Thinking of becoming a real estate agent? It’s not as glamorous as you may think. Yes, the potential for earnings is high. Really high. But here’s the simple truth: most real estate agents fail. If you’re considering becoming an agent, we implore you to consider these five things before taking the plunge.
#1) The industry is changing and nobody knows what is going to happen.
It doesn’t take someone in the industry to understand we’re undergoing a major shift as real estate agents. Services and websites such as Redfin and Zillow are changing the way consumers are buying and selling properties and many are beginning to question the value Realtors bring to the table within the traditional brokerage model. While trends indicate consumers are relying on real estate agents more now than in the past 10 years, there’s no guarantee that momentum will continue. For such a big industry, the real estate market feels particularly vulnerable to advancements in technology and could be one Uber-like app away from turning the entire industry upside down. The saving grace is that local and national regulations have made buying and selling a home a pretty complicated matter in which having a real estate agent will not only to be fruitful, but invaluable.
#2) There are too many real estate agents.
With over 1.2 million agents in the United States, it’s harder than ever to stand out from the crowd. What makes you special? Why would a client use you over another agent? What value do you bring to a real estate transaction? If you can’t answer these questions, this may not be the career for you. The truth is that the barrier to entry in becoming an agent is EXTREMELY LOW while the potential for earnings is EXTREMELY HIGH – which means every Tom, Dick, and Sally is becoming a Realtor.
#3) Your job isn’t hard. Stressful? Yes. Difficult? No.
Agents, it’s time for you to be honest with yourselves: Your job isn’t hard. Yes, we know – getting new leads can be a challenge and some clients can test your patience and faith in humanity, but generally speaking: Being a real estate agent is actually a relatively simple job. That’s one of the reasons why there are so many of you! With the way buyers today are shopping for homes (spoiler alert: on the Internet), a lot of properties will simply sell themselves if priced correctly and if you hire a good photographer. What makes a great real estate agent is in the details: local neighborhood expertise AND a wide rolodex. As a real estate agent, you are in the people business. If connecting with people doesn’t come naturally for you, chances are you are made the wrong career choice.
#4) Certain markets could be in for a rude awakening.
Millennials are finally becoming homeowners and here’s what we know: 1) They value living close to where they work (though surprisingly, still prefer the suburbs). 2) They have less money to spend than previous generations. And 3) They don’t want to waste time or money fixing/upgrading a home. The combination of these three factors means historically high-priced suburbs located far from an urban epicenter are going likely to take a big hit in the coming years. Here in the Chicagoland area, the effects in certain areas may already be taking hold with suburbs such as Lake Forest experiencing serious slowdowns in the market. With another real estate price correction expected around 2019, agents serving areas fitting that criteria may see activity grinding to a halt.
#5) It takes money (and effort) to make money.
Generating leads and marketing yourself as a real estate agent costs money. A lot of money. In fact, brokers and real estate agents in the United States spent over $8.9 billion on residential advertising alone in 2015 (it’s likely this number has gone up since then). Between mailers, brochures, business cards, commercials, and billboards – there’s no shortage of ways to spend your cash advertising yourself as an agent. The harsh reality is that those who spend more money tend to bring in more business. Luckily for us, there exists a great neutralizer: social media! With websites such as Facebook, Instagram, and LinkedIn, it’s now possible to make up a lot of ground with considerably less resources – but with a heavy investment in time. There are no shortcuts!