Are real estate agents going broke?

NJ (nj) · Member since 2022 · 38 posts · 1 vote

I’m trying to become an agent in the future because of my leverage from knowledge and pure passion for the industry. I keep talking to people like my family and friends about becoming a top producer, but I keep hearing the same comments. Technology in the next 10-50 years will make real estate jobs and agents useless. So would it be worth it to listen to them or take the chance and go for it. None of them actually know much about real estate agents and the industry, so I came to bigger pockets for actual advice. Would it be worth it to work to become a top producing real estate agent or lead a company/business, or just get a degree then job that pays decent-good and invest. I don’t want to live paycheck to paycheck, so what should I do to get into real estate and make good money early? I just want the reassurance that I’m not making a mistake by not going to traditional college and instead takin a more passionate route.

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Account Closed

Investor · Scottsdale Austin Tuktoyaktuk · Member since 2021 · 4k+ posts · 4k+ votes

Quote from @Vashist D.:

Opendoor, Offerpad, Redfin & Zillow are technology companies in real estate and all tried making real estate agents obsolete and lost more money than you can imagine. It didn't work.

Real estate is about sales and relationships. You can't get those with an algorithm.

If you figure out how much you would spend each year on college and invest that amount in real estate instead, you are going to be much farther along to being independently wealthy than going to college. Provided, you make the phone calls necessary and follow through. It isn't hard, it's just discipline.

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Harrison Sharp
Real Estate Broker · DFW · Member since 2015 · 350 posts · 270 votes
3y
Quote from @Vashist D.:

I’m trying to become an agent in the future because of my leverage from knowledge and pure passion for the industry. I keep talking to people like my family and friends about becoming a top producer, but I keep hearing the same comments. Technology in the next 10-50 years will make real estate jobs and agents useless. So would it be worth it to listen to them or take the chance and go for it. None of them actually know much about real estate agents and the industry, so I came to bigger pockets for actual advice. Would it be worth it to work to become a top producing real estate agent or lead a company/business, or just get a degree then job that pays decent-good and invest. I don’t want to live paycheck to paycheck, so what should I do to get into real estate and make good money early? I just want the reassurance that I’m not making a mistake by not going to traditional college and instead takin a more passionate route.

I'll be senile in 50 years...
To answer your question people have always thought this. Its not as easy as it looks to replace agents just ask Opendoor. I have been an agent for the last 2.5 years and have made around 3x more in those 2.5 years than the first 6 years of my working career combined. Worth it? 100%. I also love what I do and am able to help other people build up their net worth.
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Craig Janet
Member since 2019 · 223 posts · 261 votes
3y
I have bought multiple properties using a realtor and I'm still not sure what value they bring. When I see a property I'm interested in on Zillow, I call my realtor. He meets me at the house, i give him an offer to submit, we settle on a price, then my lawyer/loan officer takes care of the closing. Then show up to lawyers office sign papers, I get the keys and the realtor gets a check. So basically all he did was open the door and submit and offer for a nice commission. I could have easily done this myself but it's not allowed.
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John Duston
Accountant · Santa Barbara, CA · Member since 2016 · 213 posts · 66 votes
3y
@Vashist Dhanani
A few years ago I went to a local event that had a panel with three tech people and the head of the largest brokerage in town. She, the broker, wiped the floor. The tech has a very long way to go and buying a home is a very emotional charged decision.
As a CPA, I hear all the time that my role is becoming obsolete with the likes of TurboTax. Those who say that know nothing of my business or how I'm leveraging the same exact technology to improve my business. I think you'll get naysayers in any industry and will find a way to continue.
That said, I'm hearing from a lot of agents who are struggling to get deals right now
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Darius A.
Member since 2021 · 25 posts · 25 votes
3y
Becoming a real estate agent has a low barrier to entry and the field as been flooded the last few years with free money and housing prices rising significantly. I'm not suggesting one way or the other, but I'll leave you with two thoughts:
1) just b/c you love real estate does not mean you need to make it a career
2) with rising rates, sales slowing and a flood of new construction hitting the market, it's possible the next few years in RE will look very different than the last decade
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Joseph Cuomo
Specialist · New York, NY · Member since 2016 · 25 posts · 3 votes
3y
@Vashist Dhanani
You can make amazing commission at the company I’m with in the solar industry which works hand and hand with the real estate industry. Average commission is $7,000 with us unlike most others and you can make half of that in your first 3 training deals while just observing a trainer close the deal for you. I see you’re interested in potentially building a sales team too and that’s very possibly with us as many are doing it to earn residual income with great numbers. The real estate market is slow and a huge crash is very close, yet the solar industry is helping homeowners tremendously right now by lowering utility costs and virtually eliminating an electric bill that is bound to rise with inflation this winter and on average rises 4% every year anyway. PM me if interested. You can use the money you earn to invest in your real estate aspirations.
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Account Closed
PA · Member since 2010 · 339 posts · 168 votes
3y
Don’t pay attention to those who say college is a waste of time and money. It isn’t—go to college. The exact degree doesn’t matter as much as people say. It might be good to minor in business, though, because it will give you a foundation on the global and domestic economies and and many aspects of management, finance, logistics... There are degree programs in real estate, as well.
Go commercial.
Relevant work experience with good pay could be with a real estate developer, lender, salary positions at large RE firms, law, accounting or even biophysics (me).
If you are on biggerpockets, you are interested in your own investment properties. Again, go commercial. I do it as a side gig and have done better than some and not as well as others.
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Jay HinrichsBusiness Member
Real Estate Consultant · Summerlin, NV · Member since 2014 · 45k+ posts · 66k+ votes
3y
Quote from @Vashist D.:

Quote from @Michael Plante:

No one here or anywhere knows what the future will bring
it’s 1 course and a bunch of studying. Just do it and get with the agency that is doing the most deals Volunteer to be a free assistant with the most successful agents. Learn to do what they do
I'll try to get experience as a volunteer during high school, since I can't drive what else could I do besides being an agents side kick? And if I want to work what jobs would give me the skills needed? I am willing to be working just for experience no money involved so what can I do?

work the phones as an appointment setter for a high producer they can pay your for this
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Cheryl MackPro Member
Real Estate Agent · Wake Forest NC · Member since 2017 · 40 posts · 26 votes
3y
@Vashist Dhanani: an algorithm can list a property and schedule tours. It can even estimate property value. An algorithm cannot weigh all factors in property value; it can't come up with creative steps in a difficult sale or purchase; and it cannot negotiate. No one sees the value in paying a realtor until a deal gets complicated.
One thing I have heard in the past 2 years is the possibility of a move toward buyer and seller each paying their portion of the commission. In my opinion this will be a good move, but will cause upheaval for awhile.
Seriously, being a Real Estate agent can position you to find and negotiate good deals for clients or yourself. The others who suggest you can earn your fortune there are right. College, if desired, can come later when you need a business degree.
Do just what the others say; get David Greene's books on realtor work and follow his process; you'll be impressed with where you are in 3 years.
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Chris Soignier
Real Estate Broker · North Richland Hills, TX · Member since 2013 · 1k+ posts · 607 votes
3y
Last month was my best month ever. This month will be my 2nd best, and both beat all prior months by a wide margin.
Shifts in the market can create a lot of challenges, but they also create opportunity. I think that being a REALTOR will continue to be a great career choice for those who are coachable, willing to work hard, and adaptable to change.
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Russell BrazilBusiness Member
Moderator
Real Estate Agent · Washington, D.C. · Member since 2012 · 17k+ posts · 30k+ votes
3y
Ive been licensed for 19 years. In 2003 people were also saying then that in the next 10-20 real estate agents would be extinct. Guess what....it didn't happen.
The reason is quite simple. Most people are scared of buying and selling a house. Is it that hard? No. But there are tons and tons and tons of details, and screwing up 1 or 2 of them can costs someone tens of thousands of dollars.
But it is important also to note, 87% of people who try their hand at being a real estate agent fail out of the industry altogether. (BTW, thats right in line with the small business failure rate which is 90%). And the median income for an agent is about $45k a year. Top agents make very good livings, because they are really good at what they do. The average agent struggles to eek out a living.
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Tanner Sherman
Real Estate Broker · Omaha, NE · Member since 2020 · 329 posts · 203 votes
3y
There is going to be a lot of agents that don't renew their licenses. Across the county, the market is shifting. Most agents have never experienced a balanced market, they have only experienced a sellers market. In a sellers market, agents just need to woo the seller into letting them list, and then the inflated market takes control and brings in 15 offers over asking with no contingencies with minimal effort from the agent. In a balanced market, both the buyers agent and the sellers agent have to execute a lot more skill to 1. obtain and retain a client, and 2. negotiate a deal. The agents that were successful purely due to the market being so hot will quit, and the truly skilled agents will be immensely successful when the agent pool gets cut in half.
As far as automation goes, there will always be more technological advances that make agents work harder, but even Mcdonalds that is going extremely automated still needs humans to run the business.
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Bruce Lynn
Real Estate Broker · Coppell, TX · Member since 2011 · 5k+ posts · 4k+ votes
3y
You can cut your own hair, but you'll probably have less success in the dating world.
Agents probably still sell 95-98% of the real estate.
Plenty of people think they're experts that go at it alone, but there is plenty of value using a realtor. The right realtor can save you a ton of money and headaches. Haven't seen an online system that does that yet.
I've been hearing the same story for 20 years....that agents will become obsolete....and they're still selling plenty of homes. Technology I think can speed things up, give you more and better information and potentially solve a lot of problems, but it still doesn't take the human element out of the equation at least so far. I love the people who say they don't need an agent and get better deals.....for every 100 that say this or say they'll never buy off MLS, I can probably show you 98 that got their butts kicked....but they'll never admit that. Often they get taken every which way they can possibly lose, but never know it...and when they find out what happened their heads spin.
How much money did Zillow lose in 2 years buying homes?....because they had awesome data?
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Todor Ialamov
Real Estate Agent · Burlington MA · Member since 2018 · 113 posts · 142 votes
3y
@Vashist Dhanani
If you are passionate about becoming an agent, go for it. If you became a top producer as you state your goal is, you would have plenty of money to invest. As the technology shifts the industry, you will find a way to shift with it. Make sure you buy as many rental properties as possible in the mean time.
Being an agent/investor is the best job ever. Would not change it for anything!
Good luck!
1 Reply
Bud Gaffney
Rental Property Investor · Boston, MA · Member since 2019 · 2k+ posts · 1k+ votes
3y
It depends how good of an agent you are. There's TONS of them, but if you're a 1-2%er then you can crush it.
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Steve Vaughan
Rental Property Investor · East Wenatchee, WA · Member since 2014 · 10k+ posts · 16k+ votes
3y
Like with anything, do a simple cost/benefit analysis. This has low cost and potentially high benefit.

I estimate your timing to be pretty good. There have been more agents than listings in many areas. By the time the 20% or so culling happens, you'll be ready.

Have a specialty. I have a tenant buyer that's a new agent doing great as a bi-lingual first time buyer and investor specialist for instance. She hosts educational classes and is great at reaching young people on social media. Have a focus.
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Account Closed
Denver, CO · Member since 2018 · 127 posts · 97 votes
3y
@Vashist D.
"I don’t want to live paycheck to paycheck, so what should I do to get
into real estate and make good money early? I just want the reassurance
that I’m not making a mistake by not going to traditional college."

I would encourage you to ask yourself, what would make not going to college a mistake to you? And how soon would you find out so you could course correct?

There is no reason you cannot go to college and pursue real estate. To be successful as an agent you will need to know how to read and write legal contracts, manage finances, network and communicate well. Going to university will only help you in these endeavors.

As far as your concern about real estate agents becoming obsolete, I would ask you what you are comparing against? AI and robotics are going to make most jobs of today obsolete no matter what industry you are in. I would focus on how you can create value for people today and take time everyday to learn about new ways to create value for people in the future.
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Caleb Brown
Real Estate Agent · Kansas City · Member since 2018 · 4k+ posts · 3k+ votes
3y
Since you are ready to hustle I'd find an agent or something/someone in the real estate industry to tag along or intern. It can be paid or unpaid. I became an agent at 18 and it's so worth it. It gives me the money, knowledge and ability to invest and sharpen my skills. Running your own business is fun but stressful so make sure you want to go down that path. If you start now by the time you are 25 you'll be in a great place. You can also do side hustles to generate money now, personally I love flipping items to sell(on eBay or FB). With social media and the internet there is so much $$ to be made
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Vashist D.
OP
NJ (nj) · Member since 2022 · 38 posts · 1 vote
3y
Quote from @Caleb Brown:

Since you are ready to hustle I'd find an agent or something/someone in the real estate industry to tag along or intern. It can be paid or unpaid. I became an agent at 18 and it's so worth it. It gives me the money, knowledge and ability to invest and sharpen my skills. Running your own business is fun but stressful so make sure you want to go down that path. If you start now by the time you are 25 you'll be in a great place. You can also do side hustles to generate money now, personally I love flipping items to sell(on eBay or FB). With social media and the internet there is so much $$ to be made
Exactly, but what do most successful agents do when the market crashes, recession, or highly inflating? My parents are saying its in inconsistent and unreliable income, but I think that's false because I'm young and as long as I don't debt or liabilities, I can learn to cope and network to find deals in any scenario.
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Caleb Brown
Real Estate Agent · Kansas City · Member since 2018 · 4k+ posts · 3k+ votes
3y
It is inconsistent and unreliable at first. Took me 3 ish years to have a consistent flow of deals. Successful agents work and stay consistent, it's not rocket science. 20% of the agents do most of the business. The market cycles the question is do you give up? Being hourly sure you'll have a safety blanket but being self employed you can build it and scale it. I would network with agents locally, your parents want what's best for you but can also be negative and not see the whole picture. If you do want to be an agent have a plan, don't wing it. Once you have a plan go to your parents with it that way you can have their support. Most agents fail because they see it as easy money, it's not. Happy to help :)
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Leo R.
Investor · Member since 2021 · 591 posts · 695 votes
3y
@Vashist D. as an investor, I rely on my agent to be part of the due diligence process--and this process is very difficult for technology to replace.
For instance, my agent knows how to spot problems at a property--whether they be structural, plumbing, electrical, neighborhood-related, etc., etc. My agent also knows how to spot value-add opportunities (e.g.; an opportunity to add an extra BR, etc.).
No piece of technology (yet) knows how to walk through a property and spot these types of problems and opportunities.
Having said all that, most clients agents work for are not investors, and don't have the same types of expectations. Moreover, most agents don't have the skillset I just described.
So, it might be worth asking yourself: "What services can I provide as an agent that technology cannot provide? ...And what types of clients will want those services?"
Good luck out there!
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Ricardo Hidalgo
Real Estate Agent · Member since 2019 · 569 posts · 257 votes
3y
Quote from @Vashist D.:

I’m trying to become an agent in the future because of my leverage from knowledge and pure passion for the industry. I keep talking to people like my family and friends about becoming a top producer, but I keep hearing the same comments. Technology in the next 10-50 years will make real estate jobs and agents useless. So would it be worth it to listen to them or take the chance and go for it. None of them actually know much about real estate agents and the industry, so I came to bigger pockets for actual advice. Would it be worth it to work to become a top producing real estate agent or lead a company/business, or just get a degree then job that pays decent-good and invest. I don’t want to live paycheck to paycheck, so what should I do to get into real estate and make good money early? I just want the reassurance that I’m not making a mistake by not going to traditional college and instead takin a more passionate route.

I think it depends on the market and price point you are dealing with. For example, developing neighborhoods or luxury properties requires strategy and planning alongside connections to reputable sources that can allocate a quality build. It is harder to establish the values of these properties since some may be custom or offer unique distinctions that average property may be not embody. I think the process will be quicker and more efficient but I feel when investing over 6-7 figures of capital, guidance and reassurance is needed.
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Jermaine Morgan
Flipper/Rehabber · Member since 2021 · 8 posts · 4 votes
3y
@Vashist Dhanani well I’m both a college grad and a Realtor. 1) I barely made $30,000 annually working in my degree field. I played basketball in college but still managed to rack up student loans that I have not paid back. 2) I became a realtor to make more money; which I did. I’ve made over 6 figures the past few years. 3) This is the most important part: I was smart with the money I made. Instead of buying Gucci ans Prada, I began investing in real estate (flipping homes & buying rentals). I also paid off all on my wife’s and my consumer debt. I’m working on building more passive income so we can survive no matter what happens in the market.
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James Wise
Real Estate Broker · Cleveland Dayton Cincinnati Toledo Columbus & Akron, OH · Member since 2013 · 30k+ posts · 20k+ votes
3y
Quote from @Vashist D.:

I’m trying to become an agent in the future because of my leverage from knowledge and pure passion for the industry. I keep talking to people like my family and friends about becoming a top producer, but I keep hearing the same comments. Technology in the next 10-50 years will make real estate jobs and agents useless. So would it be worth it to listen to them or take the chance and go for it. None of them actually know much about real estate agents and the industry, so I came to bigger pockets for actual advice. Would it be worth it to work to become a top producing real estate agent or lead a company/business, or just get a degree then job that pays decent-good and invest. I don’t want to live paycheck to paycheck, so what should I do to get into real estate and make good money early? I just want the reassurance that I’m not making a mistake by not going to traditional college and instead takin a more passionate route.

Nationally something like 88% of agents fail annually. So generally speaking, yes most agents are going broke. However, if you're a top producer, you can make millions. Being an agent is like most any other business. It's about how good you are at it.
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