7 Myths You Should Know About Your Real Estate Agent

Estimated reading time: 7 minutes
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The general public knows some aspects about the real estate industry in general and more specifically about agents, but many misunderstandings still exist. Let’s take a closer look at the most common myths about real estate agents that simply aren’t true:


MYTH #1 – EVERY LICENSED REAL ESTATE AGENT IS A REALTOR®
Not true! Of the three million licensees, only about half (approximately 1.6 million) are members of the National Association of REALTORS®. What’s the difference between a Real Estate Agent and a REALTOR? It’s a bit like Kleenex® and tissues, but here are a couple differences:

  • As members of this professional organization, REALTORS® pledge to adhere to a comprehensive list of ethical standards, have no official record of unprofessional conduct and must abide by the ongoing standards of the organization.
  • Only REALTORS® can access the Multiple Listing Services (MLS) in their areas. Over 90% of all properties for sale or rent are marketed on the MLS, so using a REALTOR® is to your advantage.

MYTH #2 – AGENTS DON’T HAVE TO WORK VERY MUCH
The average real estate agent works about 30 hours per week, but that average includes the many thousands of agents who don’t work at all or rarely work. The truth is that someone must put in more effort than 40 hours a week in order to be a successful agent. Good agents make themselves available to their clients and customers on a nearly continual basis, including evenings, weekends, and many holidays. This almost always leads to a work week in excess of 40, or even 50, hours per work week.

MYTH #3 – REAL ESTATE AGENTS ARE NOT EDUCATED
Quite the contrary! Did you know that about 31% of all agents hold a bachelor’s degree, 12% have an Associate’s degree, and another 31% have had some college education? By way of comparison, The United States Census Bureau reports that, among the adult population in our country, 23% of them have completed a college degree, 10% have an Associate’s degree, and another 15% have completed some college.

MYTH #4 – IT’S EASY TO BE A REAL ESTATE AGENT
Licensed agents are required to obtain some level of educational achievement prior to receiving their license to practice and that amount varies from state to state. They must also maintain a required minimum of continuing education credits on a regular basis not just to maintain their licenses but also to stay abreast of the latest real estate-related laws and practices. Still, it’s not particularly difficult to get a real estate license. The difficulty, however, is making a career of it in such a large pool of other licensed agents. Between 2013 and 2024, the number of REALTORS® increased each year and now stands at 1.4 million. This makes for stiff competition among agents and a very competitive market in which to earn a living.

MYTH #5 – REAL ESTATE AGENTS ARE PAID A SALARY FROM THEIR BROKER
As a general rule, real estate agents are not paid a salary. Rather, they earn a commission only if and when a transaction has been completed. As independent contractors, agents receive a straight commission from the broker only when a property closes and there are still no 100% guarantees of getting paid. Agents pay almost all of their own expenses, including expenses associated with marketing a listed property.

Note: Recent litigation and rulings have focused on how some agents get paid, specifically those who bring or represent the buyer in a sale. As a result, how a buyer will work with an agent to find a property has changed, and a commission may be due to the agent representing the buyer if not negotiated elsewhere. If you are considering a purchase, please consult with your agent about his/her commission requirements and who will be responsible for paying that commission.

When a property closes, the negotiated real estate brokerage fee is paid from the seller and/or the buyer to their respective agents. This fee is negotiated between the real estate agency representing the seller and the agency representing the buyer, each receiving its share. The listing agent and the buyer’s agent each then receive a percentage of their respective agency’s portion. That means the total brokerage commission is divided among four entities, with any agent receiving just one portion to pay all of his or her expenses. An agent’s share after the agent’s self-employment taxes represents the net income of that agent.

The graphic below illustrates how the commission is divided among the four different entities. Keep in mind this is only one example. Seller commissions or concessions, negotiated percentages between brokers, and broker-agent compensation percentages may vary from what is shown below, but these figures represent some most common percentages.

HOW MUCH DO REALTORS® MAKE?

(Example: $300,000 home sale price, seller agreeing to pay listing brokerage 3% to sell, buyer agreeing to pay buying brokerage 3%, and 75/25% splits between agents and their brokerages.)

The median gross income (before business expenses and taxes) of a real estate agent in 2023 was $69,610. While that represents a slight increase from the previous year, the average public school teacher salary was $73,570, and electricians earned an average of $67,810.

MYTH #6 – REAL ESTATE AGENTS GET KICKBACKS FROM OTHERS
Not only would a kickback be an ethical issue (a violation if the agent is a REALTOR®), but it is also illegal. The Real Estate Settlement Procedures Act (RESPA) prohibits industry kickbacks and requires appropriate disclosures for all business affiliations between the various players, including brokers, lenders, appraisers, and title companies. RESPA was first implemented in 1974 and has had several amendments to it since then, all applying to residential family structures and sales. Decades later, however, the same concepts and rules apply. They may appear outdated and arcane, given the fast-changing world of real estate, but they remain at the core of a well-constructed, above-board real estate transaction that all parties can sign off on.

MYTH #7 – MOST AGENTS HAVE ABOUT THE SAME SKILL SETS
Buying and selling residential real estate usually follows the same process each time. How it is handled by the real estate agents involved in that process, however, varies widely by geography and state regulations. Just as in every profession, agents committed to superior service are a small percentage of the overall agent population. Unfortunately, many people assume that agents have roughly the same skills and generally the same work ethic, making agents basically interchangeable commodities. This could not be further from the truth! There are significant differences in agents’ presentation skills and levels of service to the clients they represent. Simply put, some agents are more responsive to the client’s needs and resourceful in finding creative ways to get their clients to the closing table. This often makes the difference between a successful transaction and a dissatisfied client.

Like every other industry, there are varying levels of success and professionalism. You can always check on an agent’s success or any complaints lodged against that agent by talking to that agent’s broker or looking up their license number with your state’s licensing board. That agent’s broker gains nothing by glossing over or hiding complaints against that agent because that agent’s shortcomings will reflect poorly on the broker as well. As a result, the results of that agent and broker will be reflected in the grades posted either there or on the local MMLS website.

I encourage you to do a similar background check when deciding on the agent to represent you, whether you are the seller or the buyer. As a wise old sage once said, integrity is everything!