Jay Thompson is a former brokerage owner who spent six years working for Zillow Group. He retired in August 2018 but can’t seem to leave the real estate industry behind. His weekly Inman column publishes every Wednesday.
Aug. 16, 2004 — I’ll never forget that day. Walking into a Century 21 office in Mesa, Arizona, holding a real estate sales license that was about 30 minutes old, I asked the receptionist if I could speak to the broker.
“What do you need him for?” she politely asked.
Waving the license about, I replied, “I talked to him last week about working here; he said to come back when I passed my test.”
“Congrats! Have a seat over there. I’ll let him know you are here,” she said.
Gripping my license like a kid who had just found a shiny penny, looking around at the activity, I thought to myself, “Well, here we go. A new beginning.”
It felt like I was prepared, like I knew what laid in front of me. Ready for this.
It turns out, I was clueless.
Look around the interwebs, and you’ll find countless articles and op-eds extolling the virtues of becoming a real estate agent: the wonders of self-employment, the unlimited income potential. I mean, just tune into HGTV on any given day, and see how easy it is to be ridiculously successful!
No one seems to opine on why you should not become a real estate agent. So let’s dive in!
1. Million Dollar Listing isn’t reality
True confession: I’ve only watched about 30 minutes of HGTV and other real estate shows during my lifetime. One day long ago, it seemed prudent to tune in and see what all the buzz was about. I found a “reality” show full of pretty people that was 180 degrees from the actual reality.
Don’t get me wrong, I’m a big fan of bad television and have a minor addiction to reality TV. But at least I understand the need for quotes around “reality” TV. You see, it’s not real.
So watch away for entertainment or escape, but do so knowing it’s far from reality. If you think making a living selling real estate is just like it is on television, don’t waste your time getting licensed.
2. What benefits?
If you want benefits, find a new career. Before I went into real estate, I was slinging semiconductors in corporate America. I spent a lot of time closing factories and laying people off when I was in human resources. That sucked, but I had terrific benefits. Medical insurance, paid vacation, sick time, 9-to-5 hours, Monday through Friday — working for the weekend, baby!
I remember the reaction of the first broker I ever talked to before I got licensed when I asked, “What about medical insurance?” She laughed, like a belly laugh. “Oh honey, there’s none of that in this industry. You’re on your own.”
So I did what most new (and experienced) agents do — I went uninsured. Fortunately (or maybe it was just sheer luck), that decision never really came back to bite me. In a strange twist of fate, only four weeks after I started working at Zillow, which has fantastic medical coverage, I had a heart attack. The bills for two operations and four days in cardiac ICU went north of $325,000. Thanks to killer medical coverage, it only cost me $1,500 out of pocket. Without that coverage, I probably would have filed for bankruptcy.
Just yesterday, I applied for health insurance through “the exchange.” Courtesy of the aforementioned heart attack, no private insurer will cover me, so I’ll be paying $1,700 per month, with an $18,000 deductible. Was I a W-2 employee working at a company that subsidizes health coverage, I would have a far more reasonable policy and expense.
If you want or need employment benefits, don’t be a real estate agent.
3. You likely won’t use your education
If you are young and have the delusion most young people have about using your education to work or improve the world, you probably shouldn’t be a real estate agent. There is no package of courses that will make you a better agent. Sure, you can apply some business classes and some marketing classes to better your real estate career. But no degree is going to ensure your success.
And if you think those torturous hours in real estate school are going to teach you how to sell real estate, think again. Real estate school is designed for one thing and only — to get you a passing grade on the real estate licensing exams.
Want to know how many times I needed to know the number of square feet in an acre (43,560, of course) or all about metes and bounds to sell real estate and run a brokerage? Zero, zip, never.
4. Flexible hours aren’t so flexible
“Set your own hours! So much flexibility!” These are the words of real estate schools and brokers trying to recruit you — what a bunch of nonsense.
Yes, you don’t have to punch a time clock in real estate. You do kind of sort of get to set your own hours. It might be easier to escape for an hour or two to see the kids play ball or march in a band.
But if you think a real estate career allows you the ultimate freedom to choose your hours, think again. Guess when buyers want to see homes? When they aren’t working. That means you are working.
Think your phone won’t ring when a buyer or seller flips out at 10 p.m. on a Saturday? Think again.
5. Income uncertainty
Want stable income? If so, the last thing you should pursue is a career in real estate. You don’t get paid until a transaction closes, and sometimes, despite mountains of hard work, transactions fall apart. That seems to happen mostly when you desperately need a paycheck.
Real estate agents effectively wake up every day unemployed. Nothing in escrow? You’re a month away, at minimum, from getting paid. When working a “real job,” you can look at a calendar and highlight paydays a year out. No such luck in real estate.
6. Living in fear is painful
Not knowing when the next bank deposit will come is super stressful. Change is easy to fear, and real estate changes constantly. Too many live in fear that technology, Zillow, discount brokers, iBuyers, fax machines, buyer agency, the government, the National Association of Realtors or some other thing they have no control over is going to ruin their career and crush their hopes and dreams.
If you can’t cope with change or technology, perhaps it’s not a good idea to be in real estate. If you can’t grasp that buying or selling real estate is too personal, expensive, infrequent, emotional and complicated for some app to handle, then you should honestly look elsewhere for work. No one needs that sort of stress in their lives.
7. Hard work is a constant
Should you be opposed to hard work, real estate sales and brokerage is not the place for you. This job isn’t easy; the reasons mentioned above are not a complete list. You’ve got to prospect daily.
You have to talk people off the ledge frequently. You never know where your next client or commission check will come from. You’ve got to pay quarterly income taxes. You get no employment benefits. You wake up every day unemployed. It’s hard.
In return for your hard work, you do get great satisfaction helping others live their dreams. That feeling of handing a buyer the keys to their new home is glorious. Ditto for calling a seller and telling them they’ve sold their home.
There are not many careers where there is a direct correlation between how hard you work and how much you make. Your fellow professionals are some of the best humans on the planet. Real estate isn’t for everyone, but it’s perfect for some. And it can be a remarkable career and life.
So get out there, and make your life and someone else’s incredible.
Jay Thompson is a real estate veteran and retiree living in the Texas Coastal Bend, as well as the one spinning the wheels at Now Pondering. Follow him on Facebook, Instagram and Twitter. He holds an active Arizona broker’s license with eXp Realty. “Retired but not dead,” Jay speaks around the world on many things real estate.