What is the risk associated with relying on remuneration from pending transactions?

Relying on remuneration from pending transactions carries significant risk primarily because even binding agreements can encounter various issues that prevent their successful completion. Pending transactions, while seemingly secure, may be subject to contingencies such as financing problems, inspections, or appraisal issues that can lead to cancellations or delays. Additionally, external factors—such as market conditions, buyer or seller decision changes, or legal complications—can arise unexpectedly and disrupt the transaction process.

It's important for real estate professionals to recognize the uncertainty inherent in pending transactions and to manage their financial expectations accordingly. Successful transactions must be closely monitored, and professionals should maintain a diverse portfolio of leads and active listings to mitigate the risks associated with reliance on any single transaction for income. This understanding is crucial for maintaining financial stability in a commission-based industry.