11 Reasons Real Estate Agents Fail and How to Find Success

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 those statistics.

Why Be a Realtor?

Being a real estate agent has some great advantages and the largest downside to this career path is the difficulty to become an above-average agent. Here are some of the benefits:

  • You don’t need a college degree
  • You can make your own schedule and work on your own time
  • You control your income by the amount of time and effort you invest
  • You’ll be able to build strong relationships with people

However, there are also disadvantages of choosing a career in real estate, including:

  • Steep learning curve
  • Abundance of competition
  • Plenty of room for error
  • Income fluctuations

Mistakes to Avoid

These are the eleven most common mistakes to avoid when becoming a realtor.

(Others want to become a realtor after watching Extreme Makeover: Home Edition TV Show)
Ctto: tvguide.com

Getting Involved for the Wrong Reasons

The real estate agent business is not for everyone. Many agents fail because they jumped into the career for the wrong reasons. Some get involved in real estate because they imagine that all agents make loads of cash. This is a myth since the average agent doesn’t make more than $45,000 per year.

Others decide to become real estate agents because they love watching shows such as Extreme Makeover Home Edition or Love It or List It. They don’t take the time to find out what being a real estate agent actually involves. If you get into real estate for the wrong reasons, your chances of failure are very high.

Pro Tip: Before you follow this career path, do some research and then ask yourself, “Why do I want to become a real estate agent?” Think long and hard about your answer.

Not Working Hard Enough

Being a real estate agent is more of a lifestyle choice than just a job. If you’re building a real estate career you have to be fully committed to its success. The primary reason for this is that it takes a considerable amount of time working at it before you start making consistent sales. You have to build your technical knowledge of the industry itself, develop your sales skills, create a network from scratch, and learn how to deal with a lot of rejection.

Even though the profession permits flexible hours, the working hours are long. Also, one may have to work many nights, weekends, and holidays, as these are usually the days that clients are available. For those starting, there is no substitute for hard work. Building a clientele list is an arduous affair that requires time, patience, being available 24/7, replying promptly to client calls, and persistence. For those who enter the real estate profession thinking they are going to make a living working regular office hours, this is a recipe for failure.

Pro Tip: Find out what successful real estate agents are doing on a daily basis. If possible, spend some time with a top real estate agent to discover what they do day to day.

Trying to Be a Part-Time Agent

One of the biggest mistakes you can make is starting a real estate career as a part time job.

Real estate is an ongoing job and demands a significant amount of time. Like any profession, success pays off for individuals who invest their time. One needs to be available all the time for customers in order to sell a home. It matters how frequently you answer customer queries as well as how much time you devote to attend the open houses and to market yourself and your properties.

Before those of you who are part-time agents get upset with me 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.

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, then odds are you aren’t as focused on the industry and are probably not as knowledgeable as someone who dedicates 65+ hours a week to real estate.

Pro Tip: 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.

No Goals

Another key reason why real estate agents fail in real estate is the lack of structured goals. One should constantly be analyzing their progress and setting new goals, both quarterly and yearly. Goal setting offers a road map for future success and helps prepare for any future problems.

Pro Tip: A few of the most important goals for real estate agents to set for themselves relate to their sales. Goals such as the number of transactions and number of sales are obviously important. Other goals and action plans, such as how many weekly prospecting calls will be made, are also critical. Bottom line, setting goals and action plans can make agents more accountable which, in many cases, will lead to better results.

No Idea How to Generate Leads

To become a successful real estate agent one should know how to generate leads. Many new agents assume that they will spontaneously get calls from people to sell their homes; this is a false notion. A real estate agent should be constantly thinking of ways to generate leads, otherwise he or she will have no homes for sale.

Pro Tip: “Marketing” is simply the strategy you use to find new leads and clients and build a reputation as an agent people want to work with. There are many unique real estate marketing ideas you can use to connect with potential clients online or offline such as marketplace advertising, direct mail, pay-per-click leads, social media, websites, and referrals. A comprehensive marketing plan will include many, if not all, of these ideas.

Lack of Client Management & Organization

As soon as you become a real estate agent, you need to have a solid system to organize your contacts and track your communication with each lead. Some of your most valuable leads will be friends, family members, or acquaintances who are already in your sphere of influence. In addition, leads can come from various sources, like websites, referrals, events, or social media, so they can easily fall through the cracks if you don’t intentionally create a plan to track each of them.

In fact, the real estate standard to convert leads most effectively is five minutes or less. Plus, persistent follow-ups are a must. With these high expectations, it’s easy to see how many real estate agents fail without a system.

Pro Tip: Even though this is one of the main reasons why real estate agents fail, there is an easy solution. Many client relationship management (CRM) systems are designed to solve this problem, so find a tool that fits your needs and your budget. CRMs can do anything from lead tracking to lead qualification, email integration and automation to reporting, and much more.

Lack of Training & Mentorship

When starting a new career in any industry, getting the right training is key to success. In real estate, agents in every state are required to take pre-licensing classes to become a real estate agent. However, this education generally doesn’t include business-building tips, in-field training, or support, which are some of the biggest components of the real estate failure rate.

As you begin your real estate career, remember that the required coursework is designed to teach you real estate concepts, not to help you build a successful career. If you’re determined to establish a sustainable, profitable, and enjoyable real estate career, it is necessary to find the right training, mentorship, and support to help you work through the inevitable challenges.

Pro Tip: One of the best ways to incorporate training and mentorship into your real estate career is by finding a real estate brokerage or team built to help new agents grow. All brokerages will claim they have a training program, but their training may not match your learning style or your needs. Make sure that you research their specific training programs to ensure that you choose a brokerage that will set you up for success.

Source: kortivity.com

Being Difficult to Work With

When you’re working in a profession that deals with other people, it’s extremely important that working with you is enjoyable. Another common reason why real estate agents fail to make it very long in the business is because they are difficult to work with.

Whether it’s because buyers and sellers don’t enjoy working with an agent, or because other local agents don’t enjoy working with an agent, being difficult to work with is a surefire way to fail as a real estate agent.

Pro Tip: When working with buyers and sellers, always keep in mind there are hundreds, even thousands, of other agents in any given market they could choose to work with. If working with an agent is difficult, it’s easy enough for a buyer or seller to find a new agent that’s easier to work with.

An agent who has a good reputation with other agents also has a greater probability of making it in the business. Many real estate agents fail because they’re difficult to work with and other agents will do everything they can to avoid working with them.

They Don’t Save Enough Money to Live On

Successful real estate agents spend money to build their business because they know how important it is. Whether it’s investing in promoting themselves to their sphere of influence or using top real estate marketing strategies to sell homes, it all takes money.

Many real estate agents fail because they don’t realize 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 usually means that the real estate agent will be looking for another career.

Pro Tip:  Before selling real estate it’s extremely important that you have enough money to live on. It’s highly recommended that before you attempt to sell real estate full time, with no other means of incoming capital, that you have at least six months of money saved to pay all your bills.

Don’t Know How to Overcome Tough Times

When a real estate market is strong, it’s common to see the majority of agents doing well and thriving in business. But since real estate is cyclical, it’s inevitable that a tough market is in the future, which is when you get to see if a real estate agent is going to fail or not. Many real estate agents fail because they cannot power through a poor real estate market.

Pro Tip: Always plan for tough times ahead. It is very important to continually grow your pipeline, number of contacts, and your overall business even during a strong market. Successful agents are always learning and evolving how they can market themselves to strengthen their business. Bottom line, don’t get complacent during a strong real estate market. And always be sure to have a good amount of savings for the lean times.

Thinking Success in Real Estate Comes Easy

No successful real estate agent had an easy ride to the top. It probably took years to learn and perfect their skills.

Pro Tip: You need to realize that success in real estate will not happen overnight. So roll up your sleeves and get ready to work for your success as a real estate agent. Slow and steady is the way to win this race.

These are just a few of the reasons that real estate agents fail. Now that you are aware of these reasons, you also know how to avoid these pitfalls and not be a statistic!

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