The truth about commission-only
The real estate business is not a get-rich-quick business. It can be a get-rich business but it usually takes years of full-time practice to build a database filled with clients that like them, trust them, refer them and think of them whenever they or one of their friends has a need for a real estate professional.
Resale Realtors earn their income on commission-only and are independent contractors. Real estate agents usually have to pay for all their advertising, business expenses and medical insurance. The key to success in this career long-term is building a client data base filled with “raving fans.” A raving fan is someone that almost acts like a human billboard for the Realtor and constantly tells people about their expertise. The key to success in this career for a new person is hard work, constantly prospecting for clients to help buy or sell a house. This is the hard part of the business because they may not be motivated enough to work 50 hours per week and they may have call-reluctance.
For those Realtors that do make it past those first few tough years and develop a solid business that provides a good income, then the key to getting rich is to hopefully have a spouse that also has a good income and maybe even medical benefits through their employer. Whether the Realtor has a partner or is a single-income household, the real key to getting rich in real estate is remembering that retirement will be self-funded. A Realtor should maximize their SEP-IRA every year and simultaneously invest in real estate as opportunities arise to build a positive cash flow to supplement their IRA and social security income.
While making a very good living in the real estate industry is very possible, it is not a guarantee and definitely requires a great amount of discipline and self-motivation to make it to the top.