In many ways, real estate is an attractive industry to launch a career in. It offers a certain degree of flexibility and opportunity that you can’t find in other jobs. You set your own hours, earn commission, and are considered an expert in your field. The benefits are great, and the work is rewarding — but the learning curve can be a sharp one.
This is why most agents — 75 to 85 percent, in fact — fail within their first five years on the job. Many new agents just aren’t prepared for the hurdles they’ll face. But if they’re equipped with the tools and training they need, they can flourish in real estate and reap the benefits. Let’s talk about the struggles so many real estate agents face and how you can overcome them to create a highly rewarding, lucrative career.
3 Struggles of New Real Estate Agents and How to Overcome Them
Every new job requires you to learn new things, but new real estate agents face a unique set of obstacles. Here are three that I’ve seen stop new agents in their tracks — and some tips for how agents can get past them.
1. Fully Understanding Contracts
Real estate contracts are typically written by attorneys, and although most agents have some kind of post-secondary education, only 30 percent have completed a bachelor’s degree. When you’re filling out legally binding contracts, you want to be sure you fully understand what you’re reading, what your signature binds you to, and what it means for your client. The final point is key. Many agents subscribe to the idea that their clients are adults and are, therefore, responsible for making their own decisions. But at the same time, clients trust their agents’ expertise and rely on their experience and help.
Don’t underestimate the legality of contracts, either. Once a contract is agreed upon, buyers and sellers start making big decisions that can cost them a lot of money if the transaction fails to close. That responsibility isn’t all on the client’s shoulders. You must hold yourself accountable as an expert and use that knowledge to help your client.
How to overcome it: Most real estate license exams don’t go into enough detail about legal contracts, and most real estate offices aren’t investing enough in training new agents on how to understand them. You don’t have to (and shouldn’t) rely on the training your office offers. Go the extra mile and invest in some online courses. Consider enrolling in some classes at your local college to dive deeper into the meaning of important legally binding contracts.
2. Maintaining Emotional Strength
The real estate business is full of ups and downs, and for a new agent, the downs can be devastating. Say you spent a lot of time working with a buyer, and suddenly, the buyer notifies you that he or she found a house and had another agent write it up. The disappointment of missing out on a sale — and a paycheck — can be crushing at the beginning of your career. However, dwelling on it and letting it hurt your self-esteem will only make it worse. If you’re short on emotional strength, this profession will eat you up.
How to overcome it: Disappointments are inevitable in real estate. So be prepared to face your failures and have the confidence to know you’ll come back stronger next time. You can soften the blow of disappointment (and grow into a better agent) by ensuring that you’ve done absolutely everything in your power for your clients.
If you understand the contract and explain it in full, know the market and use that knowledge to help your client, and negotiate on his or her behalf, you’ll not only be well-respected in the marketplace, but you’ll also be able to rest easy knowing you did your best. Seek a win-win outcome and show respect to all parties; the rest is out of your hands.
3. Running a Business
When you start a “conventional” business, you go to the bank and secure a business loan, but banks tend to resist the commission-only pay system that real estate agents work under. As a result, most new agents are underfunded, and often, they underestimate the upfront costs required to get their careers rolling.
Many other commission-based businesses offer a salary against commissions to provide financial support while beginners get their careers off the ground, but most real estate offices don’t provide that kind of program. Financial insecurity only adds to the difficulties that new agents face.
How to overcome it: Take business courses, attend webinars, or get a business coach to help you learn how to run your own business. Learn QuickBooks and produce a profit and loss statement for your business every month. Focus on what you can control — such as the daily habits of prospecting and meeting new people — and the sales will follow.
Everyone starts somewhere, and though it’s not uncommon to encounter a few barriers, there are ways to make yourself an exception to the norm. Do your research, give your all to your clients, and learn to run a business, and you’ll be set for a successful future in real estate.
Jeff Thompson is managing partner at Windermere Group One. WGO is a member of Windermere Real Estate, a real estate network comprised of 300 offices and more than 6,000 agents throughout the western United States. Jeff is truly passionate about helping build companies by building their people. He leverages his 25-plus years of experience in real estate to coach other managers and brokers. Jeff credits much of his success to hard work and a willingness to partner with good people.