I read the other day that Realtors with two years of experience or less earned median incomes of $12,850 last year, according to the National Association of Realtors. (For more details go to:

http://www.rismedia.com/index.php/article/articleview/13478/1/1/).

That is very close to U.S. poverty level of $12,830 for a family of two. Why does this not surprise me?

There is a perception among the geeral public that real estate agents are all millionaires. And, we don't really do much to make all of that money. Just stick a For Sale sign in the ground and an ad in the paper, hold an Open House, and walk away with big bucks!

The reality is very different. First, real estate agents almost always are "independent contractors" which means, among other things, that they don't work for anybody. This applies even for agents associated with big brokers like Coldwell Banker, Century 21, and others. There is no base salary, no expense account, no paid vcacation leave (in fact, no vacation leave at all), no sick leave, no employer paid insurance, etc.

An agent gets paid when they close an escrow. Period! In between times there are dues to pay, overhead expenses (the phone, the car, the gas, the computer, ads, promotions, educational expenses, to name just a few. The commission paid at the close of escrow must be enough to pay all those expenses and leave some left over for mortgage payments, food, and general living expeses.

AND, the agent does not get to keep all that money. In most instances there is at least a four way split, sometimes more if there is a referral involved. The agent gets only one piece of that great big pie. That is, after they close the escrow.

One problem facing newer agents is that first one has to find the clients. It isn't easy. It involves many long hours and a lot of effort. Agents tend to work 7 days a week, and long hours every day. It is not uncommon to meet with a client after the client gets off work, write up an offer, deliver it to the seller's agent (or better still, present it in person to the seller with the seller's agent on hand), egt a counteroffer, rush back to the buyer to get it signed, and then get it back again to the seller's agent. It could easily be midnight or later by the time all this is done, but the next day is another full day, with tours, meetings, inspections, etc. during the regular working day and then meeting with clients after hours.

The good news is that income tends to improve after a few years, as the agent gets known and develops a base of prior clients who can be a source of referrals for new business. But it doesn't happen overnight, and that is probably why the real estate industry has one of the highest dropout rates of any industry I know.

Am I complaining. No, I love what I do and I just happen to be very good at it. I make a comfortable living, but I do work very hard and I earn every penny I make! Just like most of the rest of the world.