Why Don't Real Estate Agents Keep the Deals for Themselves?

Question

I read a lot of posts on here that look to understand seller financing. I am starting to grasp why a seller would do it (tax advantages, steady money flow, low risk, etc), but aside from Zillow and Craigslist, a lot of deals are said to be on the MLS.

At the risk of sounding obnoxious, why wouldn't real estate agents simply keep these deals for themselves if they are lucrative and require a low entry point in terms of capital?

Russell Brazil · Answer

I sell 50 homes a year. I buy 1-2 properties a year. There is no way I would have the capacity to buy every deal I sell.

Bob Okenwa · Answer

Not every agent has the capital or interest to invest, and/or they may have inroads to off-market leads that are better deals.

Not to mention there are usually more deals than the average agent can pull for themselves so it's best to share those you cannot close on yourself and try to get a sale from the others.

Account Closed · Answer

It's actually a very honest question. Most real estate agents have terrible credit and they don't make a lot of money. I've bought houses from real estate agents in foreclosure. It can happen to anyone. Here are some stats:

'The Association of Real Estate License Law Officials (ARELLO)(link is external) estimates that there are over 3 million active real estate licensees in the United States."

"The median gross income of REALTORS® was $54,330 in 2021, an increase from $43,330 in 2020."

Almost no realtors make money in the first couple of years, after expenses and advertising.

On a $220,000 property, If you put 20% down ($44,000) and have good credit, your payment at 7% with property tax and insurance is around $1,411 a month.
On a $54,000 a year income that's about the number you'd be approved for - a $220,000 house.

In a lot of the county $220,000 doesn't get you very much

Most people making $54,000 a year have a tough time coming up with $44,000 to put down one time, let alone multiple times

Basit Siddiqi · Answer

Not every agent has the capital to purchase every property.

Joe S. · Answer

For the same reason that branch managers that worked at title companies for 20 plus years don’t.

The same reason closing attorneys don’t.

The same reason general contractors don’t.

The same reason loan officer don’t.

. People get used to doing what they do.

Eliott Elias · Answer

They don't know any better. Most agents have an investor in mind when they find a killer deal and bank on 3% rather than wholesaling or buying it themselves. Most agents I have talked to give me the generic "I don't have the money for it" or "It's just too much risk"

Luka Milicevic · Answer

VERY few agents actually invest. This shocked me when I became an agent. I tried to talk investments with so many agents out there and to my surprise none of them could even run basic numbers and understand basic terms that I was throwing out.

It's truly shocking.

I thought the whole point of being a real estate agent is to be able to invest.

It's truly shocking.

I thought the whole point of being a real estate agent is to be able to invest.

Jose Jacob · Answer

Rule of thumb about RE agents are 20% makes 80% of total income and 80% of the total agents make 20% of the total income. Those 20% of the Agents cannot buy all the properties out there. Most of them are either scared or unqualified.

Mason Hickman · Answer

@Da Shiek Woodard

The deals that buyers are interested in are also oftentimes in a very different "buy box" than what agents are looking for.

Why Don't Real Estate Agents Keep the Deals for Themselves?

Why Don't Real Estate Agents Keep the Deals for Themselves?

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