Before considering a career as a real estate agent, it's a good idea to ask, “Is being a real estate agent hard?”
While there aremany reasons to choose a career in real estate, it is important to remember that a real estate agent overcomes many hurdles before their career can take off.
Here are nine of the most challenging aspects of being a real estate agent and ways to overcome them.
#1: Getting Your License Can Be Daunting
For some people, earning a real estate license and starting their practice can be intimidating.
There are extensive pre-license education requirements that you need to fit in around your busy schedule, and then you have to pass a big licensing exam, which can be daunting to anyone with test anxiety. Plus, the application involves a background check, which can be scary if your record is less than perfect.
And then there's the expense of launching your real estate career.
How to Get It Done
Taking courses online with an approved re-license education provider like us can minimize both the expense and the hassle of fulfilling your educational requirements. Online pre-license courses are incredibly cost-effective – think of the gas money alone! Additionally, you'll be able to study on your own timetable and work around your existing obligations.
We can also provide real estate exam preparation resources bundled at a discount with your coursework. These exam prep options include study guides, exercises, and practice tests based on the real thing. By the time you sit for the actual exam, you'll have plenty of experience – and a good idea of your likely score.
As for the background check, the best advice is to be honest on the application. The fingerprint-based background check will reveal any criminal or professional speedbumps, and it speaks better to your character to be upfront. Many real estate commissions will also review your situation ahead of time so you know whether you stand a chance before you spend time and money prepping.
#2: Commission-Based Income Can Be an Adjustment
Most careers offer an hourly wage or a salary. It is easy to predict when and how much your next paycheck will be. These salary or hourly-paid jobs are steady and provide a stable income.
In real estate, agents earn a commission payment. Commission pay means an agent gets paid a percentage of a sale. Your income depends on the number of properties you sell and the price for which the property is sold.
The upside of commission-based income is that you have more significant earning potential. Unlike an hourly-paid or salary job, your income is not capped by the number of hours you work.
However, earning a commission can mean an unstable income and an unpredictable inflow of money. It is difficult to predict your finances.
Additionally, as a contractor, part of your income has to cover professional expenses. On average, real estate agents make between 2.5% - 6% of a sale. Most agents need to pay a certain amount of that commission to their managing broker off the top. Then there are other business expenses. You can learn more in our article on Gross and Net Commission Income.
How to Handle It
Most real estate agents need a plan to cover living expenses for the first few years of their career, because it may take time to get to a place where you earn a lot of money. As you gain experience, build your sphere of influence, and build more referral business, your income will eventually stabilize.
Regardless, you'll need to build long-term financial planning habits because your income can fluctuate from month to month and year to year. This means making a budget, tracking expenses, and putting money aside for lean times.
#3: Time Management Can Be Difficult
The freedom of a real estate job means setting your own schedule. That's an attractive prospect for a lot of new agents.
However, it may be difficult for some people to decide how to spend their time when they start their careers or motivate themselves to build a schedule. It's easy to feel adrift.
How to Tackle It
Check out our time management tips for real estate agents to learn more!
#4: It Is a Relationship-Based Industry
Much of an established real estate agent’s clientele comes from what is known as a “sphere of influence.” A sphere of influence in real estate is the group of people that you have some impact over. It is challenging to build trust among strangers and build a quality list of people who refer to you as their agent. But the few people who trust you to help them buy or sell homes may refer you to their friends and family.
Most people do not buy and sell houses very often. Maintaining a relationship with people over a series of many years until they are ready to use your real estate expertise can be tricky.
How to Build Your Network
Every real estate agent will ultimately find their pathway to success a little differently.
Marketing will always be an important source of new relationships. You'll also want to nurture existing client relationships to encourage a robust referral business.
Another way to build a consistent sphere of influence is to find a group, cause, or hobby that's important to you. It's a great way to meet people, and when someone in one of these groups needs a real estate agent, you will be there to help.
#5: Difficult Work-Life Balance
When you work with people looking for a home, you must adjust to fit their schedule. This means that you work outside of "normal" working hours to meet people for viewings after their workday or on the weekends.
It can be difficult to find time for yourself or your family when working late nights and long weekends.
Solution
The trick is setting boundaries that work for this career. Check out our guide to work-life balance for real estate agents.
#6: The Real Estate Market Can Change
We all know that the real estate market is constantly evolving. What agents fear is a market crash, much like the housing crash of 2008. There is no way to accurately predict the market, which can make this career seem like a risky choice.
However, there isn't much to fear.
Why You Shouldn't Worry
Since the housing crash of 2008,many programs and lawswere established to prevent a similar housing crisis from ever happening again.
People are always going to need shelter, and their needs evolve over the course of their life. Couples grow into families, someone starts looking for their first house, and parents become empty nesters. All of these transitions lead people to seek out an agent.
#7: Legal Liabilities
In many industries, employees can be sued by their clients, and real estate is no exception. Representing someone in a real estate transaction involves significant financial and legal aspects, and if a client believes the agent has acted negligently, breached their fiduciary duties, or engaged in any fraudulent or unethical behavior, they may choose to file a lawsuit. This can cause a huge amount of stress and can take a toll on your mental health.
How to Avoid This
To mitigate the risk of being sued, real estate agents should always act in the best interests of their client, disclose any conflicts of interest, and adhere to the highest possible ethical standards. Another way to stay informed about the latest real estate laws and regulations to make sure you’re following them is by completing your required continuing education courses on time. This brings us to our next tip.
#8: There Are Many Continuing Education Requirements
Every state has different license renewal requirements every few years. As part of the renewal process, every state requires continuing education (CE) every one to three years. These classes serve a few purposes: they're a refresher for what you learned in real estate school, they help you stay up-to-date on real estate laws and regulations, and they inform you about new practices.
Depending on the state, you may need to complete up to 45 hours of coursework. Certain topics will be required, and the courses need to come from state-approved sources.
With a busy schedule, it can be difficult to find time to take these courses. The added expense of taking these courses is also not exciting.
How to Make It Easy
Some sponsoring brokers will pay for their agents' CE courses, but in other cases, it's considered a business expense that's your responsibility.
Continuing education requirements are a lot less burdensome when you take your continuing education classes online. Taking CE courses with a reputable provider like VanEd has a few benefits:
- You know your credits will count because all courses are Real Estate Commission-approved.
- You can take courses anytime and anywhere around your busy schedule.
- Online education is one of the most cost-effective ways to earn your required credits.
#9: What if I Don’t Want to Be an Agent Anymore?
After working as a real estate agent for a few years, you may decide that you are ready to move on to other things. Maybe you're ready for more responsibility, or maybe the fast pace and busy schedule become tedious as you transition into a different phase of your life.
Directions You Can Go
The good news is there are many opportunities to grow within the real estate industry.
After working as an agent for a few years, many professionals choose to upgrade to a real estate broker's license. This opens up opportunities for a larger income, the responsibility of overseeing other agents, or even becoming a business owner and opening your own brokerage! Becoming a broker involves pre-licensing courses and an exam, much like your initial license. When you're ready, we can help you with that!
Alternatively, you can apply your real estate experience to a different job in the field. You can earn your real estate appraiser's license for a change of pace. If you want a more regular schedule, you can shift to property management, become a real estate advisor for investors, or start investing in real estate yourself. These are just a few of the options. Check out our article on real estate careers for more ideas!
Written and Published by: VanEd
