Debunking 6 common myths about real estate agents

Debunking 6 common myths about real estate agents

Peter Kim
November 24, 2023

Having been in the business of real estate for over 10 years, we've realized that many people have the wrong idea about what real estate agents really do. In this article, we will debunk the six most common myths about real estate agents:

  1. Real estate agents are rich.
  2. Agents can make money whenever they want.
  3. Agents keep the entire commission.
  4. Agents have a lot of time.
  5. Agents don’t have a lot of overhead.
  6. Agents don’t do a lot of work.

If you want to know the truth about what real estate agents do, how much they make, and what they have to do, continue reading.

Myth #1: Real estate agents are rich.

It’s easy to think that real estate agents must make a lot of money since their commissions are typically a percentage of the cost of the home, and homes can be very expensive these days. However, data from the U.S. Bureau of Labor Statistics says otherwise.

According to the U.S. Bureau of Labor Statistics, the median real estate agent’s salary across the United States in May 2022 was $49,980. The best-paid 25% of agents made $78,240 that year, and the worst-paid 25% of agents made $29,130.

Basically, most real estate agents do not make a fortune, as some people would suggest. It turns out that agents who make millions of dollars in the industry represent a very small percentage.

You might be thinking, “Wait, what about real estate brokers? Don't they make a lot of money?”.

According to the U.S. Bureau of Labor Statistics, the median real estate broker’s salary across the United States in May 2022 was $62,190.

It’s more money, but not that much more.

Myth #2: Agents can make money whenever they want.

It’s not that simple. To ensure that agents are able to continuously generate income, they need to continuously market themselves.

Also, a real estate agent's pay is dependent on whether they successfully help a client sell or buy a home.

A seldom-known fact is that, as a real estate agent, you must work with your clients for days, weeks, months, or even years with no guarantee of a successful sale.

Basically, agents face the challenge of waking up each day essentially unemployed, engaging in ongoing job interviews with potential clients, and navigating a landscape that includes frequent rejection.

Myth #5: Agents keep the entire commission.

Agents do not keep the entirety of the commission when a house is sold. Part of the commission will always go to the other agent involved.

In most real estate transactions, you are going to have a listing agent representing the seller and a buyer’s agent representing the buyer. When a house is sold, the commissions will be split between the listing agent and the buyer’s agent.

If any agent works for a real estate agency (which is virtually all of them), the commissions can be split even further with their real estate broker and/or teammates, leaving less money for the agent.

Myth #4: Agents have a lot of time.

This is not true. The fact is that real estate agents must commit significant time away from their families and work many long nights.

They frequently sacrifice dinners and weekends and rarely take vacations. Their profession demands continuous, 24/7 commitment. Any break could result in missed opportunities. It’s like being a doctor on call but there are no days or weeks off call.

Myth #5: Agents don’t have a lot of overhead.

Also not true. Real estate agents and brokers, in particular, have lots of upfront expenses that must be paid. On top of that, these fees must be paid even before they get paid themselves.

To illustrate this point, here is a huge list of overhead costs and fees that they must pay:

  • Advertising Fees
  • Multiple Listing Service (MLS) Fees
  • Broker Splits and Fees
  • Showing agent fees
  • National Association of Realtors (NAR) Fees
  • Local Association Fees
  • State Licensing Fees
  • Website domain and hosting fees
  • Office rent and utility fees
  • Employee Salaries (Assistants, Transaction Coordinators, etc.)
  • Office Supplies
  • Electronic Lockboxes
  • Continued Real Estate Education
  • Legal Fees
  • E&O Business Insurance
  • Extended auto insurance
  • Health insurance (if they don’t have a spouse who provides it)
  • Self-Employment Tax
  • Gas income taxes
  • Business Cards
  • Property Flyers
  • Photographers and videographers
  • “For Sale” Yard Sign Costs

Myth #6: Agents don’t do a lot of work.

This is very wrong. As stated earlier, real estate agents sacrifice a lot of time away from family to help their clients.

As you know, an agent is able to represent their clients as a listing agent to sell their homes or a buyer’s agent to help them buy a home and their tasks are many.

Responsibilities as a listing agent.

As a listing agent, real estate agents have numerous tasks that extend beyond just selling a home.

To prove this point, here is a comprehensive list of tasks that they must do as a listing agent:

  1. Prepare a listing presentation for sellers.
  2. Research Sellers Property Tax info.
  3. Research comparable-sold properties for sellers.
  4. Determine the average number of days on the market.
  5. Gather information from sellers about their homes.
  6. Meet with sellers at their homes.
  7. Get to know their home.
  8. Present the listing presentation.
  9. Advise on repairs and/or upgrades.
  10. Provide a Home Seller To-Do Checklist.
  11. Explain current market conditions.
  12. Discuss the seller's goals.
  13. Share your value proposition.
  14. Explain the benefits of your brokerage.
  15. Present your marketing options.
  16. Explain video marketing strategies.
  17. Demonstrate 3D tour marketing.
  18. Explain buyer-seller agency relationships.
  19. Describe the buyer pre-screening process.
  20. Create an internal file for the transaction.
  21. Get the listing agreement and disclosures signed.
  22. Provide seller disclosure forms to sellers.
  23. Verify the interior room sizes.
  24. Obtain current mortgage loan information.
  25. Confirm lot size from county tax records.
  26. Investigate any unrecorded property easements.
  27. Establish showing instructions for buyers.
  28. Agree on showing times with sellers.
  29. Discuss different types of buyer financing.
  30. Explain the appraisal process and its pitfalls.
  31. Verify Homeowners Association Fees.
  32. Obtain a copy of the HOA Bylaws.
  33. Gather transferable warranties.
  34. Determine the need for lead-based paint disclosure.
  35. Verify the security system's ownership.
  36. Discuss video recording devices and showings.
  37. Determine property inclusions and exclusions.
  38. Agree on repairs to be made before listing.
  39. Schedule a staging consultation.
  40. Schedule house cleaners.
  41. Install an electronic lockbox and yard sign.
  42. Set up a photo or video shoot.
  43. Meet the photographer at the property.
  44. Prepare the home for the photographer.
  45. Schedule a drone and 3D tour shoot.
  46. Get the seller's approval of all marketing materials.
  47. Input a property listing into the MLS.
  48. Create a virtual tour page.
  49. Verify listing data on third-party websites.
  50. Have the listing proofread.
  51. Create a property flier.
  52. Have extra keys made for the key locker.
  53. Setup shows services.
  54. Help owners coordinate showings.
  55. Gather feedback after each showing.
  56. Keep track of showing activity.
  57. Update the MLS listing as needed.
  58. Schedule weekly update calls with the seller.
  59. Prepare a “net sheet” for all offers.
  60. Present all offers to the seller.
  61. Obtain a pre-approval letter from the buyer's agent.
  62. Examine and verify buyers' qualifications.
  63. Examine and verify the buyer’s lender.
  64. Negotiate all offers.
  65. Once under contract, send it to the title company.
  66. Check that the buyer's agent has received copies.
  67. Change the property status in the MLS.
  68. Deliver contact or addendum copies to the seller.
  69. Keep track of copies for office files.
  70. Coordinate inspections with sellers.
  71. Explain Buyer’s Inspection Objections to sellers.
  72. Determine the seller's inspection resolution.
  73. Get all repair agreements in writing.
  74. Refer trustworthy contractors to sellers.
  75. Meet the appraiser at the property.
  76. Negotiate any unsatisfactory appraisals.
  77. Confirm Clear-to-Close.
  78. Coordinate closing times and locations.
  79. Verify that the title company has all the documents.
  80. Remind sellers to transfer utilities.
  81. Make sure all parties are notified of the closing time.
  82. Resolve any title issues before closing.
  83. Receive and carefully review the closing documents.
  84. Review closing figures with the seller.
  85. Confirm Repairs Have Been Made.
  86. Resolve any last-minute issues.
  87. Attend the seller's closing.
  88. Pick-up Sign and Lock Box
  89. Change the status in MLS to “Sold.”
  90. Close out the seller's file with the brokerage.

Responsibilities as a buyer's agent.

As a buyer’s agent, real estate brokers, you guessed it, also have numerous tasks that extend beyond just helping a buyer buy a home.

Here is a comprehensive list of tasks they must do as a buyer’s agent:

  1. Schedule time to meet buyers.
  2. Prepare a buyer's guide and presentation.
  3. Meet buyers and discuss their goals.
  4. Explain buyer-seller agency relationships.
  5. Discuss different types of financing options.
  6. Help buyers find a mortgage lender.
  7. Obtain a pre-approval letter from their lender.
  8. Explain What You Do for Buyers as a Realtor
  9. Provide an overview of current market conditions.
  10. Explain your company’s value to buyers.
  11. Discuss earnest money deposits.
  12. Explain the home inspection process.
  13. Educate buyers about local neighborhoods.
  14. Discuss foreclosures and short sales.
  15. Gather the needs and wants of their next home.
  16. Explain the effects of school districts on home values.
  17. Explain Recording Devices During Showings
  18. Make a plan after learning about all of the buyer's objectives.
  19. Create an internal file for the buyer's records.
  20. Send buyers homes within their criteria.
  21. Start showing buyers the home that they requested.
  22. Schedule and organize all showings.
  23. Gather the showing instructions for each listing.
  24. Send the showing schedule to buyers.
  25. Arrive early and prepare for the first showing.
  26. Look for possible repair issues while showing.
  27. Gather buyer feedback after each showing.
  28. Update buyers when new homes hit the market.
  29. Share knowledge and insight about homes.
  30. Guide buyers through their emotional journey.
  31. Listen to and learn from buyers at each showing.
  32. Keep records of all showings.
  33. Update listing agents with buyer’s feedback.
  34. Discuss homeowner associations.
  35. Estimated Expected Utility Usage Costs
  36. Confirm the water source and status.
  37. Discuss transferable warranties.
  38. Explain the property appraisal process.
  39. Discuss multiple offer situations.
  40. Create a practice offer to help buyers prepare.
  41. Provide updated housing market data to buyers.
  42. Inform buyers of their showing activity weekly.
  43. Update buyers on any price drops.
  44. Discuss MLS data with buyers at showings.
  45. Find the right home for buyers.
  46. Determine property inclusions and exclusions.
  47. Prepare a sales contract when buyers are ready.
  48. Educate buyers' on-sales contract options.
  49. Determine the need for lead-based paint disclosure.
  50. Explain home warranty options.
  51. Update the buyer's pre-approval letter.
  52. Discuss loan objection deadlines.
  53. Choose a closing date.
  54. Verify that the listing data is correct.
  55. Review comps with buyers to determine value.
  56. Create and submit a buyer's offer to the listing agent.
  57. Negotiate the buyer's offer with the listing agent.
  58. Execute a sales contract and disclose.
  59. Once under contract, send it to the title company.
  60. Coordinate the Earnest Money Drop-Off.
  61. Deliver copies to the mortgage lender.
  62. Obtain a copy of the seller's disclosure for buyers.
  63. Deliver copies of the contract or addendum to buyers.
  64. Obtain a copy of the HOA Bylaws.
  65. Keep track of copies for office files.
  66. Coordinate inspections with buyers.
  67. Meet the inspector at the property.
  68. Review home inspections with buyers.
  69. Negotiate inspection objections.
  70. Get all agreed-upon repair items in writing.
  71. Verify any existing lease agreements.
  72. Check in with the lender to verify the loan status.
  73. Check the appraisal date.
  74. Negotiate any unsatisfactory appraisals.
  75. Coordinate closing times and locations.
  76. Make sure all documents are fully signed.
  77. Verify that the title company has everything needed.
  78. Remind buyers to schedule utilities.
  79. Make sure all parties are notified of the closing time.
  80. Solve any title problems before closing.
  81. Receive and review the closing documents.
  82. Review closing figures with buyers.
  83. Confirm repairs have been made by sellers.
  84. Perform a final walk-through with buyers.
  85. Resolve any last-minute issues.
  86. Get the CDA signed by the broker.
  87. Attend closing with buyers.
  88. Provide home warranty paperwork.
  89. Give keys and accessories to buyers.
  90. Close Out Buyer’s File Brokerage

Experienced agents will have outsourced a lot of these tasks. However, they still must be available 24/7 and spend a lot of time working to find clients. The point is that the job of the real estate agent is much more work than you think.

Key takeaways

Hopefully, this article sheds some light on the reality of what it means to be a real estate agent.

Here are the key takeaways from the article:

  1. The majority of real estate agents make a humble income.
  2. Agents commit a lot of time to helping their clients.
  3. Agents spend a lot of money to help their clients.
  4. Agents do a lot of work to help their clients.

If you are compelled to support your local real estate agent after reading this article, continue reading below.

How to support your local real estate agent

Supporting your real estate agent doesn't always mean you have to buy or sell with them. There are other simple ways to show your support:

  1. Share one of their listings on your social media.
  2. Refer friends or family to them for their real estate needs.
  3. Allow them to connect you with agents in other areas for broker-to-broker referrals.
  4. Leave a positive comment or review about their services.

These actions will make your agents feel recognized and supported, all thanks to you.

About the Author

Peter Kim

Peter Kim is the owner of Odigo Real Estate Club, a leading real estate agency in the Greater Seattle area that specializes in residential, commercial, and luxury properties. With over 10 years of experience and a team of highly skilled agents, Peter brings a wealth of knowledge and expertise to the real estate space.

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