5 Insider Facts About the Real Estate Industry


Many people think they understand the real estate industry: agents show houses and get paid when they close a deal. How complex could it be? 

But industry insiders know the truth: there is so much happening behind the scenes of every real estate transaction.  

Today, we’re pulling back to curtain to give you an insider's look at the hidden world of real estate. Here are five insider facts about the real estate industry.

Industry Fact #1 - Real Estate Agents Are Business Owners

Real estate agents are typically not employed by their brokers; they are independent contractors. This means that real estate agents effectively own their own businesses. 

Thanks to this arrangement, agents have the flexibility to choose their own hours. And they have the anonymity to run their business the way they see fit. Plus, because agents are paid on commission, they aren’t limited by a salary.

The trade-off for these benefits is that agents wear all the hats! The brokerage might provide a few systems and services, but agents must think like business owners to be successful.  

Pascale Nejaime of William Pitt Sotheby’s in Connecticut understands her role as a business owner, particularly when it comes to tracking her return on investments in her business. Her advice is to “figure out what’s working and what’s not working in your marketing by calculating your ROI.”

“Sometimes the most basic things work best, like sending a packet to an expired listing for $2, and ending up with a $5,000 commission check," said Nejaime.

As a business owner, get ready to make a business plan that includes:

  • Management and personel

  • Branding and marketing

  • Competitor analysis

  • Projected financials

Industry Fact #2 - Lead Generation Never Stops

Many new agents are surprised to find that they spend just as much time generating new leads as they do working on deals. And lead generation never stops. Even when you’re an experienced agent, you’ll still be spending a large portion of your day generating new leads.

"I make it a point to get at least two hours of lead generation minimum per day,” Kenneth Kyrell of Keller Williams - Buckhead in Atlanta.

Kyrell goes on to explain that his daily lead gen plan “consists of calling my sphere, posting real estate content on my social media, and following up with people/clients that I’ve already introduced to my pipeline from previous lead generation.”

If you want to keep your pipeline full of clients so that you can earn a consistent income, you must prioritize lead generation. 

Industry Fact #3 - Agents Will Do (Almost) Anything to Save a Deal

When you work so hard to earn your clients, it can be heartbreaking to watch a deal fall apart. So agents will often take unexpected action to save a deal.

Here are just a few of the measures agents have taken to close a deal:

  • Personally fishing a dead rodent out of a pool before an open house.

  • Paying thousands of dollars upfront for staging, with the understanding that the sellers would repay the expense at closing.

  • Paying for property repairs out-of-pocket to meet minimum property requirements for buyers with FHA loans. 

  • Reducing their commission to cover the gap between the amount the buyer is willing to pay and the amount the seller is willing to accept.

Industry Fact #4 - Shifting Market Conditions Require New Strategies

Market conditions are always changing. So agents are constantly changing their strategies to match the needs of the market.

Take the recent COVID-era housing market, for example. At the beginning of the pandemic, agents were literally unable to show homes in several states where real estate was considered “non-essential.” So agents rushed to find digital solutions that would avoid face-to-face interactions. The ingenuity of agents dramatically increased the use of virtual tours, remote online notary services, and virtual closings. 

As mortgage interest rates fell and work-from-home jobs made relocation easier, buyer demand exploded. Agents suddenly needed to hire showing assistants to help with their tour load. And agents had to get creative to make their buyers’ offers stand out.    

As we predicted in our 2022 home buying trends, interest rates are currently rising, which is lowering demand, and agents are pivoting once again. You can expect to see agents focusing more on expired listings, investors, and distressed properties in the near future. 

Industry Fact #5 - Brokerage Structures are Changing

Choosing a brokerage that meets your needs and shares your vision is vital to your success as an agent. And with brokerage structures changing, you’ll have more varied options to choose from.

Traditional brick-and-mortar brokerages offered office space and utilities to agents in exchange for a split of the agent’s commission on each sale. A 50/50 split was common for new agents, with experienced agents earning more. 

But the rise of virtual brokerages provides an alternative for tech-forward agents who want to keep a higher split of their commission. Virtual brokerages provide the digital forms and systems you need. But you’ll need to arrange a home office or alternative workspace.

Pay structures are changing as well. Some brokerages now offer a 100% commission agreement. This allows you to keep all of your commission in exchange for paying monthly fees to your brokerage. This is an attractive option for agents with high sales volume.

Start Your Real Estate Career Today

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Updated 9/30/22

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