Why 87% of Real Estate Agents Fail
A few weeks back, I was flying back home and had 75 minutes to spare, so I did a Facebook Q&A. Maybe a hundred people or so jumped on and started to ask me questions. About a third of them surprisingly were brand new agents, so I thought I’d do a video just for you brand new agents, veterans who may be starting over, and anyone in a slump. I’m going to give you a little more extreme of an answer with the intention that I get you very quickly out of the slump and into success.
Something to note: in 2014, NAR reported 87% of all new agents fail after five years in the industry, with only 13% making it. Agents don’t leave the industry because they made too much money. Rather, they leave the industry because they didn’t make any.
While the real estate agent failure rate may seem shocking to some, it’s the stark reality of the industry. However, this doesn’t mean you should give up before you get started. Below, we’ll dive into five reasons why 87% of real estate agents fail and provide some useful tips on how to succeed as a real estate agent. Let’s get started.
Is Real Estate Hard?
So, is real estate hard? Answering this question depends on your definition of “hard.” The actual work in real estate is not overly strenuous and can actually be fun and extremely enjoyable – talking to clients, helping them with one of life’s largest investments, being there for them during an important transition. The “hard” part of real estate is the work ethic and discipline required to do all of your necessary tasks day in and day out. And that’s where many aspiring agents fall short.
Why Do Real Estate Agents Fail?
One of the most important questions to ask yourself as a new real estate agent or a veteran is, “Why do realtors fail?” Understanding the challenges realtors face and why they hang up the towel and close their doors for business can help you identify practices you may be doing that are wrong to prevent yourself from landing in the same place. Explore some of the top reasons why real estate agents fail below:
1. Inadequate Funds
In order to start any business, you’re going to need capital. However, many realtors start their real estate journey with very little saved up. Without enough money saved, you can find yourself gasping for air under a pile of expenses. Then, before you know it, you’re forced to close your business without seeing any signs of success.
To prevent this from happening, it’s recommended to have at least six months of expenses saved up. This way, you can continue to pay for necessary expenses like food and housing before your first commission paycheck comes in. Once you begin to make enough money to cover your expenses, you’ll be able to transition to a full-time real estate agent.
2. Limited Knowledge of Lead Generation
Finding leads is crucial to running a successful real estate business. Buying a new home is a major life event and purchase, which means it can take a while for a client to sign the deed. However, with a strong list of leads, you’ll have more contacts to reach out to and offer your realtor services. If you want to close deals, you need to know the different ways you can generate leads, such as using online lead generation tools, hosting physical or virtual open houses.
3. Failing to Follow Up With Clients
Once you close a deal with a client, the work doesn’t stop there. One of the reasons why real estate agents fail is that they don’t take the time to follow up with clients once a transaction is complete. To become a successful realtor, it’s crucial to stay in contact with your clients. Doing so will build a sense of trust in your relationship, which will encourage them to refer friends, family, and coworkers to you or use you again for your services should they look to move or buy a home in the future.
4. Poor Marketing
Marketing is the crux of any successful business, especially real estate. Through marketing, you’re able to spread your brand name, target your desired audience, and grow your business. However, a reason why real estate agents fail is that they have poor marketing efforts. Whether they’re not using social media to its full potential, are producing inadequate marketing campaigns, or have an outdated website, there are many marketing efforts that can go awry.
As a realtor, take the time to market your business correctly. This means using marketing tools like CRM software for lead generation, social media management tools for growing your brand name, and email marketing campaigns for keeping your clients and leads informed.