commission may still be split multiple ways if you work with a real estate team. 

 

Your travel costs will be reimbursed

Being a real estate agent actually involves quite a lot of travel. It’s just mostly local. As a REALTOR®, you’ll likely be driving around a lot checking in on different listings, meeting clients to go see properties or stopping by the office. All of these costs can add up quickly. And you may be wondering if you’ll get reimbursed for money spent on gas or public transportation. 

The truth: For REALTOR®s, all day to day travel expenses will come out of your pocket. According to research from the NAR, the “largest expense category for most REALTOR®s was vehicle expenses.” So be prepared to spend a good chunk of change on things like gas and car repair and maintenance.

 

You’ll be paid right away after you make a sale

If you’re considering starting a career as a real estate agent, you may be wondering ‘when exactly do I get paid?’. You may have heard you’ll see a check right away after a sale is made, but this isn’t the case. 

The truth:  After a sale goes through, real estate agents and their brokers have to wait til closing to get paid. This can take up to 30 – 60 days more after the initial sale is made. So if you’re a new real estate agent wondering when you can expect a commission check, it won’t be right after you sign that next deal. 

House key in door

 

You don’t have to pay for your own marketing materials

Real estate agents and REALTOR®s own their own businesses and need materials to help promote that business and make it successful. But similarly to transportation costs, this expense comes out of your own pocket. 

The truth: If you’re hoping your brokerage will pick up the tab for all those custom marketing materials you just bought—it’s not your lucky day. You’ll be responsible for paying for all your own marketing. Including things like video creation and editing, promotional materials, business cards, etc. 

However, many brokerages and your local Board of REALTOR®s will offer support and resources to help you grow your business. 

 

Real estate agents/REALTOR®s get rich quickly

There’s a common myth that being a real estate agent is easy and that you’ll get rich surprisingly quickly. However, (as you may have guessed) this myth is too good to be true. 

The truth: Being a REALTOR® is definitely NOT easy, and few become incredibly successful in their first few years as a real estate agent. All of your income will be commission, at least at first. And it can take up to two months to get a paycheck after making a sale. As a result, most real estate agents don’t end up making any money for the first few months—which is the opposite of getting rich quickly.

 

Flipping houses is the best way to make money

Whether you’re a consumer interested in investing in real estate or a REALTOR® that wants to earn some cash on the side, you might have heard this myth. While flipping houses can be a good way to make money, it doesn’t always work that way. 

The truth: First off, flipping a house can be hard work. It’s also something you have to be good at – i.e. you need to be good at predicting what the market will want. You’ll also need to be good at creating an enviable property on a budget. There’s also no guarantee that the property will sell quickly, or at your desired price. Before purchasing a property with the intention of flipping it, make sure you know what you’re getting yourself into.  

 

Real estate agents and REALTOR®s are the same things

Many people use the terms ‘real estate agent’ and ‘REALTOR®’ interchangeably. But there are a few key differences between them. 

The Truth: While REALTOR®s and real estate agents may perform the same job, REALTOR®s have taken extra steps to earn their title. This involved being a member of their local association of REALTOR®s and joining the NAR. As members of the national organization, REALTOR®s have access to various benefits that real estate agents don’t. For example, they’re plugged into the national network of professional REALTOR®s across the country. There are also multiple savings and discounts REALTOR®s can gain access to through the NAR.  

 

The real estate market will go up forever

Whether you’re a consumer or real estate agent, this can be a dangerous myth to believe. The real estate market will decidedly not ‘go up forever’. The idea that the market will always be willing to pay for real estate, even at crazy high prices, is simply not true. The bursting of the housing bubble in 2008, which led to the Great Recession in 2009, is a perfect example of this. 

The truth: Rather than believing that the housing market will go up forever, it’s a much better idea to take cues from your local real estate market. What do housing prices look like today? Have they been increasing for the past few years? It if seems like they are at a ‘peak’, be wary of purchasing a new property, and assume you’ll be able to sell it for more than you paid for it. Real estate markets can also be cyclical, depending on where you are. 

Your best bet for understanding the ups and downs of the real estate market is to do some research and identify the patterns in your local market. 

 

Do REALTOR®s get kickbacks from inspectors?

One common question home buyers and sellers ask is: ‘do REALTOR®s get kickbacks from inspectors?’. As you probably guessed, the answer is they shouldn’t! 

The truth: The truth is a bit more complicated. Getting any form of incentive or kickback from an inspector is definitely considered unethical in the world of real estate. But regulation can vary across states. Some states have made getting any type of compensation from inspectors illegal. However, this doesn’t always prevent inspectors from giving kickbacks in the form of referral fees to real estate agents. 

 

Once you pass your licensing exam you’ll never need to study again

If you thought your licensing exam was the last test you’ll ever need to take as a real estate agent, think again! 

The truth: To maintain your license, you’ll need to renew it every few years, depending on which state you practice in. For example, real estate agents and brokers in Texas need to renew their licenses every two years, while in California it’s every four years. But successful real estate agents and REALTOR®s go beyond just renewing their license.  They continue learning throughout their career to learn how to: 

  • be a better agent
  • have a more successful business
  • create and leverage their network
  • carve out a specialty for themselves within the industry 

Real estate schools offer prep courses and training programs to help you do this. You can find peer reviews of different real estate schools in your state on AgentAdvice.com

 

If you’re a social person, you’ll be successful!

You may have heard that as long as you’re an extrovert, you’ll be successful in real estate. And while this definitely helps, being a sociable person isn’t the only thing you need to be a successful real estate agent. 

The truth: Being comfortable around people and interacting with them in a friendly way is a must-have if you want to go into real estate. But as a REALTOR®, lead generation is the name of the game. Even if you’re a very social person, you won’t be able to grow your business if you don’t put in the work of finding new clients. The good news is that there are a number of ways real estate agents can generate new leads

 

All brokerages are the same

This last myth is especially important if you’re a new real estate agent looking for their first brokerage or a REALTOR® looking for a new brokerage. All brokerages are definitely not the same. 

The truth: Each brokerage can be different from the next in terms of what types of resources they can offer you, mentorship opportunities, the commission split, the personnel, etc. There’s also a big difference between local, boutique-style brokerages and national brands. Boutique brokerages may not be the best bet for new agents. National brokerages have an established brand and often offer more resources, technology, and support. 

If you’re looking for your first or a new brokerage, AgentAdvice.com has a list of all the questions to ask yourself to figure out which brokerage is the best for you. 

Is Becoming a Real Estate Agent Worth It?

After learning about just how much effort, time, and money it takes to become a REALTOR®, you’re probably thinking “is it still worth it?”. The resounding answer from real estate agents, REALTOR®s, and brokers across the U.S. would be “yes, of course!”. 

If anything, this article should teach you that one of the best ways to set yourself up for success as a real estate agent is to plan ahead. Make sure you have enough money in the bank to last you the first few months of your new career. Budget for transportation expenses. Let your family know that the job will sometimes be demanding on your schedule and personal life. 

At the end of the day, being a real estate agent still has a ton to offer. You’ll get to be your own boss, have your own business, make a name for yourself, and have the opportunity to be incredibly successful.