The challenges that real estate professionals face are different from most other careers. In the real estate industry, knowledge in various areas such as law, negotiations, social media, sales, and business development is required. By continuing to find new clients, you can help your business grow.
What does a head chef at a gourmet restaurant in your city do? The career seems like fun! Coming up with new recipes and trying different foods. You don’t see the challenging customers, people management, reputation management, marketing, health codes, and paperwork that are required for this job.
The challenges of being a real estate agent may include finding common ground on pricing with another party. The emotions people are feeling are intense and reveal the amount of stress that exists in the situation. Although the challenges you see on TV may be part of the job, the real challenges are not televised.
Being a real estate agent requires a lot of effort and comes with many challenges.
This article covers seven of the difficulties real estate agents face and exposes the alarming rate of failure in the industry. You will also receive tips on how to effectively deal with real estate problems and what to do to make yourself more comfortable with them.
Why People Think Real Estate is an Easy Job
When you ask consumers if they believe real estate is a difficult job, you will receive a variety of answers. Many people will think that real estate involves opening up doors and negotiating deals. This is not the case.
People form opinions based on what they can see. There is more to a career than what meets the eye. You will find that opening doors and negotiating contracts barely takes up any of your time if you are in real estate. The job of a real estate agent is much more complex than most people realize. Agents must learn a variety of skills in order to be successful.
Challenge 1:
Most people get into real estate with the expectation of having a lot of time
One of the most common reasons people become real estate agents is the promise of having a flexible schedule. The image of a real estate agent as someone who spends their days lounging around until evening showings is false.
If you are in the industry, you will know that if you want a lot of time off work, you can have it, but you will make very little money, or no income at all.
Most successful real estate agents have a work schedule that would make most people very angry. A typical day in the job could involve working on real estate marketing in the morning, followed by contracts in the afternoon, and then showing properties all evening.
“No worries”, you say, there is always the weekend. You’re not cut out for the job if you’re a new real estate agent and you’re taking weekends off. You can expect to work long hours for little pay in the beginning.
Real estate agents often give the illusion that they have a lot of time on their hands. If you are getting into the real estate business or are new to it, be prepared for some long days of hard work. Working long hours does not guarantee success, you must use your time wisely to be successful.
Make a schedule focused around prospecting and business building. Don’t wait until you’re established in your career to start giving up your free time—do it early on.
Challenge 2:
Most people expect to be making a lot of money when they get into real estate
Many realtors think they will be making a lot of money very soon, thanks to TV shows and movies depicting real estate agents as ultra-wealthy. People tend to remember their previous real estate agent and how much money they had.
Although they didn’t realize it, the car they were admiring was leased, and buying the watch would require making financial sacrifices in other areas just to keep up appearances. Although there are some great benefits to leasing in terms of taxes and appearing successful, not every real estate agent is as wealthy as they may seem.
If you’re not selling any homes, you’re not making any money–most agents only sell a handful of homes per year. On average, realtors sell around six homes per year.
If you’re thinking that doesn’t sound too bad, since agents make around $10,000 per house sale, think again – see challenge 3.
What to do about it:
You need to have a clear plan for how you will grow your real estate business. Without a plan, it will be difficult to gauge your progress and set realistic goals. If you think you’ll become a millionaire overnight by getting involved with something, you’re setting yourself up for disappointment. Create a budget for your expenses and continue to work hard even when you are not making money. Making money in the real estate industry takes a lot of time and effort.
Challenge 3:
You don’t keep all of your commission
Many people believe that agents receive the full commission amount. The challenge here is you are running a business. The store manager does not pocket the grocery store’s nightly revenue.
In real estate, revenue and net income are two different numbers. Revenue is the total amount of money that comes in, while net income is the amount of money that is left after expenses are paid. For example:
- Brokerage: $10,000 – $40,000/Year
- MLS Dues: $1,500 – $4,000/Year
- Operating Expenses: $20,000/Year
- Marketing Expenses: $20,000/Year
- Taxes: $15,000/Year
These are just some main categories. The list could go on and on. An agent who makes $100,000 per year is likely to keep 30% of that.
When you discuss commissions with a consumer, explain to them that the commission goes towards paying for various services that the real estate agent provides, such as advertising, marketing, and professional fees. By understanding what the commission is used for, the consumer can see that the agent is not overpaid for their services.
The majority of what they earn goes towards continuing to market themselves, with only a small percentage going into their bank account.
What to do about it:
It is important to have a business plan when starting a business, and to remember that running a business is just like running any other type of company. If you want to stay in business, don’t try to keep all of your commissions. If you do, the consumer will select an agent that provides more service.
If you want to save money, you should try to keep your expenses under control. Do not spend frivolously and think about how your purchase will benefit you in the future.
Challenge 4:
People will not just start calling you and hiring you to sell their house
If you’re a new real estate agent, you might think that once you have a website and social media profile, you’ll start getting leads and be busy in no time. Unfortunately, this is not the case. You will need to work long hours prospecting for new business. One way to generate business as a real estate agent is to call people who are selling their homes without the help of an agent, knock on doors in your area, and talk to people you know. Another way to get business is to call expired listings, which are listings that didn’t sell and are no longer active.
This industry is not easy and not everyone is making a killing. The industry is tough and you need to work hard to secure each deal. You won’t be successful in business without putting in a lot of hard work and determination.
What to do about it:
This challenge is also a huge positive. For those who are willing to work hard, there is more business to be had because people will not be calling all the time. If you want more business, dedicate your time to prospecting and hustling rather than sitting back and hoping for business to come to you.
Challenge 5:
It is rejection-heavy work
In real estate, you will have many opportunities to hear “no.” You need to keep pushing on. Look, we don’t naturally like rejection. Our genes make us want to be accepted by others.
In real estate, rejection will happen every day. If you’re not prospecting every day, you’re probably not doing it enough. You should become accustomed to hearing the words “no” and “I’m not interested.” There is a risk that real estate agents will not follow up with people enough or will pester them too much. If you want to succeed in this business, you need to develop thick skin. Otherwise, you’ll get taken advantage of.
What to do about it:
This can be an advantage because most agents are not willing to put in the long days of rejection. Develop an attitude that celebrates the effort you put in rather than the results you achieve. If you only focus on the outcome (sale), then rejection can be enough to discourage you. However, if you keep your goals focused on the effort, then no amount of rejection can hold you back, because you are only concentrated on continuing to put in the effort.
Challenge 6:
You need to figure out people, sales, and psychology
As a real estate agent, you are now running a business focused around people who are in high-stress situations and people who are on emotional rollercoasters.
Great people skills are not enough, you need to learn more. In real estate, you are dealing with delicate situations. You need to be firm but soft. Direct but nice. Persuasive yet caring. Fast yet slow. Detailed yet creative.
You will meet people from all walks of life. You need to meet them where they are at in the process and help them through the journey.
What to do about it:
Invest time in learning people skills, sales techniques, and psychology – they will be valuable assets. You need to be able to handle different types of emotions when making decisions in real estate, and appeal to the person regardless of their personality type.
Challenge 7:
It will take minimum 3 years to see results
Fast results in real estate are rare. Although it is not very common to sell 10 homes in your first year, this does not mean that you will automatically sell more homes in your second year. meaning it will take 3 years of consistent effort before you will see real results.
This isn’t just three years of doing things mechanically. It takes three years of hard work, dedication, and getting out of your comfort zone to achieve success.
Real estate is a long-term game. In general, the harder you work today, the more rewarded you will be in at least 90 days. You will only see your business flourish if you are willing to commit to long-term effort.
What to do about it:
Work fast but stay consistent. many real estate agents will start off with a lot of energy and enthusiasm. Although they will start quickly, their energy will fade as time passes. If you’re not making sales and keep hearing “no,” you’ll need to work harder. Although success in real estate is not certain, if you work hard for three years you should start to see some positive outcomes.
