Divorced, Stressed, Broke, Poor Health, but... #1 in Sales!

Real Estate Agent with Big Block Realty 858.232.8722 CA BRE# 01261476

Don't mind me, I'm just thinking out loud...


Would it surprise you if I shared I heard a *true story about a very “successful agent” who Grossed $900,000 in 2016, per his 1099, but her Net was only $135,000 and from that $135K, she still needed to pay the taxes on the $900K?




What if I shared, I know of an *agent that Grossed $300,000 in his 3rd year in the industry, (not bad!) but had no money in the bank, no money to pay the IRS and a wife that was barely hanging on due to his absence (whether he was physically home or not)?


Would it surprise you to know, assuming you believe this stat I heard recently on Super Agents Live Podcast, that *only 2% of the real estate agents in America Net over $200K annually? Many Gross much, much more, but I’m talking Net, what you put in the bank after expenses and after you set aside your taxes due on each check. 




When our brokers announce “This Month’s Top Agents” or at our broker's awards ceremonies, they hand out #1 in GCI (gross commission-able income) or #1 in GSV (gross sales volume) where we get to claim our total gross market value of units sold as a badge of honor: “I sold $33 Million in 2016!” At what cost? Sometimes I watch 12 team members walk to the stage to accept an award for $33 Million in Gross Volume...do the math!


Now this is not sour grapes on my part, I do quite well for myself and I have a wall full of framed certificates that say "I’m wonderful" in my office. I’m just thinking about the potential carrot NAR and our brokers dangle to the public, the recruiting ploys to suck people into this “easy industry with no ceiling”, only to discover "it’s hard work and there’s no floor either."


The barrier to entry into real estate is low; for a few hundred dollars and less than $2,000, a few months of training, only to take test that will serve you, not one day in the trenches; we let people in under this allure of wealth and flexible hours.


Why do we celebrate Gross at the office, when Net is all that matters at home?


Why isn't business training a required class to get your real estate license? Why aren’t licensees trained on being a CEO, COO and most importantly, CFO? This is not a job, you now own a business. These are skills I've learned through my coaching at Buffini & Company. Why don't licensees get trained in money management and keeping more of what they earn as a required prerequisite? Trained to sit down and look at ROI over production and do the math; is this time and expense worth it?


Brian Buffini shared with the audience I was sitting in, that early in his career, he was once asked to sit on a panel after receiving a #1 SoCal or #1 in his company award and share his secrets to success. Brian then, quite candidly shared; afterwords his wife Beverly asked him why they asked him to offer advice to the audience? He said “Well, because I’m #1!” to which Bev replied, “But Brian we’re broke and we can’t pay our taxes?” Brian knew I things had to change and he did change them quite a bit as we see from his success the last 21 years running Buffini & Company


balancing work and family


I’m not bagging on success, wealth or even the trappings of either. I'm working hard for that station in life myself, but I'm bringing my family and personal life along the journey in tact or I'm not making the trip. I'm reminded of that the age old wisdom from:


Mark 8:36 “For what does it profit a man, to gain the whole world, and forfeit his life?


I’m just thinking out loud that we have a very top of line centric industry, but a very bottom line need for the good life. I wish this industry had the NCI Awards: Net Income Awards (after taxes). I wish we celebrated the happiest family awards, the longest-happily-married to a Realtor, the healthiest Realtor, the most joyful Realtor,  the most giving back agent, and so on.

Don’t mind me, I’m just thinking out loud.





*(Stories & Stat from Super Agents Live Podcast-Hosted by Toby Salgado)

-some details tweaked to protect privacy

"Thank you Toby for your call today, your blessings and advice, much appreciated!"-Thomas 3/15/17

Some info is from my notes from many Buffini & Company Trainings too, like Peak Producers

1. Image courtesy of Stuart Miles at FreeDigitalPhotos.net

2. Image courtesy of Sira Anamwong at FreeDigitalPhotos.net

3. Image courtesy of photostock at FreeDigitalPhotos.net

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REALTOR®, CRS, RCS-D, CDPE, ePro, Certified:Military Home Specialist,

Certified: Luxury Home Specialist Podcast Host, Author & Keynote Speaker


Brokered by Big Block Realty

Do You Know The Market Says Your Home is Worth?

CA-BRE# 01261476, since 1999  (My Team)

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Disclaimer:  Nothing in this blog article is to be construed as legal advice, tax advice, medical advice or financial advice.  For legal advice see an attorney.   For tax advice, health or financial advice see a tax attorney, certified public accountant, or other qualified professional.

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John Meussner
Mason-McDuffie Mortgage, Conventional Loans, Jumbo Loans, FHA, 203(k), USDA, VA, - Walnut Creek, CA
#MortgageMadeEasy Walnut Creek, CA 484-680-4852

Lots of people chase those numbers and the image that comes with them, but do so to their own detriment.  In the LO world, it's not uncommon to be amongst the top 1%, and die shortly thereafter.

Mar 15, 2017 02:03 PM #57
Tim Ensley
ActiveRain - Seattle, WA
Director of Advertising

There are companies out there that can help agents with their book keeping to keep them out of hot water with the Mrs, Mr's, IRS & Repo man.  I sat down with the owner of REProphet the other day and it sounds like many people could benefit from this type of a service. Sorry if this sounds too sales pitchy I just read the blog and comments and had his card on my desk!

Mar 15, 2017 02:03 PM #58
Olga Simoncelli
Veritas Prime, LLC dba Veritas Prime Real Estate - New Fairfield, CT
CONSULTANT, Real Estate Services & Risk Management

Sometimes the answer is simple, especially for the newer agents: the large firms consider newbies a "profit center" - drain them with all kinds of fees, knowing the attrition rate is sky high.

Mar 15, 2017 02:04 PM #59
Margaret Goss
Baird & Warner Real Estate - Winnetka, IL
Chicago's North Shore & Winnetka Real Estate

Thomas J. Nelson, Realtor, CRS - Keep thinking like this - love reading your thoughts.

I would add that one way to watch expenses is to . . . check your monthly credit card bill.  I'm someone who didn't do it until tax time and realized I was being charged $50/month for something that I canceled.  Too many times we sign up for some new gadget only to realize it's just a shiny new toy.  Luckily for me, I had the email that proved I had canceled.

Mar 15, 2017 02:11 PM #60
Wayne L. Brown
Franklin Advantage Inc. - Alpine, CA


Excellent post.  Many of us in the Lending Industry face some of the same issues.

After years of being a top producer in loans, I've tried to scale way down to stop and smell the roses as they they say.  

While I still love my work, I refuse to allow my life any longer to be controlled by what's really not that important.  Hindsight as they say is 20-20. Until I woke up, I lost time with my family which can never be recovered.

I just hope that those in our industries could realize this before it's too late.  I almost did, but never again.

Your quote from Mark 8:36 is"Spot On".

Thanks for the post.  I hope it gets the attention it deserves.

Mar 15, 2017 02:50 PM #61
Lyn Sims
RE/MAX Suburban - Schaumburg, IL
Schaumburg IL Real Estate

No that's very true. I know that Mike Ferry used to mention people who made 500K in gross income with 450K in operating costs. Not a very good net income I'd say.

Mar 15, 2017 04:36 PM #63
Dorie Dillard CRS GRI ABR
Coldwell Banker United Realtors® ~ 512.750.6899 - Austin, TX
Serving Buyers & Sellers in NW Austin Real Estate

Good evening Thomas J. Nelson, Realtor, CRS ,

Loved your post because your thoughts out loud are very true. You have to focus on your bottom line when you create your business plan. I know   my bottom line and what it takes to achieve it. So many don't want to hire assistants when it would help balance their work loan and give them a much needed write off..you can give it to Uncle Sam or plan for those  write-offs that help your bottom line and frees you up for a more balance way of living.

Mar 15, 2017 05:07 PM #64
Mary Jo Quay
Remax Results - Edina, MN
I Move You Home

The first broker that I worked with insisted that I buy a company laptop that cost $4000 before I had an income. Two checks were for $000.00, there were undisclosed costs. After that there was a quick good bye.  

The quickest way out of real estate is overspending, and not having reserves. We get hammered with shiny new objects, unpredictable markets, and delayed closings.  It takes a little financial savvy to win the day.


Mar 15, 2017 06:54 PM #65
Joan Whitebook
BHG The Masiello Group - Nashua, NH
Consumer Focused Real Estate Services

Lots of great things to think about.  You raise a lot of good points.  Perhaps all of these things should be recognized.  

Mar 15, 2017 07:59 PM #66
Deborah Ann Spence
Fierce Realty Corp - Philadelphia, PA
Awesome Realtor serving Philadelphia and suburbs!

Great insight! Real Estate is a sales business. Not only do we sell to our clients but our companies sell to us. Just have to be smart about what you purchase and buy into. Be educated and not fall for all the hype. You can be successful and happy selling real estate. I sure am. My success is not measured by an award or gross or net income. My mission is bigger than that.

Mar 16, 2017 06:12 AM #67
Sharon Kowitz
CRS-SRES-ABR-GRI-E-Pro-CREN Fonville Morisey Cary, NC - Cary, NC
Cary, NC Relocation Specialist ~ Buying or Selling

Great post with lots of responses. New agents are open to the "golden bullets" that will make a "million dollars" in your first year. This is a hard job that takes lots of time and care, clients see through agents who bullshit for money vs. agents who work for the best interest of clients. I think a business class on how to handle taxes and reserves is a great idea for new agents! 

Mar 16, 2017 06:30 AM #68
Paul McFadden
Paratex - Seattle, WA
Pest Control, Seattle, WA.

Great point. I've seen many realtors who appear to be living beyond their means. The customer doesn't care. They just want you to sell their house!

Mar 16, 2017 02:11 PM #69
Kasey & John Boles
Jon Gosche Real Estate, LLC - BoiseMeridianRealEstate.com - Boise, ID
Boise & Meridian, ID Ada/Canyon/Gem/Boise Counties

Good stuff.  I've never read a post that was so honest about this topic.  Agents are known for spending lots of money "on their business."  For the first 5 years we were in real estate our tax accountant kept asking if we had any more write offs because he couldn't believe how little money we had spent.  We pay more taxes! But end up with more in the bank and in retirement too.  -Kasey

Mar 16, 2017 06:39 PM #70
James (Jim) Lawson, DBA
DomainRealty.com LLC - Bonita Springs, FL
Broker Associate, RSPS, BPOR, HI & PE

Poor money management is a huge problem in our society and I don't see it improving. I used to teach a college level course in personal finance and cringed at the beginning of the semester when I tested the students to get a sense of their incoming knowledge and associated behaviors. In MHO students should be required to take a personal finance course in middle school and a more advanced one in high school in order to graduate. Unfortunately, the pushback from the business community is a major factor in the production of ignorance in this area that often extends to adulthood; some real estate agents included. 

Mar 17, 2017 12:08 AM #71
M.C. Dwyer
Century 21 Showcase REALTORs - Felton, CA
Santa Cruz Mountains Property Specialist

wow I just stumbled across your post, and couldn't agree more:

"I wish we celebrated the happiest family awards, the longest-happily-married to a Realtor, the healthiest Realtor, the most joyful Realtor,  the most giving back agent, and so on."

Mar 17, 2017 09:00 AM #72
Sheri Sperry - MCNE®
Coldwell Banker Residential Brokerage - Sedona, AZ
(928) 274-7355 ~ YOUR Solutions REALTOR®

I watched a #1 Agent for 5 years straight, in a Top CRE company. He went out on his own and struggled. It happens all the time....If you enjoy what you do and have the support of your family - LIFE IS GOOD!

Mar 17, 2017 09:54 AM #73
Mike and Dawn Lewis
The Lewis Team at Keller Williams - San Diego, CA
The Lewis Team at Keller Williams in San Diego CA


Great post and very true. We've had teams of 20+ agents and our current team is 4 agents. 4 agents is a lot more managable and profitable. Large teams can put up some big numbers but sometimes the managing of the teams and expenses to run them are not woth the bragging rights for large numbers of properties SOLD. A simple more profitable model is what we've learned works best for us.

Thanks for the informative and "real life of an agent" post.


Mar 18, 2017 02:00 PM #74
Sally K. & David L. Hanson
EXP Realty 414-525-0563 - Brookfield, WI
WI Realtors - Luxury - Divorce

To people who undderstand the numbers...gross means zip.....with 10 people who are "staff" and other overhead.....quality of life....whatever anyone considers a "good income" that is not spent on  who you owe...but how you grow is all that matters to some ...and to others...being at the "top of the leader board" even though the IRS is at the top of their "to pay" list...is all that is important.

Apr 13, 2017 04:20 AM #75
Lillie Painia, ABR, NHC, TAHS
Lillie L. Painia, Tri-R Realty Group - Missouri City, TX

Great post Thomas! Thanks for sharing, knowing how to manage your money is very important!

Apr 13, 2017 07:40 AM #76
Cheryl Dukes . . . . . Intown Atlanta
Solid Source Realty, Inc. - Atlanta, GA

Speak, Brother! SPEAK!

Apr 13, 2017 03:45 PM #77
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Thomas J. Nelson, Realtor, ePRO, CRS, RCS-D

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