Like many sales-based professions, the real estate industry is responsible for making some people fabulously wealthy. Rags-to-riches stories abound in the business, featured in magazines and online, where successful realtors share the tips that rocketed them to the top. Every area in the U.S. has its big fish—name brand power sellers who inspire up-and-coming agents.
Unfortunately, the failures dwarf the successes. Within five years of starting their career, 85-90% of agents will leave the industry. These people are not leaving because they made so much money that they can retire early. They are leaving because they could not sell enough properties.
Below are some of the main barriers to success that new realtors face. If you’re a struggling realtor, remember that most of these problems have solutions that you can start implementing immediately.
Most agents choose the real estate industry as their second or even third career. These agents often look at selling homes as something that requires less time and effort and provides more freedom than a salaried position.
The reality is that the real estate market is competitive, and becoming a realtor is more like starting your own business than starting a new job. While agents have control of when and how they work, they are also in charge of generating the business that pays them.
Agents who expect easy money and plenty of free time will be unprepared for the knowledge and time demands that success requires, and will have trouble generating leads and closing sales. On the other hand, agents will thrive when they manage their time, expand their availability beyond the typical 9-to-5 hours, and commit to making a strategic effort.
Everyone makes mistakes, especially people who are entering a new industry. New agents, especially those without prior sales experience, are often so afraid of doing something wrong or looking amateur that they avoid many of the activities and situations that will help them build valuable skills.
Know that not every lead will want to work with you. Some will probably hang up on you immediately when you first contact them. It happens to every agent, even the top performers.
Clients will ask questions you can’t easily answer or have objections that you haven’t encountered before. This is normal. Learn from these situations and try not to make the same mistake twice.
In order to close sales, agents need to have clients. New agents typically do not understand the importance of constantly contacting and nurturing leads. Leads are especially important for new agents, who not only need the experience of working with a diverse array of clients, but who also lack a referral base.
The solution is to simply spend more time (and money) on marketing and to follow-up regularly with leads. In a 2018 article for Inman.com, realtor Tom Ferry points out four major sources of new leads:
Online marketing and purchasing leads – While online lead generation costs money, the results can be surprising when done correctly.
The real estate industry is full of experienced, knowledgeable agents who have worked hard and forged a successful career. These people are often extremely helpful and willing to work alongside newcomers, especially at good brokerages that take their support role seriously.
New agents who do not learn from the success around them have a harder time developing good business practices. These agents waste time worrying about unimportant aspects of the job because they don’t listen to someone who can help them prioritize their time, and their path to success is not as clear or as sure as it could be.
By finding someone successful to guide you, you can build strategies that work and focus on what matters.
The first year in the real estate industry is a period of financial uncertainty—it can take months to make the first sale, and months after that to make the next one. In addition to the unreliable income, realtors face expenses for marketing and resources like MLS. During this time, realtors may spend more than they make.
New agents who do not budget for the lean times might get discouraged when their income drops during the transition to real estate. Others may simply need more money coming in, forcing them to take work elsewhere. Even a part-time job can significantly hinder a new agent’s productivity and growth potential.