What percentage of real estate agents fail and why?
Corben Grant
REP
The number of real estate agents is growing all the time as new agents begin in the field drawn by the promise of being their own boss, making their own schedule, and earning a high income. However, the reality in the current market is that there are simply not enough homes for agents to sell, meaning there is a lot of competition among agents. With all the new agents joining the field, some of them are bound to become the top performers while many others may not.
But, what exactly divides the agents who succeed from those who fail? There aren’t any number of reasons why someone may fail in their new career – many of these will be external factors beyond their control. There are some things a realtor can do, or fail to do, that worsens their chances of success.
In this article, we will look at why agents tend to fail and what you can do to avoid these common pitfalls to be successful in your real estate career.
How many fail?
It’s hard to determine exactly how many new real estate agents fail as this figure is not commonly reported. If you look online, you may see the pervasive claim that “87% of real estate agents fail in the first five years”. This statistic is purported to originate from the National Association of Realtors (NAR) from around 2014, though a primary source for this statistic proved difficult to find.
If correct, this is truly a shocking figure, indicating that almost nine in 10 agents will fail to succeed in the real estate industry.
There is some data to back up this possibility as NAR does release data on realtor earnings. In their most recent report, they indicated that for the average real estate agent with two years of experience or less in real estate, the median income was just $8,500, far below what would be enough to support oneself. On the other hand, they also offer the statistic that 79% of realtors were certain they would remain active for the next two years, somewhat contradicting the high failure rate narrative.
Common reasons real estate agents may not succeed
Getting into real estate for the wrong reasons
One of the most common reasons that a new agent may not succeed in the real estate business is that they should not have gotten into real estate in the first place. For example, some new agents believe that the near limitless potential for earning as a real estate agent means that they themselves will be the highest earner around. Even worse – some take this to mean that it will be guaranteed. Any successful real estate agent will tell you this is absolutely not the case and anyone who gets into the field expecting easy money without hard work will be sorely mistaken.
Trouble following a routine and staying consistent
Another problem for new real estate agents is being able to manage themselves and hold themselves accountable for putting in the work. Some think that making your own schedule means you can schedule yourself for as many off days as you want. This is absolutely not true. In fact, the ability to make your own schedule is one of the hardest parts because no one is going to force you to show up. The drive to keep going and put in the work every day must come from within in order to succeed. For many successful agents, the idea of “making your own schedule” actually means working longer days, skipping weekends, and being constantly on call to best serve your clients.
Another thing that you need to hold yourself to is consistency. This can play a huge role when it comes to communicating with clients, marketing yourself, making appointments, and more. It’s not enough to market yourself once or provide good service when you feel like it. Successful real estate agents must consistently be able to perform at their best and hold themselves to high standards of consistency.
Poor people skills
Most people think that real estate agents just work with homes, but it’s even more than that – real estate agents work with people. Clients are putting a lot of trust in agents to help handle one of the biggest transactions of their lives and they aren’t going to want to work with a real estate professional who they simply do not get along with. As an agent, your people skills are crucial to your success. This includes being an agreeable and friendly person as well as coming off as honest and trustworthy. Another aspect is communication. Your clients need an agent who can communicate effectively and on time so they can get the information they need when they need it.
Not setting or following goals
One of the secrets of successful people is that they know exactly what they want and how they will get there. One of the quickest ways to lose your momentum in a new career is to lose sight of why you began and what you want to get from your work. In order to be successful, you need to set realistic goals, both long term and short term, and create actionable plans that you can follow to see your goals become a reality. This can help focus your efforts and provide a much-needed drive to keep at it when times get tough.
Can’t generate leads
It’s hard to succeed if you can’t make transactions and you can’t make transactions if you can’t reach clients. Developing a successful lead generation strategy early will take you far in real estate. You need to be diligent in your pursuit of new leads, always looking for new strategies and abandoning old techniques that don’t work. Failing to do so will make it hard for a new agent to find work, leading to failure.
Not marketing yourself
Another aspect of finding new business is how you market yourself to potential clients. In the world of online marketing, clients will make first impressions based on what they see before they even speak with you. If you fail to market yourself or fail to market yourself effectively, clients will move on before you even have a chance to reach them, causing you to lose business. Marketing is one of the biggest keys to success for a real estate agent and it’s something you should take seriously.
Poor money management skills
Working as an agent can be a rollercoaster with business coming and going at odd times. When business is good you can make good money, but you shouldn’t take this for granted. One of the biggest reasons most real estate agents quit is the need to go elsewhere for more consistent income. Having a sizable savings fund and managing your money properly when it’s coming in will help you through the slow times and allow you to keep working as an agent.
Lack of commitment to the job
Finally, too many agents get into real estate with the intent to really get serious once things start to work out. The hard truth is that you won’t get everything you can out of real estate without giving it your all. Some agents start out part-time until they have enough experience to tackle the job full time. This can be a good way to get started, but you can’t ever make it your full-time job without taking the jump. You give yourself the best chances of success when you are fully committed to becoming a successful real estate agent.
Conclusion
Anyone who gets started in a new role does so with the intent to succeed, however, sometimes despite your best efforts, things just don’t work out. The good news is if you are reading this now, you probably already have the mindset it takes to make yourself successful. Keep these tips in mind and learn from other successful agents in your network and you will go far.
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