According to the Nat’l Assoc of Realtors® 2018 Membership Profile, roughly 86% of all real estate agents are self-employed as independent contractors. About another 5% were employees (probably most of whom are working as licensed assistants for other Realtors®, ISAs, salaried agents or builder’s reps).
Let’s briefly review the primary 3 routes into real estate sales, and also touch on 1 more path which has appeared on the scene more recently due to industry trends involving the culmination of the real estate team:
1. The Solo Agent
The solo agent archetype is someone who has come into the real estate sales field completely alone. The real estate sales profession being roughly a century old, our industry was originally built by and dominated by individual agents. Today’s full-time individual agent has to wear many hats, as not only do they generally serve both sellers and buyers, as self-employed contractors they are also in charge of their own marketing, branding, prospecting, advertising, transaction management, closings, process review, quality control, and any follow-up contact they make with their customers and clients beyond closing. Solo agent runs their own show, motivates themselves each day, and builds their own authority in their marketplace.
Succeeding as a solo agent generally requires a dynamic personality and the ability to work well under pressure, likability, and a level of emotional resilience such that the solo agent won’t be easily deterred by rejection, failure, or other obstacles and delays which will come up along the way. Because of the initial financial and time requirements to get into real estate, the full-time solo agent generally either has savings or investments, an existing pension, or a spouse with income which they can rely on initially because it will usually take them 3 or more months to earn their first commission — and when they have none of these things, they will often have a reason driving them and keeping them motivated such as having children they absolutely must provide a future for, or something from their individual past that is driving them to prove themselves, stay in the game, and not compromise or give up until they have taken the gloves off and tried absolutely everything that they can think of. Today’s solo agent is often active in civics, nonprofits, at church or synagogue, or just a door knocking or cold calling monster. It’s easier for extroverted personalities to succeed as a solo agent, but introverts like myself can still succeed — though they will have to work additionally to teach themselves sales habits and to overcome their fearsq and face any social anxieties.
The solo agent wakes up every morning unemployed. It is scary. Since >75% of real estate agents wash out of the career within 2 years, this is someone who will do whatever it takes to make their career take off.
2. The Assistant
The assistant would most typically be someone younger, or who does not have any financial means (savings, investments, a spouse with an income, or an existing pension) in place for them to have the ability to be a solo agent. There are one or two top agents in my local market (Ann Arbor / Ypsilanti, MI) who began as assistants.
The advantage of coming into real estate sales as an assistant is the ability to earn an hourly wage while you also learn the ropes and get an inside look into the industry, the transaction processes, the marketing, etc. To start, they generally only make $10 — $14/hr, but a seasoned administrator in a higher-producing team or office could earn upwards of $30,000–$65,000/yr in my area, inclusive of any bonuses. Some teams/offices provide a per transaction flat-fee bonus, paid at closing in addition to hourly/salary, which incentivizes the assistant to manage each transaction as an important transaction for them as well. During their hiring process, assistants are generally expected to sign some form of confidentiality agreement or a non-compete agreement which will prevent them from poaching business from the team which they are hired to assist.
Assistants are hourly or salaried employees which are expected to be available, usually in-person at the office, during business hours. Acting as a concierge for the agent’s clients and customers, managing transactions, creating flyers or online ads & social media content, coordinating closings and inspection appointments and loan and title representatives are the primary tasks that assistants will handle.
The majority of the top producing sales teams have assistants handle their sales from contract acceptance to closing and their value shouldn’t be understated.
3. The Buyer’s Agent
The buyer’s agent is someone who is coming into real estate sales by hitching their wagon to that of a more successful agent’s. Teams will recruit buyer’s agents from new licensees, assistants, and existing solo agents who are struggling financially or emotionally to stay afloat in the trade. The last example is how I initially became a buyer’s agent for about a year before going out on my own as a solo agent once again.
The advantage of being a buyer’s agent is simple: Leads. The buyer agent enjoys more of a turnkey business since they receive purchaser leads and showing requests directly from their team without up-front cost. Buyer’s reps enjoy a degree of autonomy, as they are still independent contractors with some flexibility in how and where they spend their time. The buyer’s needs and availability will generally dictate the buyer’s agent’s schedule. Transactional and sales experience are acquired quickly by the buyer’s agent since they’re expected to process and respond to the leads which their teams trust them with — and that can mean several showing tours for several buyers in a short amount of time.
Disadvantages for the buyer’s agent can include showing fatigue and a lot of running around, since working with buyers requires a lot more time and showing appointments than working with sellers. Some buyers agents may still list properties and represent sellers, in addition to buyers, while other teams are more specialized in that they expect buyers agents to stick to their buyers while the team leader or another senior designated agent handles the sellers and listing appointments. The leads which the buyer’s agent receives are generally those which the team leader is either too busy to attend to, or otherwise not worth taking for themselves — often due to the lead’s price point, location, or motivation level or urgency.
One agent’s “extra” leads may be another’s bread and butter. It can only take one relationship, with the right client, to change your trajectory as an agent.
4. The Inside Sales Agent
A relative newcomer to the real estate sales industry, the inside sales agent (ISA or OSA) is someone on a larger sales team whose primary role is lead generation. The ISA is most often paid an hourly plus a commission. Like the Assistant, this compensation model helps the ISA get into the career because they are able to immediately realize an hourly income, usually with some commission on top so as to incentivize them to maximize their time and hone their prospecting & scripting skills over the phone. When the ISA becomes more seasoned, it is common for them to opt to switch into a commission-only compensation model since with their experience they can reliably bring in qualified leads and be paid more off a better commission split than their hourly.
Another advantage of the ISA role is that the ISA comes into the career feet-first into the trenches: By entering into difficult real estate conversations with total strangers which often results in confrontational/stressful conversations. It generally only takes a week or two for a good ISA to realize that some of the most stressful interactions are also the most lucrative. The ISA will sell the team (or the broker) who is also their employer, which may be a lot easier than selling themselves as a brand new solo agent. Data, call lists, and scripts are provided to the ISA as part of their training/orientation which will tell them who to call, what to say, and how to sell their team in order to close listing and buyer appointments and put transactions (and commissions) into that team’s sales pipeline.
Once the ISA has proven themselves as an earner over the phone, the transition from an ISA to a solo agent (who may also generate leads via cold calling and other prospecting methods) becomes a far easier one. A seasoned ISA is a phone animal (A wolf on Main St, if you will) who will always be able to find their next sale.
Inside Sales Agents are the core lead generation component in Michigan’s highest-producing teams. A business is only as successful as the sales and prospecting which powers it.