Pros and Cons of Being a Real Estate Agent

Pros and Cons of Being a Real Estate Agent

Pros and Cons Summary

Pros

• Flexible schedule
• High-income potential
• Meeting new people
• Building new connections
• Client referrals
• Helping your clients

Cons

• Initial cost
• Lacks security
• Lots of work
• Stressful career
• Competitive industry
• Ease of entry

Pros of Being a Real Estate Agent



Flexible Schedule

Working as a real estate agent means being your own boss. You can plan your day how you see fit without having to clock in and out of an office. Neither does your working day start or end at a specific time.

Creating your schedule and setting your hours will also free up time for other engagements, giving you a greater work-life balance as well as increased job satisfaction. Of importance is that a real estate career rewards you on efficiency, and not the hours clocked.

Unlimited Income Potential

The real estate profession provides many opportunities to earn unlimited income. Compared to the average U.S. worker, a real estate agent earns 25% more in wages. Furthermore, working on commission means an agent has the potential to earn 2.5% to 3% of a property's sale price.

Commissions can be substantial depending on the local housing market prices. For instance, an average home price of $1 million will see an agent take home a commission of $25k to $30k for a single sale. The ‘no ceiling’ earning potential allows real estate agents to get to enjoy the finer things in life.

Building New Connections

Selling homes to wealthy people often come with high levels of influence. If you can build on those relations, you stand to profit from your strong network for years to come.

Networking through licensed agents-only meetings will also expose you to other real estate professionals that are willing to give you the leg up once they know you're actively looking to buy or sell. Such connections can even give you leads on properties that are yet to be listed on the MLS.

Remember to use a CRM tool that keeps track of all the contacts you make while networking. You can even set reminders to follow up on each lead, and automatically send messages where necessary.

Client Referrals

Clients that are satisfied with your services may not necessarily use your services again. But it's their recommendation of you to their friends and family that is vital. Referrals from trusted sources offer a great resource for connecting with new customers.

This assurance can grow your clients' lists thus having a compounding effect on your income. Besides offering your job some measure of security, client referrals also provide a strong source of future leads.

Ease of Entry

Along with the allure of independence, status, and earning potential, you don't need a college degree to qualify as a real estate agent. A practicing license is all you need to hit the ground running.

To add on, you’ll spend less on tuition fees and other college-related costs including student debt. With that in mind, you don't need to spend $150,000 to study in college if you can finish high school and immediately begin a career as a real estate agent.

Helping Your Clients

The reward of helping a buyer make a decision is one of the most unappreciated benefits of becoming a real estate agent.

Because many clients are looking to fulfill an important life goal, helping them buy or sell a property will add purpose to your profession.

For most agents, the outpouring of gratitude that first-time homeowners express motivates them to achieve the same for future clients.

Cons of Being a Real Estate Agent

Initial Cost

The majority of new real estate agents will take three to six months before they can close their first sale. You can wait even longer if competition in the local market is high.

With that in mind, a new agent will need at least two years’ worth of savings to bolster his or her fledging real estate career. In addition, a new real estate agent may have to spend on lead generation tools and platforms, expenses which all add up.

Lacks Security

Unlike traditional employment, real estate agents work as independent contractors. Because the job is commission based, you won't get paid unless you're selling a property. It’s as simple as that. Before you kick start your real estate career, create a savings fund that will shield you from future cash flow problems during the slow periods.

Stressful Career

Though the experience of helping buyers make major life decisions is satisfying, the whole process is often stressful. This is because buying a house is a life-changing decision for many people.

That said, it's not uncommon to have conflicting thoughts and stress over the entire process. A real estate agent will need to be diplomatic and 'thick-skinned' as the buying decision can be emotionally unpredictable.

No Schedule

Compared to a standard work week of 40 hours, real estate agents can expect to work more hours than normal. Since most viewings and meetings tend to occur in the evenings or during weekends, most real estate agents work outside the standard office working hours. Self-discipline is paramount as the freedom to plan your schedule can make you complacent.

Competitive Industry

Texas alone has over 122,000 real estate agents licensed to work in the state. This means both buyers and sellers have several options for choosing their preferred real estate agent.

Since everybody is looking to grab individual success, support systems tend to be loose. Even in an office setup, colleagues will compete amongst themselves in a bid to bag a client.

That's why agents must work to differentiate themselves. You can do this by branding yourself or finding a niche in a particular property type or buyer. Though most brokers offer agent support, real estate agents are in essence working for themselves.

Hard Work

Looking in from the outside, a real estate career may seem easy, but in reality, becoming a salesperson is the hardest part. The hard work required in such a competitive industry means many new agents will fall by the wayside. But this can be viewed as an advantage for the remaining agents. The high dropout rate means less competition and more opportunities to find new clients.

Final Thoughts

Though the cons of becoming a real agent may dampen some ambitions, the long-term pros far outweigh any disadvantages. A commitment to offering your best will ensure you succeed as a real estate agent. Additionally, agents who persevere through the hard times eventually reap huge rewards.