Working in Real Estate: My 9 Juiciest Insider Tidbits

Let’s talk about something more fun than America’s rampant financial illiteracy or COVID-19. A couple of friends have requested I share some stories from my time in real estate, and I am nothing if not happy to oblige.

#LIFEHACK #CAREERHACK! Tell me more! Do you have a blog post about your experience working in the real estate industry (I'm assuming it's residential)?

— Flora | Casual Money Talk (@casualmoneytalk) March 8, 2020

I’ve mentioned before my first job out of college was at a real estate firm, where I worked for about 1.75 years before moving on to a better job title and pay. I look back at that time fondly, with the main exception of my horrible manager; she’s basically the American version of Dolores Umbridge and also looks exactly like how she’s drawn. Besides, her, though, it was pretty great. I learned so much about the Boston real estate market and can easily tell you what price points to expect in any Boston neighborhood. This helped out massively when choosing my current apartment, as I spotted the deal a mile away and immediately pounced on it.

Behind the Real Estate Curtain

With that said, as your mole on the inside I’ve seen the good, bad, and ugly of the real estate process. Some things were more relevant to Boston-area real estate that won’t be in other parts of the country. One of the most annoying issues is that some homes are protected by the local historic committees, which means you can’t renovate anything about them. On the surface it’s nice to see some preservation, but this also means some formerly-grand homes will fall into major disrepair because no one’s willing to pour in money for the upkeep.

Here’s a lighter part of the real estate insider world: there are at least two times agents will stage open houses, either on the weekends or during broker’s tours during the week. The weekends are for prospective buyers, and the broker’s tours are for realtors working on behalf of the buyers. Since agents with new houses know they’re competing against others, the smart ones will throw in some amazing food offerings to draw more folks in. One of the brokers I’ve worked with most often would cook amazing homemade sliders for anyone who came to her open houses (and then I got to eat the leftovers). So tasty!

Other than that, here’s a list of the real estate insider stuff you may not know:

1. Yes, the hours are flexible. For the clients, not for the realtors.

In fact, if you may have a very tight schedule that affords you very little leisure. One of the best cases I’ve heard was from a realtor friend showing off different rentals, none of which happened to have working toilets at the time. She didn’t have enough time to get out and do her business before her next appointment, so she ended up making use of the unfinished basement. Yes, it was as gross as you’re thinking. I for one was shocked when she told me about it, but any successful real estate agent can commiserate with the hectic timing that can leave you exhausted at the end of the day.

2. Other realtors can definitely mess up the homebuying process.

I’ve always been struck by how real estate agents are the most outgoing people I’ve ever met in the same profession. I’ve even got a standing invitation to go to a realtor’s house for Easter brunch! The realtors were my favorite part of the overall cushy job. They also find themselves working frequently with other realtors, both those in their own brokerages and outside of them. This makes for a very tight-knit community, and comes with the inherent issues every tight-knit community faces. Namely, if someone decides they dislike you (justified or not) their other realtor friends could shun you and potentially drag out the purchase process.

3. Documentation is super important, but they can screw up even that.

I won’t say which one, but one of the biggest brokerages in the Boston area was found to have shoddy documentation in a surprise audit. Despite real estate being, normally, the biggest purchase of anyone’s life, this brokerage didn’t care enough to keep everything legally proper. Keeping incorrect records can make for a massive horror show if their past buyers and sellers need to use those documents for anything house- or court-related. Whether it was from reluctance to follow procedure or sheer incompetence, the files weren’t up to par and needed to be redone.

After all was said and done, they got fined a cool million dollars. Yes, seven figures. That would’ve sunk the brokerage I worked for, but because of its size they managed to limp away from the punishment. This was all hushed up so it wouldn’t hit the papers and sink their reputation. You best believe, though, that the local RE community knew about it.

Which is to say: make sure you trust your realtor enough to get everything done correctly. You do not want to face a nightmare later on of unclear property records or boundaries making your homeownership questionable in any way.

4. You can make a lot of money as a realtor, as long as you have a great network

Oh my Lord, the scads of money some of those realtors make is mind-boggling. The broker I mentioned before, the one who makes sliders, sells tons of fancy houses year-round, and I would be surprised if she makes less than half a million in a given year. She’s always busy and definitely sell at least twenty million-dollar homes a year, which is where I got that $500k number from.

For your reference, an agent’s fee is generally 2.5% of the home’s value. This means selling a $500,000 home would net an agent $12,500; a million-dollar home gets them $25,000. For one deal!! Now imagine they’re selling a $500k home every month – that translates to a $150k salary in an enjoyable line of work. If you’re also selling those million-dollar homes or matchmaking renters with rentals, this number only goes higher.

This means, however, that you need to be the agent the homeowners turn to when they’re ready to sell. You will not be raking in that money if nobody wants you to sell their home. Having a network of these richer homeowners is absolutely critical to your success. Without that you’re dead in the water before you even begin.

5. If you’re buying, having a realtor trumps all. If you’re selling, not having a realtor is playing with fire.

There’s no downside to having a good realtor if you’re buying a home. There are quite a few scummy realtors out there who might not represent your best interests, but if you’ve done your due diligence you should feel comfortable and happy with the agent you choose. Plus, you’re not exactly paying them for helping you pick a home – that 2.5% commission comes out of the seller’s pocket, not yours.

Okay, you’re technically paying it as you’re the one plunking down that money to buy the house, so the price for their services is coming out of what you pay for the home. But eh, you’d be out the same amount of money either way. Or less money, with a realtor who can get you that better value.

Now on the seller’s side, they might not like seeing that realtor commission disappear from their bank accounts. With both the buyer’s and seller’s agent taking a 5% commission, that’s a lot of money coming out of their sale profits. With that $500k home sellers would see $25,000 go solely towards these commissions. Some sellers would be tempted to go it alone and decrease those fees. Which is always an option if you so choose. Issue is, you’re then going up against this tight-knit community of realtors who wouldn’t be excited that you’ve snubbed them.

It’s not like they’ll try to undermine your selling your house; just look to #1 and you’ll see they’ve got no time for that. But you will be missing out on their niche expertise in selling homes just like yours in your very own neighborhood or town. They will wipe the floor with you and get a lot more for their buyers than if you had a realtor fighting on your behalf.

6. This is not a low-stress job

I agree with Mr. Money Mustache in most things, except for his idea that being a realtor is “cushy”. It might be, if you care about a salary for surviving instead of thriving. Your realtor has to know their shit to make it at all in the valuable markets. They’ve also got to be responsive, patient, and seemingly ready to move heaven and earth for you.

Realtors really have to know what you’re likely and unlikely to get in your city and surrounding areas. Whether it’s a buyer’s market (more supply than demand) or seller’s market (more demand than supply). The more of a seller’s market it is, the more expensive the houses are. They have to know all the relevant laws and regulations depending on what you want out of a home. They might have to wrangle with City Hall to get necessary records about a property. They might have to argue endlessly with estate lawyers or those pesky historical committees, who can and do hold up the home-buying process. They’ll have to coordinate photographers, home stagers, storage personnel, open houses, private appointments, and more just to present the home in the best possible light. Mortgage agreements can fall through. Offers may not make it to the P&S (purchase and sale agreement) and a P&S may not make it to the final closing.

And the cherry on top of the cake: their income is variable and never guaranteed. You might rake in the big bucks during the spring market and have nothing in the fall and winter. It’s tough out there, even more so if you don’t come into it knowing it’s so tough. Expect the stress and chaos; it all comes with the territory.

7. You will see some truly fascinating things.

One of the favorite parts of my job was seeing how gorgeous – or utterly batshit – people’s homes look like on the inside. Some sellers will choose to have their home professionally staged, which definitely helps if you’ve already moved out or just don’t think your dildo displays will draw in buyers. Before I quit I got to the point where I could tell what preferred company staged what property (they reused the same décor which helped spot it). And that was just from me drooling over the pictures. Realtors get to see all of this up close and personal. The breakfast nooks! The plasterwork! THE HOME LIBRARY STUDIES! God, I will never get my fill of Venetian plaster and built-in bookshelves. Some of these people live in the freaking lap of luxury, and it brings me joy to see the architectural works of art people live in every day.

I’ve also seen some truly heinous architecture and design decisions. Some of them are forgivable, like ugly shots of an unfinished basement or unused garage. Others, not so much. Neon carpets come to mind. Outdated décor does as well. Some of the more questionable aesthetic choices can leave me laughing out loud or cringing in my seat.

One of the most memorable I saw (and can’t find photos of, sadly) was a frog-themed bathroom. You’d think it would hold some cute frog tiles or a frog shower curtain, but no. It was just… frog statues, everywhere. The bathroom was absolutely covered in fake plants, too, for the frogs to perch in. You could barely see the toilet for all the frogs and plastic fronds. It was too much. But, again, these oddities come with the territory. Homes provide a fascinating glimpse into how other people live, both the multimillionaires and the crazy frog lovers. And even a combination of the two.

8. Choose your agent based on the agent’s reputation, not the brokerage’s.

There were three main reasons why I left my real estate job. One was that I had a nasty manager and needed to get out ASAP. A less important reason was I wanted higher pay, and wouldn’t get it at this company. But the third reason (second only to Manager Umbridge) was that I wasn’t really doing any marketing that would help the realtors. The marketing director’s main duty was sitting in meetings with realtors to go over their own marketing plans and make them think she was helping. The rest of the time she was buying crap off of Amazon and foisting everything off to her assistant (who is an absolute GOLD STAR employee who deserves way, way better). And this was a company that routinely bragged about their “marketing reach”.

Based on my experience, brokerages don’t much help agents in the way of actually helping to sell the property. So if you’re looking to buy or sell a home, do your due diligence on finding a good realtor. You want someone with a consistently glowing record, not the guy who works part time at Starbucks.

9. If you ever need a notary or a bathroom, real estate firms will have them.

If they’re smart, real estate firms will have several different offerings in an effort to get more people in through the door. Becoming a notary is one of them; they’ll even have a little sticker on the door to let you know there’s a notary present. They’re also always up for getting more karma in their communities, even for the little things; you never know if you’re helping someone with a three-million dollar house in need of selling! Basically, if you need to ask someone to jump, the realtor’s most likely to ask “how high?”

And that’s on that! Have any burning questions you want to ask a real estate insider? Someone who won’t try to get your contact info and shove their business card down your throat? Sound off below and I’ll answer whatever questions you might have!