Any time the commission to be earned is more important than the transaction, the agent may be compromised.

It is important to be financially stable enough to never have a transaction closing be more important to you than it is to your client.

  Sage advice from Wayne Martin  and  Bob Crane !

    A lot of Realtors are on the edge financially; if the sale doesn't close, they will be up the proverbial creek.  And that may not bode well for the Buyer or the Seller.

    What can be done about it?  My first Broker vetted me financially, before letting me hang my license with him.  "Do you own your car, Fred?  Are you current on the payments?  What about your house; do you rent or own?   What about liquidity, cash in the bank?"  When the Broker knew I was financially solid, he shook my hand, "Welcome to our company, Fred!"

  Every Broker should use that business model.  And if their Agents are not closing sales, they should meet and discuss "how are you holding up money-wise?"  If they are broke, behind on payments, etc. then it is in everyone's best interest to cut them loose.

Financial instability and greed are not compatible with fiduciary duties.

Wayne Martin & Bob Crane said it well & echo my thoughts on this topic.  

It is hard to be ethical when you have two babies to feed at home and no money in the bank.  It is possible, but it is very hard.

I am with Wayne Martin on this.  I started in real estate with capital, owned my car outright, and was a homeowner with a small mortgage.  

We need money to make money. 

Desperate situations call for desperate measures.

Something I learned about the homeless & their frame of mind is that when you are hungry or don't get enough sleep, you are not in your best capacity. So, it can be with an agent who is needy & in want and for all human beings for that matter. It can impair judgment & rob you of objectivity/focus.

OHHHHHH YES . . .  
Multiple income streams are NECESSARY to thrive in this business  . . . I have always had that and always will.

It's WAY too tempting to want to cut a corner when you're trying to make the truck payment . . . not 'needing' that deal allows the broker to keep their head straight! 
Plus, it is a lot easier to do your best work when not panicked! 

When you ask your Realtor if you should purchase this property and they start thinking about how much the possible commission would help toward paying off their outstanding Visa bill ... that's a problem.

This industry can be volatile, and not steady, so agents/brokers do have to be stable, and not wait for a check to "make ends meet".    As Wayne said, when the commission check is more important than your fiduciary duties, time to leave the business.

It is important for people in all walks of life to be financially stable.  The physical and mental well-being that comes from that is very beneficial.

Years ago an agent broke down and cried to sellers at a listing appointment, telling them she was a single parent of several kids and needed the money. The sellers felt so bad they gave it to that agent because they felt sorry for her situation.

One client told me that he would not consider an agent who was irresponsible with their money to manage his transactions. I can agree with that 100%.

Absolutely. Desperate people do desperate things and won't act in the best interest of their client if they are not financially secure. I have seen agents "buy" a listing out of desperation because they needed money and thought they could make a quick buck. I have also seen buyer agents push a client to buy anything just so they could be paid. The list goes on but the bottom line is that it would be a rare agent who could be objective and work in the client's best interest when they cannot pay their bills or meet their basic living expenses.

Integrity is doing the right thing even when no one is looking.

Well I learned at a very young age, in fact I was still in college to not put money ahead of giving excellent service or taking care of clients.  I remember the manager saying - DO NOT have Dollar Signs in your eyes! Keep your clients interests in mind!  

As for your question I think defining 'financial stability' is key.  When I first started in RE I was fairly stable.  I also relied on my earnings to create more wealth- as does everyone else in business that I know. So if an agent is only looking out for his/her  pocket book and not for their clients best interests that could create conflicts.  No doubt.

Plays Peter Bellamy: A Poor Honest Man

How can you offer advice on a business decision if you have a track record of poor decisions.  

Some people will do and say anything for a buck.  Especially if they re desperate.

I do believe having the stresses of financial instability could cause some to use clouded judgment or be tempted to, let's say, shortcut the system

In short, Yes. 
In a broader sense, it depends. I think the stage of life someone is at makes a difference, but still falls back on yes they need some sort of stability. (ie. young and in college or recently graduate back in with parents (so housing is stable)). 
If they are a bit older and looking for a change in their life, then their responsibilities are probably different and are less flexible about being being more fluid in their life. 

The fact it is commission based, there is all ways a possibility for unethical people to enter the industry and disregard their fiduciary duty. 

Regardless, if financial stability wasn't important, then there wouldn't be such a high turnover rate in this industry. Therefore, I believe that answers the question of yes it important to financially stable. The 2014 NAR report putting the percentage of agents that are out within 5 years of entering the profession at 87% demonstrates the financial stability is important.

I have been very broke, but it never made me comprise my duties.

You either honor your duty to your clients or you don't. I've never calculated up a commission in my entire life.

Just the other day a person I know who was going to go into real estate HALF time (she was going to keep the other job to keep her afloat) said she tried and couldn't do it.  Seeing so much money going OUT on RE fees alone stopped her.  People get so used to their paychecks and their lives depend on it.  She would be one of those agents who, if a transaction didn't close, would think of it as having LOST that money--a mindset lots of new agents get into.  Seasoned agents learn to not count their chickens etc.....

I agree with Lyn.  I've never calculated and relied on a commission prior to a sale.  I figure it out only when I am turning my paperwork into the office.  Also, I think commission breath is easy to spot.

I think all salespeople have to focus on their personal financial situation first. How our personal financial situation is directly affects every single aspect of how we work. I have a talk coming up where this topic will be one of my focuses actually. Great question Tim Bray.

As in most things in this business- it depends. I tell new agents coming into the business that if they will be exclusively working in sales, they should have at least 2 years of living expenses set aside while you build your practice. Most agents here will work on rentals- and if you are prepared to really hustle- you can earn six figures in your first year- and earn it fast- especially in the summer months. In that case, being financially stable isn't as high up on the list. It takes just a few weeks to understand enough of the basics to work rentals and start earning money. Things move fast in the summer months- and if you put in the effort, time and shoe leather-  you can succeed. Rentals never interested me- so I didn't pursue that path.