If you’ve been paying attention to the headlines, many cities across the U.S. are experiencing a shortage of homes for sale and a bevy of buyers competing for what little residential real estate is available. While it may sound like right now could be a golden opportunity for new real estate agents to break into the business and earn a fat commission check, there’s more to the story.
GOBankingRates turned to the experts — meaning agents, real estate agents and brokers who are directly involved in the real estate industry — and found that while the majority do not think that now is a good time to become a real estate agent, some do. However, be prepared to work hard in order to succeed.
“Timing of becoming a real estate agent is more about the person and less about the market,” said Khari Washington, a broker and realtor with 1st United Realty & Mortgage in Riverside, California. “That said, generally this is a tough time to become an agent […] A new agent who understands [the] challenges and creates a plan to go after listings can still succeed. Every market has its challenges, so you have to find your path forward.”
So, if becoming a real estate agent is truly your dream, don’t let what’s going on in the market right now discourage you. Instead, keep reading to find out what challenges lie ahead, and decide if you have what it takes to make it in this career.
Too Many Agents and Not Enough Inventory
“It’s a bit counterintuitive, but the red hot real estate market is actually bad for real estate agents and especially new agents,” said James McGrath, co-founder of the New York City real estate brokerage Yoreevo. “At the end of May, there were 1.23 million homes on the market. At the same time, there are about 1.5 million realtors, so there are fewer homes for sale than realtors to sell them. In other words, there is not much business to go around. The reduction in supply is more
than offsetting price increases, resulting in a smaller pool of commissions being divvied up among more agents.”
Kimberly Zeidner, a realtor with Preferred Real Estate Brokers in Orlando, Florida, agrees that the lack of homes for sale can present a problem for new agents.
“Since there is so little inventory, newer agents are going to have a harder time generating business for themselves,” Zeidner said. “The caveat to this is a person that already has a large sphere of influence.”
So, if you’re a new real estate agent trying to break into the business without any connections, there’s a good chance you will have a very difficult time succeeding among the competition right now.
It’s a Seller’s Market
McGrath also stated that the current market is especially problematic for new agents because they usually start out working with buyers, and it’s very difficult to be a buyer’s agent right now.
“Virtually every property receives multiple offers, so many buyers end up being runner-up over and over again, which is frustrating for the buyers, of course, but also their agents,” McGrath said. “So in short, I do not think it is a good time to become a real estate agent. You will face intense competition for both clients and properties. It is a very difficult market to establish yourself as an agent.”
It’s a Challenging Time To Become a Real Estate Agent
Perhaps Ben Kruger, a luxury residential agent at Hilton & Hyland real estate in Beverly Hills, California, has the most succinct advice for prospective real estate agents: “Jumping in as a new agent right now would be comparable to learning to drive in the fast lane of the freeway. The market is moving quickly, and there’s no time or space to pull the car over and read the manual. Competition for listings is greater than ever. Buyers are seeking seasoned agents to navigate challenges like multiple offers and source off-market listings through established broker relationships. Sellers want to know they have an expert to lean on when complications inevitably arise.”
The bottom line: If all of these challenges sound exciting and you’re ready to dive in and start forging your own path to success, this may be the time for you to become a real estate agent.
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Last updated: Sept. 14, 2021