Let’s talk about the real reason real estate agents fail in this business.
A lot of you have probably heard so many different stats, and I’ve heard so many different reasons. It's traditional modeling, so it's easy to get a real estate license. You have to understand the market, all these different things.
What really prompted this for me was an article from Inman.
I want to dive into the real reasons why real estate agents fail out of this business, and what to do about it. Because I keep on hearing, “Hey, most agents fail out of this business,” and “We need to raise the bar,” but nobody is giving us examples of how to do that, and nobody is doing anything about it. (I am generalizing. There are some people who are doing things about it. Like LabCoat Agents, we do it for free.)
Let’s take a look at what Inman says. (I don’t always read Inman because I feel like it is always click-baiting me.)
The whole article is here: The real reason so many new agents quit in 5 years
Inman cites an old stat (attributed to NAR’s 2014 Agent Report) that says 87% of agents fail (or quit) in their first three to five years.
I don’t know if that is true, but I feel like it is a little too high, and a lot of the agents I talked to are still in the business. (But it could be just LabCoat Agents.)
The article gives three reasons.
According to Inman, “The goal is to ensure that any new agent—or frankly, any experienced agent—becomes an expert. The mentorship model right now allows an agent of over two years to ‘coach.’ Limit coaching and mentoring to those who are true experts in the field.”
This part, I agree with just a little bit.
“Making sure that we are experts allows agents to give the full service that any client deserves. Set up a full training schedule peppered with numerous topics, including the following:
“Whether you are discussing how your business looks today, what issues you and your clients are going through, a true business plan, negotiations, or what have you, the agent needs to be there. The agent also needs to fully understand the tools that are available to them,” Inman says.
While I agree with some of the points they raised, I don’t agree with the reasons they are giving out. So, I made a list of what I think (and have observed) are the reasons agents fail out of this business.
When I was in law school, talking to other attorneys, you know what they said? They said, “You know what the hardest thing is? To get business.”
It is the hardest thing for any sales vertical to get business.
That is the number one problem. A lot of agents don’t know where to start. They don’t know what it looks like to go out and get business. Because we have been studying to get and pass the real estate licensing process.
They don’t understand what marketing looks like.
I think we should be teaching new agents how to market, how to prospect, and how to find and play to their strengths. Most agents think they can only succeed one way, the traditional way. But every individual has different strengths. Find that and focus on your strengths.
And if you are in charge of new agents in the industry, it is your responsibility to outline their possibilities for them while they are starting out.
It is not always just cold-calling, building a database, door knocking and open houses. Although those methods work, agents need to find their niche and build out from there. We can get more creative in how we market and prospect.
If you are a new agent and you don’t come from a business background, it is hard to figure out where to start. Yes, you learn things during our training, but what does it look like to treat real estate, and what you are doing, whether you are part of a brokerage, a team, or an individual agent, as an actual business? It took me five years of failing to figure this out.
Track your expenses. We need to use companies like Sisu to help us track. Hire a bookkeeper and a CPA to help you with your finances and taxes. One of the reasons agents fail in this industry is because they fail to take care of their taxes, and now they don’t know where to find the money to pay the fines or people to hire.
If you want to grow and scale, you need to be comfortable hiring people, whether a virtual agent, an executive assistant, a transaction coordinator, a showing agent, marketing, etc. The list goes on. You need people to help you in order to grow your business, so you can focus on the things that you are absolutely amazing at—“higher leverage” functions as the head of your business.
Since we are talking about leverage, you also need tech. You need software and all those things that make our lives easier. REDX is so easy to use for me because I call Expired and FSBOs. CRMs like Follow Up Boss help you save time in tracking and keeping in touch with your database—I don’t want to use Excel to keep track of all my past clients and spheres. I use Ylopo for retargeting, to send them property alerts.
Lastly, you need a brand. You are your brand.
This is what it means to treat your business like a business.
I knew that at the beginning, a little bit. But it wasn’t really explained to me until I started growing the business. I realized I didn’t want to spend forever chasing new leads because I absolutely loved the past clients I had and I wanted more like them.
It took me a while to get into that groove of building out a strong database based on relationships with past clients and spheres. What was I doing for them? How am I showing up for them and giving them value?
Everyone’s got a database—your phone. It is time to export them from there and put them in your CRM (like Follow Up Boss) and categorize them.
Who would refer business to you? Whom should you take out for coffee or have lunch with?
We all need to connect deeper with our sphere, or past clients. Even when we are door-knocking or posting on social media—we can connect a little deeper. We are building relationships—that is the core of real estate.
And it's all about trust. We need to be consistent with what we are putting out there and what we are doing in person. That is what builds that bridge of trust, and people want to work with trustworthy people.
This is how you build a career out of this job. Don’t chase leads all your lives. Attract.
This one I learned much later. A lot of agents burn out so fast. This is why most of them fail out in the first five years; they burn out. They don’t have “balance” (I call it harmony).
My main focus is on three things: I need to take care of myself (my mind, body, spirit, and emotions). They never told us that. We hear so much about balance, but they don’t say, “Take care of yourself.”
It is the most important piece of this. Because that is how you show up for the people that you love, your clients and everyone else.
Second in my priorities is family. It is part of that harmony. Where does the family fit into this? Have you seen the divorce rate in real estate? It’s pretty high up there. It is a stressful job.
If I can prioritize myself so I can show up better for my family, guess what happens? I can focus better on my business. Then I can focus on everything else because I have enough energy and everything is a lot clearer. Because I feel great.
Let’s all help each other succeed in this industry. Have a great day!