Avoid These 4 Common Pitfalls of Real Estate Agency Life

Of the many compelling reasons to become a real estate agent, the potential to make a high income tops the list for most. Not to mention those flexible work hours and the thrill of being in a fast-paced industry, which are also highly attractive. However, not all aspects of the job are perfectly rose-coloured. In real estate agency life, pitfalls exist that realtors need to avoid in order to build on their success.

Potential pitfalls of real estate agency life can limit an agent’s ability to unlock their full potential as a real estate agent. In today’s article, we’re sharing the four common pitfalls most agents face and our tips on how to overcome them.

Pitfall 1: High Real Estate Agency Commission Rates

Most real estate agencies have high commission rates. And, it’s not uncommon for a brokerage to take as much as 50%. This model of business means unlocking wealth potential can be challenging for real estate agents who are locked in a high brokerage commission split. 

To be fair, there are good reasons for junior agents to agree to high agency commission rates when starting out. High commission splits usually mean zero desk fees or other overhead office fees to pay, which is good when learning the ropes of the business. But, as realtors become experienced and established, this model can keep them away from hard-won earnings.

How to Avoid High Commission Splits

Virtual Real Estate Agency

A realtor who’s confident in their potential can quickly become frustrated with traditional brokerage rules and finances. And, when most of an agent’s earnings go towards referral fees, brokerage commissions, and personal marketing, it’s easy to see why the majority of agents fail within their first 5 years.

Getting stuck in the financial drain of traditional agency life can be avoided and overcome. We recommend the following ways to get away from paying high brokerage commissions:

  • Switch to a brokerage with lower commission rates.
  • Capitalize on referral earning opportunities.
  • Join a virtual real estate agency for low commission rates and zero desk fees.

Pitfall 2: Low Support from Real Estate Agency

Collaborating with other agents is absolutely essential for realtors to grow their property business. However, many agencies aren’t properly set up to provide adequate support and guidance to their agents. And, those that do provide internal mentorship and training often expect agents to fork out more cash to access their educational opportunities.

This way of doing business prevents capable agents from developing the necessary skills needed to thrive in the real estate industry. And, while it does keep a certain level of competitive edge in the marketplace, it also prevents the real estate community from moving forward positively.

Find a Supportive Real Estate Community

Recent developments in technology have opened doors for several industries, and real estate is no exception. Online platforms, such as eXp Realty’s Virtual World, are enabling brokers to access training opportunities and mentoring programs unlike ever before. Cloud-based brokerages not only lower agent fees and expenses, but they also increase agents networking abilities and collaboration options.

Pitfall 3: Limited Room for Growth in a Real Estate Agency

Joining an agency loaded with top-selling brokers and agents doesn’t mean new members will access the same benefits as their co-workers. Sharing and assigning leads within a real estate office is often hierarchical. Often, high-earning agents are granted priority access to highly lucrative opportunities over junior agents.

How to Unlock Growth Potential 

Real Estate Agency

Realtors who actively generate leads and sales can prevent being held back by traditional agency structure. With a brokerage that uses a non-traditional business model, agents can unlock their potential for success. Modern brokerages, such as eXp Realty, encourage agents to explore new opportunities while giving them the freedom and flexibility to do so.

The new business model employed by eXp Realty allows our agents the following advantages that lead to business growth:

  • Lead generation tools
  • In-house training
  • Mentorship programs

Pitfall #4: Inconsistent Cash Flow with a Traditional Brokerage

Historically, real estate agents generate income solely from the transactions and deals they are personally involved in. Firm owners and operators have an advantage as they earn cash from commission fees earned when their agents close deals. However, both agents and agency owners are at the mercy of fluctuating market conditions leading to inconsistent income.

Inconsistent cash flow can cause many to question if being a real estate agent is right for them. And, if financial constraints become too difficult, it can force them to leave the industry. Plenty of agents with a passion for real estate quit real estate due to financial constraints caused by poor market conditions!

Earn a Secondary Revenue Stream

To ride out a particularly difficult housing market, realtors often take on other employment to maintain cash flow. Unfortunately, this means the agent is unable to fully focus their efforts on growing their real estate business. And, this can result in missed opportunities.

However, earning a secondary source of income doesn’t have to pull an agent in multiple directions. With a brokerage that puts their agents’ needs upfront, agents can create opportunities for consistent and generous secondary income within the industry.

For example, in addition to a low annual commission cap, eXp Realty members can earn money from the following sources:

  • Revenue sharing
  • Equity stock options
  • Earn back paid commission cap in stock
Cloud-Based Real Estate Brokerage

Explore the Potential of a High Growth Life

High Growth Life focuses on a new way to do business in the real estate industry that creates opportunities with unlimited potential. To learn more about high growth living, or for information on becoming part of eXp Realty, contact Phil or Randy.

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Phil Hahn

Phil Hahn

Phil Hahn didn’t become a top 1% REALTOR® by following the status quo and sticking to the same old script. He did it by recognizing opportunities, creating connections, and giving 110% to every client, every day. Unsatisfied with being the best of the best, Phil sought new challenges and discovered eXp Realty. After reviewing the numbers and long-term strategy, he recognized the fledgling brokerage’s potential and joined them as a mentor. Using the tools, processes, and advanced technology of eXp, Phil is actively working with high-performing real estate agents in Canada and the United States to help them succeed in their business and excel in their market.


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