Being a real estate agent is one of the most fulfilling professions in the real estate business. Besides having unlimited income potential, a real estate agent career means flexible schedules and the opportunity to network with many people. However, this does not mean that every real estate agent ends up being successful. How many real estate agents fail? Research has shown that as many as 80% of new real estate agents fail or quit within their first year in real estate. Such a high real estate agent failure rate should be a cause of concern for any aspiring agent.
Why Real Estate Agents Fail: 10 Reasons
Here are some of the reasons real estate agents fail and how you can avoid them:
1. 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 $40,000 per year. Others decide to become real estate agents because they love watching shows such as ‘Extreme Makeover Home Edition’. 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. So 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.
2. Not working hard enough
Being a successful real estate professional takes a lot of hard work. It means long days and nights, accompanied by blood, sweat, and tears. A major reason why real estate agents fail is because they are not willing to put in the work. If you want to be successful, be prepared to work long and odd hours. Real estate is not your typical 9-5 job. You will have to work many weekends and nights and be accessible via email and phone almost 24 hours a day. To get an idea of what is involved in this career, start by reading this: What Does a Real Estate Agent Do Exactly? Also, if possible, spend some time with a top real estate agent to discover what they do on a daily basis.
3. Not having enough savings
For many real estate agents, it takes months or even years before successfully closing a deal. Since their earnings are based on commissions, this could mean not having an income for some time. Therefore, before becoming a real estate agent, make sure you have enough cash saved to make student loan payments, car loan payments, pay bills, buy groceries, etc. Your savings should also be enough to run your real estate business. As a general rule of thumb, be sure to have enough saved to sustain you for at least 6 months. You will be able to work more effectively knowing that your bills are taken care of.
4. Working part time
Another common reason why real estate agents fail is because they try to work in real estate part time. While it is possible to succeed as a part time agent, chances of failure are much higher compared to full time agents. When buyers and sellers are looking for an agent, they will want someone that is readily available. As a result, they are more likely to hire a full time agent than a part time agent. In addition, being a part time real estate agent will mean missing many lead generation opportunities such as trade shows, conferences, and open houses.
5. Not having clear action plans or goals
Goal setting is a crucial element for any successful business. If you don’t set proper goals or create action plans, you are very likely to fail. Top real estate agents are always setting and evaluating goals and action plans. You need to have goals such as the number of prospecting calls to be made, the number of transactions to complete, and the number of sales to make. Having clear goals and action plans will keep you accountable and boost your profitability.
6. Not knowing how to generate real estate leads (or qualify them)
Generating leads is one of the most important skills of a good real estate agent. Not having leads means not being able to close deals. The first thing you need to do as a new agent is to decide how you will generate leads. Will you hold open houses every week? Will you go around the neighborhood knocking on doors? Will you create paid Facebook ads? Will you use online lead generation tools or even pay for qualified leads? Find a strategy that works for you and get aggressive about real estate lead generation.
Another reason real estate agents fail: they spend too much time on unqualified leads. While you should never throw away leads, you should be giving each lead the time he/she deserves (or doesn’t deserve). The only way to avoid this mistake is to ensure you qualify your real estate leads. Try using Mashboard for real estate lead qualification. This tool uses predictive analytics to instantly qualify leads for you. Book a demo to learn more.
This demo could save you from failure.
7. Not knowing how to market their business
Many real estate agents fail because they don’t know where or how to market themselves. Many think marketing is about bombarding their real estate prospects with sales messages. However, this strategy will only get you unfriended or unfollowed on social media. One of the best ways of marketing yourself is by sharing helpful information with your audience. Such information can be shared through blog posts or social media updates. Since such content is helpful and non-promotional, people are likely to share it with others in their networks. With time, people will start seeing you as an authoritative figure in the real estate industry.
8. Being difficult to work with
Since real estate involves working with other people, interpersonal skills are a must for real estate agents. If sellers and buyers don’t enjoy working with you, they will simply move on and look for another agent. Besides getting along with buyers and sellers, agents should also learn how to relate to other agents. If you are difficult to work with, other agents will do their best to avoid you. This will mean losing future referrals and collaboration opportunities.
9. Inability to handle tough times
The housing market experiences a lot of fluctuation. When the market is bullish, many agents find themselves prospering. However, many agents fail because they cannot handle tough seasons in the business. This is why it is very important to plan ahead for rough times. Be sure to grow your contacts, pipeline, and overall business during good times.
10. Thinking success in real estate comes easy
No successful real estate agents had an easy ride to the top. It probably took years to learn and perfect their skills. Therefore, you need to realize that success in a real estate career will not happen overnight. Roll up your sleeves and get ready to work for your success as a real estate agent!