Almost 5 million homes were sold in the US in 2020. Have you thought about becoming a Realtor in Tennessee? Perhaps you’ve heard you can work when you want, and the sky’s the limit.
Both of these are true, with some caveats. There is plenty of erroneous information online about what happens when you become a Realtor, so the information below might help you make a more enlightened decision about this promising career.
You Can Work Anytime
There’s some truth to this, but it’s more complicated than that. Realtors in Tennessee and other states are essentially small business owners.
Sure, the schedule is somewhat flexible. But every real estate agent who makes a solid living has to put in a lot of hours.
And Realtors who make money have to be available when the home buyers and sellers are. This often means being “on the clock” after 5 p.m. and sometimes until the wee hours.
You Don’t Need a Formal Education
Again, the statement is technically correct but more nuanced. You don’t have to possess a college degree to work as a real estate agent — only 43% of agents have a bachelor’s — but you still need to invest in a real estate education.
The first thing you have to do is take real estate license classes to pass your exam. After you’ve worked for several months, you need to take continuing education classes and learn more about the field.
You’ll Have Steady Income
Many people become Realtors because they don’t like being boxed into a regular 9-to-5 schedule. But there are benefits of being a regular employee, not the least being that you receive a steady paycheck around which you may design the rest of your life.
Most Realtors are paid entirely on commission, and such payments can be few and far between when you’re starting out. Some beginning agents will continue to hold down a part-time job to make ends meet.
However, you also can purchase investment properties yourself and use those for passive cash flow. In any case, your income, especially in the beginning, can be sporadic, so keep that in mind.
You Always Make a 6% Commission
Oh, if that were only true! Some sources say the most common real estate commission rate is 5%.
But the amount can depend on many factors, including the price of the home, size, how long it takes to sell, and more. Plus, many home sales involve another agent, in which case you’ll have to split the commission with that person.
Also, don’t forget you will pay your broker a percentage of whatever you sell, and the amount varies according to the brokerage.
Your Travel Costs are Covered
You’ll do a lot of driving when you sell real estate, and your vehicle’s gas and wear and tear costs can be considerable. Unlike when you have a regular job, your travel expenses come out of your pocket.
The most significant expense for many agents is their vehicle costs. So you should be ready to spend thousands a year on fuel, car maintenance, and repairs.
You Get Paid Right Away
If you work as a Realtor for a year or two, you’ll discover it can take months to close a sale. And if anything falls through with the financing, it can take additional weeks or even months to get paid.
You Never Pay For Marketing
Many brokerages will cover the cost of some of your marketing, but you will have to pay for most of your marketing materials. For example, the broker may spring for a basic website, but making that website productive and profitable is mainly going to be up to you.
There’s no doubt that becoming a Realtor in Tennessee can be a fantastic financial move. But you should have as much accurate information about this career as you can before you decide to take that step.