7 Key Challenges of Being a Real Estate Agent (and What To Do About Them)
Just as any other business, the Real estate industry is faced with its own challenges. And as someone who is just venturing into the property business, you should be informed about the key challenges of being a real estate agent and how you can save yourself from being enmeshed in them.
Professionals in Real estate are confronted with diverse challenges in the industry. They are required to be equipped in diverse areas like law, sales, negotiations, business development, and social media, while also making an effort to expand the scope of their market.
Why Do Real Estate Agents Fail?
Putting so much attention on the hard part of being a real estate agent may automatically tune your mind to the difficulties that you see on Million Dollar Listing, in which a real estate agent is having a hard time balancing price with another party. The stress of negotiation heightens emotions, but then, you haven’t seen the real challenges faced by real estate agents.
Real estate agents are weighed with a number of situations in their career which can be tough to surmount. However, there are steps you can take to avoid being faced by these difficult experiences. We’ll be looking at 7 challenges of being a real estate agent which causes failure of real estate agents, and how to take steps to be safe in the industry.
If you are considering starting your real estate agency, here is how to start a real estate business
Why Do People Think Real Estate Isn’t Hard?
Many consumers think that real estate is all about opening doors and having a good deal negotiated. But no, it is more. Most people form their opinion of the real estate industry based on the things they see, but actually the career has more than the eye sees.
A regular real estate agent knows that opening doors and having contracts well negotiated hardly gulps up time. But the real job is in some extra skills you’d need to acquire to succeed in the industry.
So, what are the challenges of being a real estate agent, and how can you save yourself by avoiding them?
1. The Illusion Of Having Tons Of Time To Yourself
Most people who are new to the real estate industry believe that they would have lots of time to themselves and total control over their own schedule. But it is false to think that real estate agents wake up, bum around throughout the day, and then show up later in the evening.
Those who are quite experienced in the industry know that you can actually have a lot of time to yourself in the industry, but you’ll save yourself headaches and shock by having another job that would guarantee you a steady income, because having lots of time off in real estate will yield little to no income for you.
People who have succeeded in the industry work tons of hours to make a meaning of their effort. An agent could be busy with marketing in the morning, handling contracts in the afternoon, and moving around properties in the evening. And this is not necessarily different for your weekends.
And here’s what you can do about that:
As a newbie in the industry, you’d save by getting yourself prepared for long hours of hard work each day. And this doesn’t even guarantee that you’d be automatically successful. You’d still be required to do things right within the time committed to work.
Create a workable schedule that is focused on building your business and engaging prospects. Ditch the idea of having free time while just starting out. your focus should be on getting real positive results from your efforts.
Look up important factors that drive real estate.
2. False Idea Of Having A Get-Rich-Quick Venture
A lot of people who venture into real estate are thinking that they would be raking in hugely in the business. They look at their last real estate agent, and how they ride in the nicest car and rock on dazzling wristwatch.
But they didn’t see the part of leasing the car or the areas where cuts were made to achieve buying the wrist watch, just to create and maintain a classy appearance before clients. And this is not even saying that you should thread this path as a real estate newbie. The point is that not everyone who is a realtor is bringing in the cash that is directly reflective of another person who is able to acquire the expensive things to show.
If you don’t sell or let out homes, you are not going to have any money. And according to some reports, most real estate agents are only able to sell very few homes annually. In fact some are just as few as six homes each year. And if you are already thinking that agents should be able to rake in $10,000 on a single sale of home, then there is more you should see.
And here’s what you can do about that challenge:
Set realistic expectations of how to start and grow your agency. If you think you’d turnout a multimillionaire overnight, you would get yourself burnt. Create a financial budget for your real estate business and keep working hard even when it seems that you aren’t hitting your projected target. The business is a long-term game with lots of work and dedication, but will be accompanied by the money.
3. All Commissions Don’t Land In Your Purse
A lot of people think that all the commissions land directly into the bank accounts of the real estate agent, but that is totally false. Real estate is just like any other business. The manager in a grocery store doesn’t just clear out the tills every night and fill his pocket with the revenue.
Just as every other business, net income and revenue are not the same figures.While expenses incurred by realtors vary from one another, here is an example of common expenses and rough figures.
Brokerage: $10,000 – $40,000/Annually
Marketing Expenses: $20,000/Annually
Operating Expenses: $20,000/ Annually
MLS Dues: $1,500 – $4,000/Annually
Taxes: $15,000/Annually
While these are some of the key categories, the list can be longer. Now the point is, if a realtor is able to hit $100,000 per year, what they will be keeping would be around 30% of that figure. Only just a fraction of the cash finally gets into the bank accounts. And there are endless spendings to cover for marketing.
And here’s what you can do about that challenge:
Create a perfect business plan for running your business, and take note that your business is just one of the many businesses out there, and the rules of running a business applies. Don’t ever consider having all your commissions to yourself, as this would only mean setting your business up for bad landing. Consumers will always prefer agents with much better service to offer.
Always consider reinvesting into your business. Keep your expenses mild, and avoid spending frivolously.
4. You May Not Get A Fast Take Off
As a newbie in the real estate business, you are not going to be having your dream clients start to call in immediately you launch your website and provide a social media handle. People will not start showing interest immediately to your business and all the money starts rolling in. No, not at all. You’ll be required to work hard for long hours calling for sale by homeowners. You’d be knocking on doors, calling people you already know, connecting to other real estate agents, and putting in all efforts before you’ll finally be landed with business.
You’ll be required to work for every deal that comes your way. You’d require to persevere and be focused for you to make a headway.
And here’s what you can do about that challenge:
This challenge isn’t all negative. In fact it is a huge positive one. The fact that you will not be having people call you every time, it means that there is more business if you are willing to commit yourself more to work. A lot of agents sit back and hope that the opportunities come to them. But if you dedicate yourself to prospecting and hard work, you’ll have a better advantage over them.
5. You’ll Face Multiple Rejections
In the real estate business, you’ll be confronted with rejection on several occasions. But this is definitely not a reason to sit back and fold your arms. You’ll still need to keep pushing. The fact is that you should get used to being rejected. Get used to the word ‘no’ and “I’m not interested”.
Ensure to avoid being on people’s neck. Just work out a strategy to follow them up without being annoying. Several realtors face the risk of pestering potential clients excessively versus not following them up enough. It is either you develop a necessary thick skin to rejection or opportunities by-pass you.
And here’s what you can do about that challenge:
Just like the previous challenge, this one can be turned into an advantage since several agents get unwilling to push through the period of rejection. Develop a particular mindset that commends you for how much you put into your business rather than the result you get from the efforts.
If you put your focus on the results you get alone, you might get broken by the rejections you’ll be confronted by. But with focus on your effort, you are not likely to be impacted by any amount of rejection that comes your way. You’d rather be focused on the continuity of your efforts.
6. Figure Out People, Their Psychology, And Sales
As a real estate agent, running a business means dealing with people who may be having so much going on in their lives. People who are likely having emotional rollercoasters and are in high-stress circumstances. And even if you think your people skills are on point, there is still more you’ll be required to learn in the business.
You’d be handling situations that are delicate. You’d have to be direct but still nice. You’d need to be detailed and still creative. You’d be firm, yet soft. Fast, yet slow…persuasive, yet caring.
You’ll be dealing with people from diverse cultures, demographics, and interests. You’d be meeting them through the process and helping them meet their goals.
And here’s what you can do about that challenge:
Improve your people skills. Study your clients and people you meet everyday at work. Study sales and psychology. Decisions made in the industry are largely enveloped with an element of emotion. So, it is advised that you are able to handle these emotions and also be able to appeal to individuals no matter what their personality type is.
7. You’ll Require Up To 2 Years To Start Seeing Real Results
It is very rare to see quick results in the real estate business. And even if you have ten houses sold within your first year, it is not guaranteed that this would happen or improve in your second year.
You’d have to be very consistent with your focus, dedication, and hardwork, for a minimum of 3 years, to begin to experience real results.
Since the business is a long-term game, it would require long-term efforts for the business to experience exponential growth. However, in general circumstances, your efforts should start paying off within 90 days of dedicating them.
And here’s what you can do about that challenge:
Most realtors will launch with so much excitement and energy, but you must ensure to be consistent and focused in your work. Most realtors will begin to dissipate in their energy as time goes on, but this is the time for you to put in more effort. Work hard and steadily for like 2 years, and you’d start experiencing some significant result in your effort.
In conclusion, there are a wide range of challenges faced by real estate agents. While every business demands that you put in required hard work and dedication, real estate is not different. If you are able to acquire the necessary skills you need to succeed and input the required efforts, your business will very likely succeed.