New Visitors Privacy Policy Sponsorship Contact Us Media
Baby Boomers Family Green Home and Auto In Critical Condition Just Starting Out Lifestyle Money
- advertisement -
Bankrate.com
News & Advice Compare Rates Calculators
Rate Alerts  |  Glossary  |  Help
Mortgage Home
Equity
Auto CDs &
Investments
Retirement Checking &
Savings
Credit
Cards
Debt
Management
College
Finance
Taxes Personal
Finance

 
Real estate agents: Sink or swim in tougher waters
Page | 1 | 2 | 3 |

"Florida is one of those markets that had 20, 30, 40 percent appreciation. You can't sustain that year after year," says Stevens, who has been in the industry 34 years. Investors have started selling their investments, thereby increasing supply in areas where demand has stayed the same or waned, he says.

- advertisement -

Whether the nation's sales are up or down, peddling real estate means more than hanging out a shingle and putting up "for sale" signs.

Agents encounter fierce competition, making it difficult for some to earn top dollar. On top of that, most real estate agents operate as independent contractors, meaning they run their own small businesses and pay myriad expenses that staff employees don't. And many point to the recent interest rate hikes and a softening housing market as harbingers of an exodus from the profession.

Marketing a must
To make it in this business, agents have to market constantly to compete, says Martha Rooney, a real estate agent in New England. She says the intense competition turns some new agents away from the business.

Real estate agent poll

Rooney has been selling homes for eight years. During her first six months as an agent she grossed $20,000; last year, she pulled in $75,000 before subtracting her expenses -- that's well above average. In 2004, the average gross income for members of NAR was $49,300. And the NAR members spent a median of $8,200 on business expenses, up from $6,900 in 2002.

Rooney's advice: "You have to be creative to get business. A lot of business came through our Web site, and I sent out announcements to everyone I ever knew."

As independent contractors, many agents must market themselves and pay for business cards, postcards, ads and other materials. Whether the industry is at a high or a low point, she spends $864 per year on newspaper ads to keep the business coming.

"We do a lot more than ride around and show people houses," Rooney says.

Then there's the follow-up work.

"You have to be in the background making sure people get their financing done," Rooney says. "I've heard of people having deals fall apart at the closing table. It's bad if you've already spent the commission."

A missing pay stub, an overdrawn bank account, a dip in the credit score on the buyer's part could kill a deal through no fault of the agent.

These factors often weed out agents that aren't up to par, regardless of the market cycle, says NAR's Stevens.

"Twenty percent of Realtors do 80 percent of the business," he says. "It's a real tough, competitive business. The people that understand the business work smart and work hard and make the majority of the money.

"You have to be a self-starter. No one calls you to ask why you haven't punched the clock. If you don't work, you don't make the money."

Call for tougher licensing requirements
Anthony Marguleas, broker and owner of high-end realty firm Amalfi Estates in Los Angeles, thinks the industry shouldn't be spitting out low-producing agents. Instead, it should be harder to become one.

 
 
Next: "It's a tough, tough job to make a living at. ..."
Page | 1 | 2 | 3 |
 
 RESOURCES
What it takes to be a real estate agent
How to choose a real estate agent
5 tips: Selling a house in a buyer's market
 TOP MORTGAGE STORIES
Winner or loser: Mortgage shopper
Winner or loser: Home equity loans
Winner or loser: Auto loans
 

Mortgages
Compare today's rates
NATIONAL OVERNIGHT AVERAGES
30 yr fixed mtg 4.19%
15 yr fixed mtg 3.27%
5/1 ARM 3.36%
Rates may include points
RELATED CALCULATORS
  Calculate your monthly payment  
  How much house can you afford?  
  Fixed or adjustable rate: Which is right for you?  
VIEW ALL  
FINANCIAL LITERACY
Rev up your portfolio
with these tips and tricks.
- advertisement -
- advertisement -

About Bankrate | Privacy Policy/Your California Privacy Rights | Online Media Kit | Partnerships | Investor Relations | Press Room | Contact Us | Sitemap
NYSE: RATE | RSS Feeds |

* Mortgage rate may include points. See rate tables for details. Click here.
* To see the definition of overnight averages click here.

Bankrate.com ®, Copyright © 2014 Bankrate, Inc., All Rights Reserved, Terms of Use.