If you’re wondering about the pros and cons of being a real estate agent, you’re in the right place. We’ll cover the upside, and of course the downside, in our complete guide. Read on to learn more.
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Pros and Cons of Being a Real Estate Agent
A career as a real estate agent offers plenty of rewards and challenges. That doesn’t mean it’s the perfect job for everyone. But if high-income potential, independence, and flexible hours appeal, working as a real estate agent can definitely deliver.
The National Association of Realtors claims more than 1.4 million members. Some members are brokers, appraisers, or other real estate industry professionals besides agents.
But a number like that says clearly that there is something very attractive about the job of real estate agent. The Bureau of Labor Statistics, using a more conservative definition, counted nearly 370,000 real estate sales agents in 2018, plus another 96,000 real estate brokers.
What’s interesting about the BLS estimate is that it forecasts a 7 percent increase in these numbers by 2028. That’s faster growth than the average occupation. It will add another 25,600 agents and 6,800 brokers to the profession’s membership.
If you’re considering becoming part of the growing number of real estate agents, you should be aware of both the benefits and potential disadvantages of working in the field. Below, we’ll dive into the seven pros and cons of a career as a real estate agent.
Pros of Being a Real Estate Agent
The pros of working as a real estate agent make a compelling argument for this as a career choice. They include:
Freedom and Independence
The number one advantage cited by real estate agents is the freedom and independence the job provides. Real estate agents work when they want to or need to, not when an arbitrary schedule says they should.
Agents don’t punch a time clock, have to sit through endless boring staff meetings, or bend to the dictates of a corporate hierarchy. Agents decide themselves how they’ll spend the day – subject, of course, to the needs of their customers.
One of the most tangible benefits of making their own decisions is the ability agents have to work flexible hours. To an agent, 9 to 5 is meaningless. Agents can take off during the day to attend a child’s school event or go to a doctor’s appointment.
If they prefer and find it expedient, they can work through the weekend showing properties to clients. The decision-maker is the agent, nobody else.
Work That Matters
Agents advise people making some of the biggest financial decisions of their lives. The satisfaction of helping a home buyer identify and acquire their dream home or profit-producing investment property is one few other professions offer.
Agents feel this satisfaction again and again as a regular part of business. And that can be a powerful motivator to them to work even more and repeat that gratifying feeling.
As a professional Realtor licensed by the state, and as an expert valued for knowledge about the local real estate market, real estate agents have significant status in their communities.
When they arrive at a party, people will seek them out to get their opinions about real estate matters. These aren’t just opinions, however. You’re helping someone make a lifelong commitment to building equity (or losing it).
As the old saying goes, “with power comes responsibility.” A bad recommendation can hurt someone’s credit and your credit forever. But a good recommendation that makes them money does just the opposite.
Median annual earnings for real estate agents were 26 percent more than the median wage for all workers, according to 2018 figures from the BLS. And while the median agent income of $50,300 was nice, the top 10 percent earned a cool $112,610.
Even better, there is no real upper-income limit for real estate agents. How much can real estate agents earn? Ben Caballero, recognized as America’s top real estate agent, sold $2.27 billion worth of homes – 5,801 properties.
He did this in 2018 alone through his new-home marketing website, HomesUSA.com. While Caballero doesn’t disclose his earnings, a modest 1 percent commission on that sales volume comes to $22.7 million in one year
A corporate ladder-climber can hope for a promotion, but a real estate agent can hope for virtually anything. Caballero’s innovative approach to marketing builder homes has brought him unmatched acclaim and prosperity.
Career opportunities for other agents are likewise limited only by their imaginations. And for less ambitious agents, it’s possible to sell real estate part-time while devoting most of their attention to family, hobbies, or even another job.
Low Barrier to Entry
Despite its appealing independence, prestige and earning power, the career of real estate agent doesn’t require a college degree. Would-be agents can get their licenses with only weeks or months of effort, at a relatively moderate expense, and jump into rewarding careers.
If you’re wondering how much real estate school costs, you’re in luck. We did a piece on just that. Click here to learn about the course options available to you.
Cons of Being a Real Estate Agent
Life isn’t, however, necessarily perfect for real estate agents. Here are some negatives agents report:
Lack of Structure
Successful real estate agents don’t have to be told what to do. They are self-starters who can figure out the next step and take it on their own. People who need lots of structure, to be told where and when to go and what to do, are unlikely to feel comfortable as real estate agents.
Another effect of this lack of structure is irregular hours. Agents don’t work according to a schedule; they work when clients or prospects need them to. That means lots of weekends and evenings spent showing houses, networking, and researching market trends.
Lack of Benefits
Agents typically have no company-sponsored health plan, retirement plan, or other employee benefits. That includes paid vacation, paid sick leave, and expense accounts.
Agents have to plan for their own retirements, get their own health insurance, and finance their own time off. But this isn’t all bad. In fact, you can write off many of your expenses, reducing your taxable income.
An agent is his or her own boss. That can be very freeing, but it doesn’t mean freedom from responsibility. It’s up to the agent – nobody else – to market himself or herself. Individual agents rely on themselves to get listings.
They have to find buyers. They negotiate deals. They complete the paperwork correctly and on time and shepherd deals to closing. Otherwise, they don’t get paid.
Real estate agents can’t count on a paycheck every Friday or on the 15th of every month. They essentially never know when their next payday will arrive. It can be a long dry spell between closings.
And that can be followed by a flurry of sales that leave the agent’s bank accounts overflowing. It takes self-discipline, patience, and careful money management to cope with the unpredictable income of an agent’s life.
And new agents may not make a sale for months in the beginning. They’ll need a nest egg or other source of income to make it to that first closing.
Most agents work more than 40-hour weeks. Of course, it’s a flexible schedule. Much of the work involves socializing and networking to develop contacts and cultivate prospects.
There’s not a lot of heavy lifting involved for many, if not most real estate agents. But the hours can be long. Most agents I know work most nights and weekends. But they’re also the most successful.
The satisfaction agents feel when they’re helping clients with major life decisions often comes with some annoyance. Home buyers facing big choices in an unfamiliar environment can be on edge, emotional, and hard to deal with.
Agents need to be diplomatic and have thick skins. It can be tough to cope with the emotional unpredictability they’re bound to face.
An agent doesn’t need more academic accomplishment than a high school diploma. But getting a license does require some additional education. It can cost hundreds or thousands of dollars and require weeks or months of study, plus passing a challenging exam, to get a license in many states.
Then agents have to complete continuing education and adhere to professional standards of behavior to keep their licenses. But most agents I speak with don’t find the test too difficult, given the proper effort is given to studying.
The Pros and Cons of Being a Real Estate Agent
Countless people have found working as a real estate agent provides a great job with a high level of flexibility, income potential, and satisfaction. While it has some challenges and is not for everybody, real estate agent is a career worth investigating.