And how to avoid becoming one of them.
According to the National Association of Realtors, 87% of real estate agents fail in the first 5 years of entering the industry. 75% of them fail in the very first year! These statistics are shocking for sure, but honestly, they are not surprising. So why are these numbers so high? Let’s discuss a few of the most common reasons why new agents fail and how to avoid becoming one of these statistics.
They Don’t Work Hard Enough
Being a successful entrepreneur takes a lot of hard work. It doesn’t matter what industry, starting a business is going to mean long hours and lots of blood, sweat, and tears.
One of the top reasons why real estate agents fail is because they simply do not work hard enough. Successful real estate agents work long and odd hours. There are few successful agents who work “bankers hours” of 9 am – 5 pm; Monday through Friday.
In real estate, there is no such thing as “typical hours.” Being a successful real estate agent means working many nights and weekends and being available via phone or e-mail nearly 24 hours a day (ye, your clients expect you to answer their calls at ALL hours of the day). Odds are, you will end up showing houses at 9 am one day and writing contracts at 10 pm on another. The most convenient times for your clients are usually evenings and weekends. This doesn’t include the plethora of paperwork, phone calls and marketing you’ll be doing during the day.
Real Estate is part sales, part marketing, part entrepreneurship, part relationship building, and a large part customer service. To be successful, you must have the tenacity and be willing to do ALL of these, ESPECIALLY the customer service part. Time management is also a huge factor here. Those who waste their time and don’t plan their days don’t reach success as quickly as those who make the effort to plan their days in advance.
Avoid failure: Find out what successful real estate agents are doing on a daily basis. What do their routines and schedules look like? How are they managing their time? Are they making calls or networking? Learning and emulating some of the habits of top real estate agents can go a long way. It’s no guarantee that what one agent is doing to build their business is going to work for you, but the work ethic of top agents is often very similar.
They Start a Real Estate Career for the Wrong Reasons
Selling real estate is not for everyone, period. Another reason why most real estate agents fail is because they get involved in real estate for the wrong reasons.
One of the most common reasons why people attempt to sell real estate is because they think all real estate agents make tons of money. This is a huge misconception and is actually the furthest from the truth; as the average real estate agent only makes around $50,000 per year. It takes serious hustle to become a top producing agent. The money will only come if you put forth, the time, the effort and the hard work.
Another very common reason people obtain their real estate license is because they love “looking at houses” or obsess over shows on HGTV. TV show editors make this business look easy. Do you really think an entire real estate transaction can be completed in 60 minutes? Being a successful real estate agent is so much more than being a professional door opener. Listings usually don’t just land on your lap. You cannot be afraid of hard work, meeting new people, and working outside of your comfort zone.
Avoid Failure: Make sure you evaluate the real reasons why you want to sell real estate BEFORE you take the leap into this career, otherwise, you may become one of the statistics. Do you have a true desire to work hard, build relationships and help people with one of the biggest purchases of their lives? If so, then yes, real estate could be a great career for you. If the answer is no, you may want to reconsider this career path.
They Don’t Save Enough Money to Live While Starting Their Career
Successful real estate agents know they must spend money to build their business and make money, and they understand how important it is. Whether it’s investing in promoting themselves or using fancy marketing strategies to sell homes, it costs money.
Many real estate agents fail because they don’t realize that it costs money to run their business and when they realize it does, they don’t have enough money to live on. Not having money to make car payments, student loan payments, buy groceries, or to buy other necessities is another reason why real estate agents fail.
Avoid Failure: Before starting a career in real estate, it’s extremely important you have enough money saved so that you can pay your bills and have money for necessities for a few months. This is not a “steady paycheck” job. You only get paid when you close a deal. You may have three closings one month and only one the next. You need to know how to budget and how to stick with the budget, so you don’t have to get a side hustle or quit.
They Don’t Set Goals or Have a Business Plan
Goal setting and creating actionable business plans are a critical part of any successful business. Most real estate agents fail because they don’t understand how to properly do this. It’s hard to work toward something when you haven’t identified what it is you are working toward! Unless a real estate agent sets clear, achievable goals, it’s easy to get sidetracked on the road to success.
Successful real estate agents are constantly setting and reviewing goals and action plans. It’s not as simple as setting yearly goals and waiting to revisit them at the end of the year, it’s constantly being aware of your progress towards these set goals and action plans. Work with your broker or an experienced agent to set attainable goals when you’re first getting started.
Important goals for real estate agents to set include the number of transactions and number of sales per year, and gross or net income goals. Other goals and action plans, such as, how many daily/weekly prospecting calls will be made, how many by pop-bys, and how many networking events you will attend and are also critical.
Avoid Failure: “If you fail to plan, you plan to fail.” I believe Benjamin Franklin was quoted saying this. There is so much truth in that statement, especially when it comes to a career in real estate. Setting goals and action plans can make agents more accountable which, in many cases, will lead to bigger success!
They Lack Organizational Skills
As a real estate agent, you are an entrepreneur, a sole business owner. Your roles encompass business development, marketing, administrative assistance, and management. You are responsible for handling the entire sales or purchase transaction. Lack of organizational skills will send a real estate agent into a quick unplanned retirement.
Strong organizational skills are a necessity of being a successful real estate agent. Not only can you save a lot of time and effort by staying organized, but you also create a great impression on your clients. You exude confidence and inspire your clients and others in your network when they find you calm and organized all the time. If you are organized, follow up with leads, communicate well, and pay attention to the needs of your clients, you will close more deals. If you are not organized, forget to do an important step in a transaction or misplace paperwork, your career in real estate will be short-lived. There is little room for errors in real estate.
Avoid Failure: Invest in a CRM (customer relationship management platform) and use it. Utilize a calendar or planner (mobile or paper). Create checklists and processes for sales and purchase transactions and follow them. Set up action plans in your CRM that remind you to complete tasks for each client. Use reminders on your phone and always keep open lines of communication with your clients. Once you become a top producing agent, you can hire an assistant to help keep you organized!
They are “Part-Time” Agents
Another common reason why real estate agents fail is because they’re attempting to sell real estate part-time. Before those of you who are part-time agents get upset with my thoughts on this, I do acknowledge that it is 100% possible to be a successful part-time agent and sometimes that may be your only starting option. However, the reality is that a large majority of part-time real estate agents don’t make it.
Why do many part-time real estate agents fail? Well for one, you miss out on A LOT of training. Most brokerage firms offer valuable training and classes during the weekday. If you are working a 9-5 job, the odds of you gaining the needed knowledge necessary for success is slim (again, I know it is possible, but it is tough). Many buyers and sellers will avoid hiring a part-time agent simply because they’re not readily available like a full-time agent would be. Real estate agents need to be flexible enough to put in the hours all days of the week including nights and weekends. If you are doing real estate as your side hustle, odds are, you are not as focused on the industry and are probably not as knowledgeable as someone who dedicates 65+ hours a week to real estate.
Avoid Failure: Realize being a successful real estate agent is a commitment to hard work and hustle. Trying to sell real estate part-time is NOT easy. Spend the time to grow a “nest egg” before you start this career so you can work real estate FULL TIME from the start. Go all-in immediately to build a business that soars. Commit yourself full-time to training, mentoring and learning the business. Get out there and network, call everyone you know. Most part-time agents that fail will tell you it is because they didn’t realize the commitment. They could never give 100% to this career while working another job, so they end up quitting real estate.
These are just a few of the reasons new agents fail. Now that you are aware of these reasons, you also know how to avoid these pitfalls and how to not become a statistic. This career takes hard work and hustle. Remember your WHY, keep your goals posted where you can see them DAILY and go forth and conquer!