Problems to Deal With When You’re a Real Estate Agent
Are you thinking about becoming a real estate agent but are wondering about what the pitfalls might be? Venturing into real estate can be a rewarding experience.
Unlimited income potential, flexible schedules, being your own boss, opportunities to interact with people from all walks of life, and the list goes on. To ordinary folks, the world of real estate is all roses and sunshine.
But to real estate agents, the industry is reeling on all sides.
From market disequilibrium resulting from low inventory to rising interest rates to the shifting political climates…real estate agents have to contend with a lot of external threats that dictate their earning potential. But that’s not all!
The real threats come from internal forces, especially having to deal with people, and humans are by nature unpredictable. In this post, we’ll explore the common pitfalls of being a real estate agent and explain how to fix them.
1. Disagreement Over Prices
But not all negotiations go as planned. At times, you’ll come across clients that will offer unrealistic prices. They want it all for nothing. They’ll want to buy the house at a price that is significantly lower than what the house is worth.
Such clients will likely have complaints about the neighborhood or house conditions—a strategy they use to get you to consider their counteroffers. And if not handled well, such buyers can post negative things about your brokerage on social—a move that can damage your reputation.
To overcome this challenge, you’ll need to have a deep understanding of the neighborhood, the housing market, and the condition of the house. You’ll also need to have information about the prices of similar houses in the neighborhood. Then present the facts and statistics to the homebuyer to justify your offer price.
2. Organizing & Managing Transactions
A single real estate transaction involves a lot of paperwork.
That said, the better part of a real estate agent’s job involves dealing with massive paper trails and clutter. When not in the field, they’re busy in the office dealing with administrative tasks such as preparing purchase documents and arranging for title searches.
As the tasks increase, agents often struggle to track the status of the required documents and transactions. At times, the required paperwork may go missing, important tasks may fall through the cracks and it can be hard to beat deadlines.
One of the remedies for managing transactions is to invest in robust transaction management software. The best software for transactions management offers features, such as electronic checklists, that sync with your calendar and even send you reminders for upcoming tasks.
For example, with the Paperless Pipeline’s checklist, you’re able to monitor which contracts are missing important documents. You’re also able to categorize tasks by priority, thanks to priority labeling which ensures you’ll never miss a deadline.
3. The Changing Forces of Marketing
A few decades ago, real estate marketing was pretty simple; Just place a newspaper ad and potential buyers will begin to flock in.
Today, marketing has changed dramatically. There are a dozen avenues for advertising and this makes it hard for real estate agents to determine the best option. From real estate Facebook ads to Google ads to launching a real estate blog…it’s hard to keep up with the times.
And when you have everything under the wraps, a new tool, feature, or trend will come up and disrupt the industry for a while. That said, you’ll want to keep up with these trends, failure to which you risk being kicked out of the competition.
Add websites such as Social Media Examiner to your daily reading list to always get news about social advertising and any trends that are rocking the digital marketing niche. Secondly, don’t be afraid to experiment with any marketing method that has been proven to drive results.
4. It Takes Time to See Results
Even if real estate is a profitable venture, fast results are rare.
Selling 20 houses in your first year doesn’t often happen, and even if it does, this doesn’t guarantee an explosive success in the second year. Typically, most agents begin to see real results after around 3 years.
During this time, you’ll need to work extra hours, leverage every marketing strategy available, participate in networking events, and even spend money on advertising. Continuous relationship building will be the key to winning at real estate.
Work hard and be patient. Success in real estate doesn’t happen overnight but with utmost dedication and hard work, you’re bound to see results sooner or later.
5. You Don’t Keep All of the Commission
Many people have the impression that all the real estate commissions go fully into the agent’s bank account. The truth is; the agent gets to keep only a portion of that commission.
Keep in mind that real estate agents are not licensed to work independently. They must work under a broker. This limits their earning potential because even if they do all the marketing, a percentage of the commission will go to the brokerage.
Most sellers pay brokers a fee of 6%. Agents usually get a percentage of that commission, which could be anywhere between 30-80% depending on the agreement between the agent and the broker. When you factor in marketing expenses, your take-home from a single sale is dramatically reduced.
Look for a brokerage that compensates their agents well. Some brokers offer attractive bonuses to their agents and even bear all the marketing expenses. The second thing you can do is to keep expenses at bay, especially if you’re the one paying for the marketing expenses.
Final Thoughts on Real Estate Agent Pitfalls
These challenges are common and have been faced by many real estate agents. But with a wise approach and a dogmatic desire to succeed, you’ll be able to overcome them all. Hopefully, you have enjoyed learning about the pitfalls of being a real estate agent.
About the author: Erika is a content strategist and producer who believes in the power of networking and quality writing. She’s an avid reader, writer, and runner.