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Being A Realtor® Is More Than Pretty Houses; It's Expensive

By
Real Estate Broker/Owner with HomeRome Realty 410-530-2400 311291

Being a Realtor® is more than pretty houses; it's expensive.

When someone comes to me and asks me about getting into Real Estate, I ask what their motivation is. Some people dream of becoming real estate agents and want to work for themselves. They want flexible hours, love looking at houses, and it seems like a glamorous career. But being a REALTOR® is not just about showing pretty houses.

Below are ten costs and expenses associated with the profession. And there are more.

If you are an agent, were you informed of these costs before you took the real estate classes?

 

1. Advertising: REALTORS® are responsible for advertising expenses, including marketing materials, MLS fees, print media, weekly radio shows, etc.

2. Licensing and Dues: REALTORS® must pay their license fees and dues for various professional organizations, such as the National Association of REALTORS® (NAR) and state-level organizations.

3. Continuing Education: REALTORS® must complete continuing education courses each year to maintain their license, which is an additional expense.

4. Seminars and Fees: REALTORS® often attend seminars and conferences to learn about new industry trends and techniques. 

5. Insurance: REALTORS® must carry errors and omissions insurance.

6. Office Supplies and Equipment: REALTORS® are responsible for purchasing all their office supplies and equipment, including postage, printing, computers, etc. 

7. Auto Expenses: REALTORS® must maintain their vehicle, which includes upkeep, gas, and insurance.

8. Signage: REALTORS® are responsible for purchasing and installing signage for their properties, plus the additional riders, i.e., for sale, open house, too late, coming soon, and appointment only

9. Lockbox Fees: REALTORS® must purchase lockboxes for their properties and pay monthly fees.

10. Professional Services: REALTOR® hires professional photographers and website hosts to help market their properties. They also need the services of others like an accountant and bookkeeper to manage their finances and pay for computer updates and cybersecurity measures.

 

 

Being a REALTOR® is not about showing pretty houses and choosing convenient hours to work. This profession has many expenses; those considering it should know all the costs involved. As a self-employed independent contractor, your income directly depends on your sales.

Becoming a REALTOR® is a rewarding and fulfilling career that allows you to help people find their dream homes, make wise investments, and navigate the complex process of buying or selling property. While it requires a lot of time and hard work, the satisfaction of helping clients achieve their goals is truly priceless.

There are costs associated with being a REALTOR® 

Buying or Selling a Home

Call Margaret Rome

 

 

Posted by

Margaret Rome
HomeRome Realty
Broker/Owner/Realtor®

Baltimore, Maryland


Sell Your Home With Margaret Rome

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George Souto
George Souto NMLS #65149 - Middletown, CT
Your Connecticut Mortgage Expert

Margret and no money to pay those expense with until a transaction closes.

Apr 29, 2024 01:01 PM
Margaret Rome Baltimore 410-530-2400
HomeRome Realty 410-530-2400 - Pikesville, MD
Sell Your Home With Margaret Rome

George Souto

That is correct; no funds are available to cover those expenses until the transaction is finalized.

Apr 29, 2024 01:39 PM
Kat Palmiotti
eXp Commercial, Referral Divison - Kalispell, MT
Helping your Montana dreams take root

Yes indeed, real estate professionals do have a lot of costs, and no, none of them were discussed prior to becoming a real estate agent.

Apr 29, 2024 02:15 PM
Margaret Rome Baltimore 410-530-2400

Kat Palmiotti

  I think that slipped everyone's mind. No discussion of that tiny detail with everyone.

Apr 29, 2024 04:36 PM
Andrea Bedard
Thompson Company, REALTORS® 240.593.2860 - Silver Spring, MD
Fluent in Real Estate & German, M.A. ABR ASP CIPS

I was thinking about posting a blog detailing all the expenses that come with being a professional, self-employed REALTOR, Margaret Rome Baltimore 410-530-2400. You beat me to it but I am so glad that it was you :) Self-employment also means no benefits like health insurance or employer contributions to a 401K. Plus all the taxes we get to pay!

Apr 29, 2024 02:29 PM
Margaret Rome Baltimore 410-530-2400

Andrea Bedard,

Please write a post knowing it will be different from mine.  Other expenses not mentioned include your exceptional photography, staging, desk fees, etc. 

Apr 29, 2024 04:49 PM
Michael Jacobs

Andrea Bedard - I agree with the reply by Margaret Rome Baltimore 410-530-2400.  Over the years, ActiveRain has shown me and others that a subject/topic can be explored in different ways by each member.  And sometimes by the same author as with an enhanced perspective.   I look forward to reading your post.  

Apr 30, 2024 03:44 AM
Dorie Dillard Austin TX
Coldwell Banker Realty ~ 512.750.6899 - Austin, TX
NW Austin ~ Canyon Creek and Spicewood/Balcones

Good afternoon Margaret,

Yes there are lots of costs associated with being a REALTOR and Andrea Bedard is right Self-employment also means no benefits like health insurance or employer contributions to a 401K. Plus all the taxes we get to pay!

Apr 29, 2024 02:48 PM
Margaret Rome Baltimore 410-530-2400

Dorie Dillard Austin TX

I think each of us could come up with plenty more expenses. None of us does RE the same way. 

Apr 29, 2024 04:51 PM
Hannah Williams
HomeStarr Realty - Philadelphia, PA
Expertise NE Philadelphia & Bucks 215-820-3376

Margaret Rome Baltimore 410-530-2400  MLS fees are expensive also and must be paid by individual agents every few months as well as IDX fees 

Apr 29, 2024 04:10 PM
Margaret Rome Baltimore 410-530-2400

Good to see you, Hannah Williams

Yes, to MLS and IDX, and the list goes on and on.

Apr 29, 2024 04:55 PM
Ed Silva, 203-206-0754
Mapleridge Realty, CT 203-206-0754 - Waterbury, CT
Central CT Real Estate Broker Serving all equally

And none of that is discussed when a person signs up or the basic classes to get the licenses.

Apr 29, 2024 05:38 PM
Margaret Rome Baltimore 410-530-2400
HomeRome Realty 410-530-2400 - Pikesville, MD
Sell Your Home With Margaret Rome

Good to see you, Ed Silva, 203-206-0754. That part of becoming an agent does not seem to be discussed. 

Apr 29, 2024 05:53 PM
Laura Cerrano
Feng Shui Manhattan Long Island - Locust Valley, NY
Certified Feng Shui Expert, Speaker & Researcher

Thanks for posting! I’ve been getting a lot of insight lately, so thank you for that.

Apr 29, 2024 10:51 PM
Margaret Rome Baltimore 410-530-2400

As always, good to see you, Laura Cerrano 

Apr 30, 2024 10:10 AM
Lew Corcoran
Better Living Real Estate, LLC - East Bridgewater, MA
Real Estate Agent, Home Stager, & Photographer

Thank you for sharing this insightful blog post. You did an excellent job of highlighting these often-overlooked aspects of the profession.

 

However, as you rightly pointed out, the rewards of helping clients find their dream homes and navigate the complex process of buying or selling property can be truly fulfilling. It’s a career that requires dedication, hard work, and a genuine passion for real estate.

Apr 30, 2024 02:14 AM
Margaret Rome Baltimore 410-530-2400

Good to see you, Lew Corcoran 

Thank you for taking the time to write such a nice comment. I just left you a message and look forward to speaking with you. 

 

Apr 30, 2024 10:09 AM
Gwen Fowler SC Lakes & Mountains 864-710-4518
Gwen Fowler Real Estate, Inc - Walhalla, SC
Gwen Fowler Real Estate, Inc.

This time of year is license fees for every little town and county I have listings in.  I think about my listings and this fee is factored in...before you ask for a discount let me count the number of ways I spend commission before I get it.

Apr 30, 2024 04:38 AM
Margaret Rome Baltimore 410-530-2400

Gwen Fowler SC Lakes & Mountains 864-710-4518 How many little towns and counties are you? covering

Apr 30, 2024 10:15 AM
Gwen Fowler SC Lakes & Mountains 864-710-4518

26 little towns with fees from 85-250 and 3 counties, with fees determined by the number of listings you have in each.  Do the math, I did last week. I pay more in these fees than I do to the National, state and Local associations.  LOL  just so I don't have a schedule to keep and I can get my pedicure at a slow time of the week.

Apr 30, 2024 12:39 PM
Nina Hollander, Broker
Coldwell Banker Realty - Charlotte, NC
Your Greater Charlotte Realtor

Oh yes, indeed, Margaret. For many years I've had a page in my listing presentation that explains exactly what it costs me to run my business and support a listing.

Apr 30, 2024 06:42 AM
Margaret Rome Baltimore 410-530-2400

Hi Nina Hollander, Broker  Very few people understand the cost of doing business when you are a Realtor®

 

Apr 30, 2024 10:17 AM
Nina Hollander, Broker

Margaret Rome Baltimore 410-530-2400 including a lot of Realtors, Margaret! :)

Apr 30, 2024 11:17 AM
Kathleen Daniels, Probate & Trust Specialist
KD Realty - 408.972.1822 - San Jose, CA
Probate Real Estate Services

Oh, Miss Margaret Rome Baltimore 410-530-2400 Indeed there are expenses. The bills keep coming in even IF/When the Income is not. 

Apr 30, 2024 07:21 AM
Margaret Rome Baltimore 410-530-2400

Good to see Kathleen Daniels, Probate & Trust Specialist 

This is one business that cannot support you until you have a stream of transactions.

Apr 30, 2024 10:25 AM
Jeff Dowler, CRS
eXp Realty of California, Inc. - Carlsbad, CA
The Southern California Relocation Dude

Margaret:

This is an excellent list of expenses Realtors face and great education. I suspect many entering the profession are not always fully aware of these when getting started. And of course until there is a flow of transaction income there is more going out the door than in.

Jeff

Apr 30, 2024 09:37 AM
Margaret Rome Baltimore 410-530-2400
HomeRome Realty 410-530-2400 - Pikesville, MD
Sell Your Home With Margaret Rome

Jeff Dowler, CRS 

: That's my point. The business cannot support you until you have a stream of transactions. I always ask potential agents if they have the funds to make it through a year with no income. 

Apr 30, 2024 10:22 AM
Carla Freund
Keller Williams Preferred Realty - Raleigh, NC
NC Real Estate Transition & Relocation 919-602-848

Margaret, I worry that so many people aren't told about upfront expenses prior to becoming a Real Estate agent. It really worries me when an agent does an open house form me but can't afford the Open House signs. 

When someone comes to me and asks about becoming an agent, I always suggest having a minimum of 6 months of income to cover their personal expenses plus their RE Expenses. So many people jump in not realizing it will be a while before  you have money to pay the bills. 

Apr 30, 2024 12:37 PM
Margaret Rome Baltimore 410-530-2400
HomeRome Realty 410-530-2400 - Pikesville, MD
Sell Your Home With Margaret Rome

Carla Freund, Good to see you.

How many agents thought they would have an income right away? That is why a high percentage leave the business in the first few years. 

Apr 30, 2024 07:47 PM
Myrl Jeffcoat
Sacramento, CA
Greater Sacramento Realtor - Retired

I was especially fortunate in my first several years as a Realtor in the 1980s.  Then a recession hit Sacramento in the first half of the 1990s, due to four of our military bases being shut down.  Real estate is cyclic.  You're right, Margaret, it's not only about showing pretty houses.

May 01, 2024 08:37 AM
Myrl Jeffcoat
Sacramento, CA
Greater Sacramento Realtor - Retired

CONGRATULATIONS Margaret, on having this blog FEATURED in the Old Farts Clubgroup!  

May 01, 2024 08:37 AM
Doug Dawes
Keller Williams Evolution - 447 Boston Street, Suite #5, Topsfield, MA - Topsfield, MA
Your Personal Realtor®

Good Morning Margaret Rome Baltimore 410-530-2400 

The expenses in running a Real Estate business are not something that is usually discussed and as mentioned there is no money to pay for those expenses until transactions are closed

May 06, 2024 02:13 AM