7 Challenges of Being a Real Estate Agent and How To Avoid Them

The Reasons Most Real Estate Agents Fail

Real estate professionals face a different set of challenges from most careers. In the real estate industry, you are required to know about a lot of different areas like law, negotiations, social media, sales, and business development. All while continuing to find new clients to help your business grow.

Like most things in life, the reality of the career and the impression given can be wildly different.

Why real estate agents fail

Think about a head chef at a gourmet restaurant in your city. The career seems like fun! Coming up with new recipes and trying different foods. What you don’t see are challenging customers, people management, reputation management, marketing, health codes, and paperwork.

When you think of the challenges of being a real estate agent, your mind may automatically go to the difficulties that you see on Million Dollar Listing where the agent is struggling to find common ground on pricing with another party. Emotions are high and they show the stress behind the negotiation. This is part of the job, but the real challenges are not those that you see on TV.

The truth of being a real estate agent is there are a number of moving parts in your career and the challenges can be hard to overcome.

In this article, you will learn the 7 challenges of being a real estate agent and why the failure rate in this industry is so high. Plus you will get actionable real estate tips to avoid these difficulties and what to do when you are comforted with them.

Why people think real estate is easy

Ask most consumers if they think real estate is a hard job and you will get mixed answers. A large portion of the population will think that real estate involves opening up doors and negotiating deal. This is not the case.

People form opinions based on what they can see. However, there is so much more to a career than meets the eye. If you are in real estate, you will quickly find out that opening doors and negotiating contracts barely takes up any of your time. The real job goes much deeper than this and you need to learn skills that you didn’t think were necessary to succeed in real estate.

Cheatsheet: 6 Ways REALTORs® Can Get What They Want

Before you look through the challenges, know that all these challenges can be overcome. Real estate does have a high failure rate, but you can be very successful if you are willing to work.

For a quick boost, have a look at the 6 Ways REALTORs® Can Get What They Want below

How to be successful in real estate

Challenge 1: Most people get into real estate with the expectation of having a lot of time

One of the most common reasons that new real estate agents get into the industry is the promise of making your own schedule. There is a false image that as a real estate agent you wake up and bum around all day until your showings in the evening.

If you are in the industry, you will know that if you want a lot of time off, you can have it, but you better have another job because you will make little to no income.

Most successful real estate agents work hours that would drive most people up the wall. You could be working on real estate marketing in the morning, contracts in the afternoon, and showing properties all evening.

“No worries”, you say, there is always the weekend. If you are a new real estate agent and you are taking weekends off then you may want to start looking for another job soon. You will be grinding long hours for very little pay off in the beginning.

The first challenge is the illusion that real estate agents have a lot of time.

What to do about it:

If you are getting into real estate or new in real estate, prepare for long days of hard work. Even working long hours doesn’t guarantee you will be successful, you need to be doing the right things with the time that you have.

Make a schedule focused around prospecting and business building. Give up the need for the free time early in your career.

Challenge 2: Most people expect to be making a lot of money when they get into real estate

Thanks to TV shows and movies depicting real estate agents as ultra-ballers, many REALTORs® think they will be making Benjamins before they know it. They think of their last real estate agent and how she/he drove a BMW and always had a nice watch on.

What they didn’t see was that the car was leased and buying the watch meant making cuts in other areas just to maintain appearances. Now, don’t get me wrong, there can be great tax advantages to leasing and there is an element of appearances that are important in real estate, however, not every real estate agent is making the money that would be reflective of another person with a new BMW and an expensive watch.

You don’t make any money if you don’t sell any homes and most real estate agents sell very few homes each year. Some reports suggest the average REALTOR® sells fewer than 6 homes per year.

If you are thinking, “well that isn’t too bad” don’t agents make like $10,000 per house sale?” See Challenge 3.

What to do about it:

You need to set proper expectations of how you will grow your real estate business. If you get in with the thought that you will be a millionaire overnight, you are setting yourself up for a rude awakening. Budget your finances and continue to work hard even when you are not producing. Real estate is a long term game and the money will follow years of hard work and dedication.

Challenge 3: You don’t keep all of your commission

As noted in Challenge 2, many people have the impression that the commissions go fully into the agent’s bank account. The challenge here is you are running a business. When you buy groceries the store manager doesn’t clear out the tills every night and fill his pockets with the revenue.

In real estate, you a running a business and like any other business, revenue and net income are very different numbers.

Let’s look at some common expenses that a REALTOR® has and some rough numbers

*These numbers can vary

Brokerage: $10,000 - $40,000/Year

MLS Dues: $1,500 - $4,000/Year

Operating Expenses: $20,000/Year

Marketing Expenses: $20,000/Year

Taxes: $15,000/Year

These are just some main categories. The list could go on and on. The big thing to note here is if an agent makes $100,000/Year, they are likely keeping around 30% of this.

When you discuss commissions with a consumer, they can getting that $10,000 is going right into the real estate agent's pocket, and if it was, then agents would be overpaid.

Only a piece of this makes it into their bank accounts and they have endless expenses to continue to market themselves.

What to do about it:

Make a business plan and bear in mind you are running a business just like any other company out there. Drop the mindset that you will be keeping all your commissions because if you do try and keep the majority of what you make, you run yourself out of business when the consumer selects an agent that provides way more service.

On the other side of the coin, keep expenses at bay. Don’t spend frivolously and look at the return on investment for your purchases.

Challenge 4: People will not just start calling you and hiring you to sell their house

As a new real estate agent, you might think that once you get a website and social media handle, leads will start pouring in and you will be moving and shaking before you know it. Unfortunately, this is not the case. You will be working long hours prospecting for new business. Calling for-sale-by-owners, door knocking, sitting open houses, talking to people you know, calling expireds, before you see any business.

If this industry was easy then everyone would do it and be making a killing. This industry is hard and you need to work for every deal you get. The challenge is business will not fall into your lap without grit and perseverance.

What to do about it:

This challenge is also a huge positive. The fact that people won’t be easily calling you all the time means that for those that are willing to work hard, there is more business for you. If you dedicate your time to prospecting and hustling, there will be more business for you because most agents sit back on their heels hoping for business to come to them.

Challenge 5: It is rejection heavy work

In real estate, you will be told “no” many times over and you need to keep pushing on. Look, we don’t naturally like rejection. As humans, it’s in our genes to desire to be accepted.

In real estate, rejection will happen everyday. If it isn’t happening every day, then you probably aren’t prospecting enough. You need to get used to the word “no” and “I’m not interested”. We teach our students to not pester people but follow up is crucial. Most real estate agents run the risk of not following up enough versus pestering people too much. You will either get thick skin or this business will walk all over you.

What to do about it:

As with Challenge 4, this can be an advantage because most agents are not willing to push through the long days of rejection. Develop a mindset that applauds the effort you put in and not the result that you get. If you focus on the result only (sale) the rejection is enough to break a REALTOR®, but if your goals surround effort, then no amount of rejection can impact you because you are only focused on continuing to put in the effort.

Challenge 6: You need to figure out people, sales, and psychology

As a real estate agent, you are now running a business focused around people and not just people going through their normal day; you are dealing with people in high-stress situations and people on emotional rollercoasters.

Even if you think you have great people skills, you will need to learn more. In real estate, you are dealing with delicate situations. You need to be firm but soft. Direct but nice. Persuasive yet caring. Fast yet slow. Detailed yet creative.

You will meet people from all walks of life and you need to meet them where they are at in the process and help them through the journey.

What to do about it:

Study people skills, sales, and psychology like it is going out of style. Most decisions in real estate have an element of emotion tied to them so you need to be able to handle this emotion and appeal to the person regardless of their personality type.

Challenge 7: It will take minimum 3 years to see results

Fast results in real estate are rare. Selling 10 homes your first year does not happen very often and even when it does, this doesn’t guarantee that you will improve your second year. You need to be prepared for consistency for 3 years before you will see real results.

This isn’t just 3 years of going through the motions. It is 3 years of hard work, dedication, and getting out of your comfort zone.

Real estate is a long term game. In most cases, the effort you put in today will pay off in a minimum of 90 days.

You need to be willing to put in the long term effort in order to see your real estate business take off.

What to do about it:

Work fast but stay consistent. Most real estate agents will begin with lots of energy and excitement. They will hit the ground running but this will dissipate as time goes on. When the sales aren’t coming and when you are hearing “no” over and over, you will need to buckle down and work harder. Success in real estate is not guaranteed but with 3 years of hard work and dedication, you should start to see some results.


There are a number of challenges you will face as a real estate agent, however, becoming a successful REALTOR® is in reach.

To become successful you will need to put in long hours of hard work. It’s just enough to work long hours OR work hard, you need to do both. You need to delay gratification for years in order to see your success take off.

Here is the amazing thing, most will not put in the effort required to be successful and push through the challenging days, months, years, so if you are dedicated to making your real estate business successful and you are willing to put in the work, you can have a lucrative and fulfilling career as a REALTOR®.

Follow Up Reading:

Build Your Network as a REALTOR®

Best 15 Prospecting Ideas for New REALTORs®

Top 10 Habits of Successful Real Estate Agents

Questions: What are some unforeseen challenges that you have dealt with in your real estate career?

-Michael Montgomery