87% of Real Estate Agents Fail. Here’s Why.

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. But here are some highlights:

According to the National Association of Realtors (NAR) failure is defined as as those who get a real estate license and then leave the industry within the first five years. According to them, 75% of real estate agents fail within the first year, and 87% fail within five years.

Some common mistakes that agents make include, inadequate prospecting, not marketing properties in ways that lead to fast sales, and not following up with clients. But let’s dive deeper into this.

Is Real Estate Hard?

Being a real estate agent can be hard, but really it depends on your view of  what’s difficult. While the physical demands aren’t too much and can be rewarding, the real challenge is staying disciplined in your work ethic, and adapting to new trends. Many new agents find this hard. According to the NAR, as of July 2023, more than 60,000 real estate agents quit in the first half of the year. Why? They could have been trying something new or are worried about where real estate is headed. The future of real estate agents may be a balance between technology and human expertise. Agents who can adapt to this new landscape are likely to thrive in the years to come.

Some trends in the real estate industry include:

Why Do Real Estate Agents Fail?

If you’re considering a career in real estate, consider if you’re ready for its rewarding but challenging nature. We’ll talk about the common challenges agents face and why some leave the industry. After gaining these valuable insights and understanding potential pitfalls, you can adjust your approach your real estate business plan to avoid similar setbacks and achieve success in real estate.

Here are some of the top reasons why real estate agents fail:

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 full-time real estate earning GCI.

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 marketing 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.