It’s always thrilling to start a career in real estate. The field is promising and offers many opportunities for growth and income. However, the success figures are sobering: 80% of new agents fail within the first year of their practice.
This begs the question: Why is the failure rate so high? What can you do to be among the 20% who succeed? After years of coaching new entrants into successful industry professionals, here are our insights on how to become a successful real estate agent.
Why So Many Real Estate Agents Fail in Their First Year
What are the contributing factors to the high failure rates for new real estate agents?
1. Weak or No Business Model
Most people begin a real estate business without a clear business model or plan. A business plan is your compass and helps you map out the short-term and long-term objectives of the company.
Without this plan, you’re flying blind, making wrong turns along the way, and ultimately failing.
2. Running Out of Financial Resources
A real estate business can take years to stabilise, where you can plan out your expected average commissions. This means it may take several months before you clinch your first deal, let alone planning for your expected income. Additionally, there may be zero earnings in between commissions.
Agents who don’t plan for the no-income periods suffer financially and may be forced to leave the industry and earn their livelihoods elsewhere. To make it to the first year, you must have at least six months of living expenses saved up.
3. Impractical Expectations
New agents often have unrealistic expectations and expect to earn six figures within the first year of working. However, gaining clients and establishing a reputation quickly is not easy. It is not a ‘get rich quick’ scheme, but success of that magnitude is possible. To get there, agents need a lot of time and continuous effort.
5. Part-Time Commitment
Some agents have the mentality of working part-time, initially aiming at upgrading to full-time status in the future; this could be disastrous. Real estate requires your undivided attention if the business has to be profitable on a full-time basis. Clients always demand your attention, and given that you have another job, you may not be fully available as expected.
6. Weak Marketing Tactics
Marketing is the oxygen of your real estate business. And without it, you will not get any leads; without leads, you cannot make any sales. Most agents do not market themselves properly, leading to their failure. You need a website and social profiles for the business and target leads on significant websites such as Trulia and Zillow.
7. Misfit with the Career
Not everyone is cut out for a career in this line of business. It involves a combination of risk-taking, interpersonal skills, and persistence.
A few agents are motivated by the benefits, such as flexible working hours, no commission ceiling, and autonomy; however, they fail to understand the effort involved in the job. Real estate might not be the best fit for those lacking drive, passion, and self-motivation.
You May Also Like: Personality Type for Real Estate Agents
8. Aversion to Risk-Taking
Mistakes are expected in any line of work, and real estate is no exception. However, many new agents are completely frozen by the fear of failure. This fear can hinder you from venturing or experimenting, which may be vital in any business. Successful agents accept failures as experiences and modify their strategies to suit their immediate needs.
How to Become a Successful Real Estate Agent
Having understood why many agents fail, here are top tips to help you succeed in your first year and beyond:
1. Have a Plan and Follow It
Developing a strategic business plan is important as it acts as a roadmap to business success. Begin with concrete yet realistic objectives that can be reasonably attained. Define how many houses you require to sell to achieve your income targets and map out the process to get there.
Provide details of your marketing plan, including the amount you intend to spend on marketing and the time required to market your products. Always revise the plan each time and make changes whenever you acquire new knowledge or experience in the field.
2. Stay On Top Of Your Market
Knowledge is power, especially in the real estate industry. As a newbie, your network is limited, and so is your access to insider information. To survive your first year, you need this insider information, learn from veterans, and understand the general direction of your niche to take advantage of early adopter benefits.
You can stay on top of what’s happening in your market by tuning in to your city’s top real estate podcast, expanding your network, and joining professional bodies and communities.
3. Avoid Timewasters
Unfortunately, not every call or lead you receive will lead to a successful sale. In fact, most of your leads will go to waste. Veteran agents have a knack for sniffing out time wasters or clients who just want to idle away their time viewing different properties.
As a newbie, it may be hard to distinguish between a quality lead and a client who is nowhere near ready to buy or lease. One way to avoid wasting your precious time is to listen to your intuition. Ask for proof of funds or pre-approval whenever a client drives you around in circles.
4. Prospect, Prospect, Prospect
Even if you close a deal, keep prospecting. Prospecting means you have a pipeline of leads in different stages you are continuously working on. This means that you don’t have dry months with zero business.
Additionally, new agents are still unsure of what works for them. So try out all types of prospecting, including door-knocking, starting a real estate podcast, networking, and social media marketing.
Keep experimenting and creatively trying out new prospecting angles to find out what works best for your target audience. This will ensure you have a constant drip of leads to follow up and hopefully convert.
5. Your Personality Should Fit the Profession
Real estate is not a field for everybody. You should consider your abilities and limitations carefully before choosing this type of occupation.
What is your attitude towards interpersonal relationships? Are you ready to work during odd hours? If your response is yes, consider a career in real estate, as it might be a good fit for you. Otherwise, look for other options or work on improving the skills and abilities needed for this type of job.
6. Realistic Expectations
It is important to note that achieving success as an agent in the real estate market does not happen rapidly. Often, it takes a lot of time, sometimes several months or even years, to accumulate clients and negotiate large contracts.
The business should have achievable income targets, and you should realize that your business strategy might take a long time before it pays off. The point is that success will follow if you remain consistent and keep improving.
5. Transitioning to Full Time
If you commence your real estate profession part-time, state when you will take up a full-time position. Real estate is a business that demands your best effort to make it work for you. Ensure that you have adequate financial capital to start your business and be willing to dedicate sufficient time to developing it.
6. Utilize Technology
Proper equipment can differentiate between a successful work and a frustrating experience. Get acquainted with the latest trends in the technologies and software that can be used in the real estate business. From sales and marketing tools, like a CRM system for leads management or virtual tours for your listings, to communication and community management through social media platforms, technology will keep you on top of your game.
7. Find a Mentor
Having a mentor is very helpful, especially during the first year of your career as a real estate agent. Try to find someone who has experienced success in real estate and is willing to impart some of that wisdom.
A mentor is a person who can prevent you from making mistakes, show you how to do everything correctly, and give you a hand whenever you need it. Additionally, you can work with experienced industry professionals to show you the ropes around marketing, prospecting, and revenue growth. These real estate coaches can also help you break into highly beneficial industry networks for exposure and increased business.
8. Master Marketing
Marketing is essential to your success as a real estate agent. Focus on designing and developing a business-oriented website and social network promotion. Rent online portals such as Zillow and Trulia that will enable the targeting of potential clients.
Use professional photographers for your listings so that they become as appealing as possible. Also, finding out how to market the property differently from your competitor is necessary.
9. Prioritize Your Customers
This is a debatable statement, but one fact stands out: the clients' needs should always be considered first. Take their calls, messages, and emails with keen interest and reply to them as soon as possible. Be consistent and keep them abreast of the proceedings while keeping track of what was said in previous meetings. A good relationship with the clients will mean they will return for more and recommend others to do so, forming the basis of sustainable business.
10. Develop a Strong Network
Networking is key in real estate. Go to fairs, join industry associations, and actively engage fellow professionals in the same field. People in your network can give referrals, help you with advice, and even open up new doors for business.
Succeed Where Others Have Failed With ICONS of Real Estate
Success in real estate is more than qualifying for your licensing examination and setting up a shop. It requires vision, capital, marketing, and adapting to changing winds. Above all, it necessitates constant client and personal development to stay ahead of the competition.
At ICONS of Real Estate, we have worked with numerous real estate agents and businesses to help them beat the 80% statistic. Not only have our clients thrived within their first year of joining the industry, but they have also become industry authorities in their areas of expertise.
Join hundreds of real estate agents making bank with ICONS coaching programs and start closing deals now.
You might also enjoy these recommendations: Education Is Required to Be a Real Estate Agent