Beat the Odds: Why 87% of Agents Fail and How You Can SucceedMar 16, 2023
When I was just starting out as a real estate agent, I remember hearing a statistic that shocked me and still shocks most people today. I learned that 87% of new real estate agents fail within their first five years in the industry! That's a huge number! Courageously (or foolishly)I didn't let that stop me, and neither should you. In this post, I'll review some of the reasons why so many agents fail and the solutions to help you avoid becoming a part of that statistic. So, buckle up, and let's go!
Reason 1: Unrealistic Expectations
One of the biggest reasons new agents fail is that they expect to make lots of money right away. But real estate is not a get-rich-quick adventure. It takes time, hard work, and patience to build a successful business. For many agents, it could take up to 6 months to get your first paycheck. Don’t let that stop you from hopping into real estate, but it’s important to understand the runway you’ll need to survive until the money flows.
Solution 1: Set Realistic Goals
To avoid falling into the trap of unrealistic expectations, set achievable goals for yourself. Break down your goals into smaller, manageable steps, and celebrate your accomplishments along the way. For instance, don’t measure success by the dollars that come in the first few months. Instead, measure success by quality conversations, showings, and other action items that will help you build your career regardless of the initial income. Having realistic goals will help you stay encouraged and increase the likelihood of your success as an agent.
Reason 2: Lack of Training and Support
Some new agents dive into the real estate world without the proper knowledge and skills. This can make navigating the industry really challenging!
Solution 2: Find a Good Coach or Mentor
One of the best ways to learn the ropes of the real estate world is to find an experienced coach who can guide you through the ups and downs. A good coach can teach you valuable skills, help you avoid common mistakes, and be there to cheer you on when the going gets tough. So, don't be afraid to ask for help and find a mentor who can show you the way. Depending on your network, it’s possible to find a mentor who will help you for free. However - studies show that free services don’t lead to the best engagement or result. If you’re being coached for free, make sure your coach is truly engaged. And if the free coaching from your brokerage isn’t working out, don’t be afraid to pay for a more intentional experience. You’ll probably even find that your effort level increases when you have financial skin in the game.
Reason 3: Not Enough Money Saved
Starting a new career in real estate can be expensive. There are fees for licensing, marketing, and office supplies, not to mention the time it takes to start making a consistent income.
Solution 3: Build a Financial Safety Net
To avoid struggling financially in the beginning, make sure you have some money saved up before you start your real estate adventure. This safety net will help you cover your expenses and give you the peace of mind to focus on building your business. I typically recommend 3-6 months of living expenses in the bank depending on how deep your sphere is.
Reason 4: Poor Time Management
In the real estate world, there are so many tasks to juggle, like meeting with clients, showing properties, and handling paperwork. Some new agents struggle to manage their time effectively, which can lead to failure. For brand-new agents, schedules are often empty. Before you get clients, you’ll have to keep yourself busy with tasks that actually lead to new clients. Unfortunately, some agents don’t know what tasks they should even be doing. This causes hours of wasted time and effort on things that won’t lead to revenue and an increase in discouragement and stress.
Solution 4: Create a Schedule and Stick to Consistent Business Building Tasks
One way to avoid getting overwhelmed by your new life as an agent is to create a schedule and stick to it. Plan your days, weeks, and months in advance, and make sure you save time for critical tasks that will grow your sphere, lead to good conversations with prospects, and ultimately get you to the closing table and payday.
Reason 5: Trouble Building a Client Base
In the real estate business, your clients are your lifeline. Without clients, you won't have anyone to help buy or sell houses, and you won't make any money. Some new agents struggle to find clients and build a strong network.
Solution 5: Pretend Your New Full-Time Job is to Build Relationships
Building a solid client base takes time, effort, and persistence. Don't be afraid to spend more time engaging with friends and following up with acquaintances you don’t talk to very much. Don’t make real estate the main topic of discussion, but make sure people know you can help them buy or sell. The more proactive you are, the more likely you are to find clients and succeed in your new career.
Reason 6: Fear of Failure
The fear of failure can hold you back from taking risks and trying new things, which is essential for success in real estate. Fear of failure and imposter syndrome causes agents to fail every day. Remember, little “failures” are totally normal in life and in real estate. The only way you can find huge success in real estate is to learn from a mixture of failures and hard knocks! No agent finds success without a trail of lessons behind them. At the end of the day, if you’re persistent in finding solutions to the problems above, your chances of failure are greatly diminished.
In this article, we explored the shocking 87% failure rate for new real estate agents and dive into the reasons behind this phenomenon. The good news is, by understanding the challenges that contribute to failures, such as unrealistic expectations, lack of training, and poor time management, we can equip aspiring agents with actionable strategies to build a long and successful career.
If you’re interested in being a real estate agent or are currently struggling to gain traction in your real estate career, we have all kinds of resources available for you, like our assessment for new or struggling agents. The assessment will pinpoint the area of your business that needs the most work and give you a 3 step plan to improve.
Keep up the great work,
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