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19 Problems of being in a real estate industry

19 Problems of being in a real estate industry

13 Min read

With the fluctuation in the economy and growing trends, the real estate industry has had its fair share of challenges. Realtors are constantly tackling all the hurdles by themselves while also staying in business.  

In order to achieve steady growth in the real estate industry, it’s essential to determine the problems that are hampering your revenue. So, let’s take a glance at the 19 problems that every realtor faces. 

1. Not having enough listing 

How would you feel if you went shopping at a store or an online website and found only 3-4 options? Disappointed, right? 

Likewise, when a buyer comes looking for a house, they expect to receive plenty of options so they can find the property that exactly meets their criteria. 

If a realtor is running low on inventory, it puts a bad image of their company. An unappealing IDX website with only a few listings won’t do any good for the business. Therefore, you must ensure that there are sufficient listings on your website. 

Solution: Grow your network; connect with local businesses, people, and list local news and events on your site. With such helpful resources on your website, more people will be inclined towards your website. Moreover, by keeping your visitors updated, you collect more leads to eventually convert into customers.  

Leverage on your current listing. Make an irresistible ad, below is the example of a perfect ad.  


Why it makes the perfect ad?

  • Use of fresh copy “Just listed – best-priced home”
  • The image is clean and appealing 
  • Use of sections that highlights unique aspects of the house 
  • Not so wordy content – crisp and clear message 
  • Use of words like “Quick” in the CTA 

2. Lead cost is high as compared to the conversion ratio 

When you focus only on capturing leads than nurturing them, your conversion ratio is sure to decrease. Capturing and buying leads from various platforms such as Google Ads, Zillow, and other paid campaigns, your lead cost will skyrocket. 

With high lead costs and lower conversion rates, it becomes impossible to keep up with such a high cost per lead. 

Solution: The only way to break free of this vicious cycle is to improve your conversion rate. Once you achieve a higher conversion rate, your lead cost will decrease. 

To convert more leads into customers, your business needs a streamlined sales process. Once you capture the lead, segment them on their preferences, interest, location, and behavioral patterns; this data will give you a gist on how likely the leads will get converted – gradually improving your lead conversion ratio.   

high-end CRM for real estate can automate the above process for you, providing you and your team with sales-ready leads. 

3. Not having an established sales process  

From listing a house to closing the sale, real estate sales process consists of many stages. To have a clear view of your sales process, every realtor needs to establish a solid sales process that they must follow in order to keep it organized. 

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Solution: Build a solid real estate sales process that covers every aspect of your business and helps grow your customer base. With a streamlined process, you can capture quality leads and nurture them to guide them through the top funnel. 

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4. Not knowing where the deal is in the sales process  

 Not knowing where the deal stands, can affect your bottom line. If the deal is taking too long to close, you must act upon it right away and push it towards closure. Likewise, when you have a hot lead, you must pay more effort to turn them into a customer.  


A sales pipeline gives you a visual representation of where your prospects are in your sales cycle. By identifying where the leads are in the pipeline you can take the necessary step to motivate the prospect to close the deals. 

5. Failing to leverage on technology 

Are you still following the traditional method of listing properties in magazines and newspapers? As much beneficial as that is, technology has grown by leaps and bounds in the past few decades. If you’re not leveraging technology for your business’s growth, your competitors will gain an edge over you and attract more leads their way. 

Solution: Use the resources such as social media, listing websites, and other platforms to build a solid customer base and capture leads. Analyze and know which platform the majority of your target audience is found and strategize your marketing plan accordingly. 

6. Failing to leverage on referrals 

If you were a customer looking to buy a property, would you rather ask your known one about their experience with a certain realtor or rely on a website? We’re assuming that most buyers would trust their friends or family more. 

Real estate business mainly runs on referrals; 25% of agents generate more than 50% of their revenue through only referrals! Shocking, right? When a realtor doesn’t have clients backing his work and referring to others, it becomes difficult to get more leads. 

Solution: Whenever a person closes a deal, the sales process doesn’t just end there. Even after you’ve sold something, it’s vital to stay connected with clients and nurture them. By building a strong relationship with your customers, you’re more likely to get referred to others. So, nurture your clients by sending personalized messages, providing a solution, and consulting when required. 

7. Abiding to real estate agent laws  

Handling properties, selling them, or renting them comes with a lot of responsibilities. Buying a selling of landing consists of numerous rules that the government determines. As a real estate agent, you must abide by the real estate agent laws that consist of confidentiality, making the buyer aware of any default in the property, and so on. 

The transaction between a realtor and a buyer must have transparency to benefit both parties. 

Solution: To get rid of manual paperwork, use CRM to arrange all your legal paperwork. Prepare a checklist, and ensure you’ve got everything covered before making any sale. Moreover, you can also log conversations in your CRM so you can use them in the future as a reference. 

8. Managing the back-office task 

Keep track of all your back-office tasks can be a hassle. If you have recently started a real estate business and think you’ve got plenty of time on your hand, you might want to rethink your decision. The real estate industry is hectic; you need to stay on your toes all the time to capture more leads in the market. So, you can’t stay relaxed, thinking just because you have a website, the leads will come straight to you. 

Solution: Hire a real estate agent who is skilled enough to easily manage all your administration tasks. See if they exactly map your requirements. Some of the top skills requirements in a real estate administration agents are  


9. Increasing presence of online estate agents 

With more and more Millenials and Gen Z investing in real estate, realtors have put their preferences into consideration. This generation wants everything online; from shopping to acquiring services, everything is just a click away. Therefore, an increase in online real estate agents has boosted the competition. And if you want to keep growing your business, you must stay on level with others. 

Solution: Build an online presence and share resources as well as information. It would help if you had top-of-the-funnel traffic, too, when you want to drive more visitors to your website.  

Therefore, stay active on various social media platforms and leverage them to build a community that puts trust in your business. 

10. Dealing with unrealistic sellers  

You must have come across certain sellers that have highly unrealistic expectations from their properties. Whether it’s the price they’re quoting or the time frame they have given to sell the property, if it doesn’t go well with your calculation, keep it clear from the first day. Many sellers compare their houses to the others in the neighborhood and want to sell as quickly as others. It’s your responsibility to make them understand the real scenario. 

Solution: Understand the seller’s requirements and think from their perspective to gain insight. Thereafter, if you believe that the property is overpriced or underpriced, communicate the same. Moreover, make your seller aware of the closing cost before you share the final amount, so they’re not shocked at the end, and your deal falls through. 

11. Managing paperwork 

If you don’t want to get lost between a pile of paperwork, you need to form a proper workflow. Managing the paperwork of every property and client can take a toll on you and consume most of your time. In fact, this can also hamper your overall productivity at work. 

Solution: Get a CRM that eliminates the dependency on manual paperwork and digitize your documents. Have access to all your documents within your CRM and exchange e-signed documents to speed up the documentation process. This way, you can have access to all the important information even when you’re on the way to meet your client. 

12. Finding common ground on pricing with another party 

Every seller or buyer has different prices in mind when they come to a realtor. And when their price doesn’t match your offer value, clashes are bound to happen. A realtor considers the location, market value, competitors, and closing cost before finalizing the price. On the other hand, sellers usually compare their price to the neighborhood’s house, making it a difference between parties.  

Solution: Find common ground where both parties can agree on the price. If they deny your rate, make them understand the entire property valuation process so they can get on board, and it’s a win-win for both parties. 

13. Calculating taxes and other deductibles 

This is one of the essential stages of selling any real estate property. Many realtors find it challenging or rather miss out on certain taxes or deductibles before quoting a price. And the difference between offered price and final cost creates trust issues among the client and real estate agent. 

Solution: You need to take property tax, escrow charges, application fee, warranty into consideration before finalizing the price of any of your listing. You can create a chart explaining all the taxes so even the seller or buyer is aware of them. 

14. Dealing with tons of rejections 

With the growing competition among real estate agents, rejection is inevitable. Not every client will go through your offer, so at some point, you will face rejections, and that’s part of the process. However, just because a couple of clients rejected your offer doesn’t mean your services aren’t up to the mark.  

Solution: Even if you’re facing rejections, don’t give up and keep nurturing clients. They might not be interested in the property you offered, but they may be interested in future projects of yours. So, you can keep sending personalized messages and emails to stay connected with cold leads. 

Motivating fact: 

60% of customers say no four times before saying yes whereas 48% of salespeople never even make a single follow up attempt 

15. Real estate appraisal issue 

Real estate agents face appraisal issues on a regular basis. According to the National Association of Realtors, appraisal issues are the cause of 18% real estate contract delays. The value of a property is appraised by a professional after the deal is closed. Therefore, the appraisal of property causes clashes between parties. A professional will assess the property and determine the fair value to the seller.  

Solution: Price the property fairly, so even when the appraisal comes in, it doesn’t have a vast difference. Educate your clients about the appraisal process and always keep them in the loop while making any important decision or modification.  

16. The home isn’t insurable 

There are times when real estate agents take up properties that can’t be insured. It’s possible that the house is at high-risk and can’t get any insurance, and that drawback puts your deal on hold. In case of such property, FHA denies insurance based on the condition of the house. 

Solution: In such a scenario, you can communicate with your client, and convey the situation. In fact, if the property isn’t insurable by FHA, you always have an option to approach private insurance agencies; just keep in mind that their premiums will be comparatively higher based on the risk. 

17. One of the parties having a cold foot 

Since purchasing a house is one of the major decisions for anyone, it’s natural for the client to have a cold foot. This usually happens when you’re just about to close the deal, which may put all your efforts at risk if not handled properly. 

Solution: Put forward a strong proposition that offers value and communicate clearly with your client. See it from their perspective and approach accordingly so you can close the deal without any hassle. 

Hear from the expert: 


18. No certainty of payout for brokers 

Real estate brokers put all their effort into preparing the listing, staging the property, approaching interested clients just to gain the brokerage that also sometimes doesn’t go through. It’s a fact that there’s no certainty of payout for brokers, which puts their job at risk.  

Solution: Ensure you convey the brokerage fee to your client before closing the deal. In fact, including the brokerage in closing cost is recommended, so when you’re explaining all the expenses, the client will be aware of the broker’s fees. 

19. Title issues 

Another common challenge that realtors face is title issues which makes the title transfer difficult. The reason for this could be anything from illegal deeds, forgeries, unknown liens, undiscovered wills to errors in public records. 

Solution: To avoid this problem, you can do your thorough research about the property beforehand. Moreover, to ensure your client doesn’t face any problems, it’s best to protect the property with title insurance. Title issues are covered in ‘owners policy’ when you have the title insurance. 

Final thoughts 

You’ll certainly face challenges at every step of your real estate journey, the key to overcome is to abide by the rules and prepare a streamlined workflow. With a CRM that’s built for Real estate, you can manage your entire sales process, and tackle these challenges seamlessly.  

Being an ardent reader and content editor, Jainy draws inspiration from every situation and story. She spends her time developing creative content to invoke the reader's interest. An ambivert with an interest in art, when she's not writing, you'll find her reading or occupied in a creative project.

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