How Much Do Real Estate Agents Really Make?

Why Some Realtors Are Minimum Wage Workers (Part III of IV)

Parts I and II of this series went through a myriad of reasons why being a realtor can relegate you to the ranks of a minimum wage earner. Yes, it's true!

We've discussed flighty clients, out-of-pocket expenses and the starting salary (none - it's commission only). So, what's left? What else can sink you in this line of work? Read on.

Tough Markets: Real estate is heavily dependent on how the economy is doing. One news report about rising interest rates can put buyers in a holding pattern, and drive sellers into a worried frenzy.

Who gets the brunt of this? The real estate agent.

Buyers & The Economy: If the agent is representing a potential buyer, they may put their plans on hold "until the economy gets better."

This is after you've already spent a month working with them: eg, giving up evenings and weekends showing them homes, wasting gas previewing homes to show them, spending hours on the Internet searching for just the right house for them.

One phone call, and all your work has been for naught. They may call you in 3, 4 or six months, or they may have their Aunt Sally represent them when they're ready to buy because "she just got her real estate license."

Sellers & The Economy: Sellers present a whole other set of problems for realtors in a tough economy.

While they are more open to your advice during tough times, they're also more anxious and are likely to snatch a listing out from under you if you don't sell it as quickly as they think it should be sold.

This is somewhat understandable, as many face financial burdens that cause them to have to sell.

So, all the time you've spent advertising a property, showing it, holding open houses, etc. - down the drain.

Business Experience: Or, I should say, lack of. Many real estate agents don't realize how vital it is to treat the profession as a business from the start.

As mentioned in Part I of this series, it is a highly regulated industry where one "mistake" can literally cost you your license.

There are certain laws in place that require you to, for example:

a) hold onto certain paperwork/files for a certain amount of time (a few years);