Depending on the source, it is said that 85-90% of real estate agents fail. When you succeed in real estate you can make millions. Many agents make millions each year, yet most who get into the real estate business fail.
What separates successful real estate agents from the failures?
I want to share with you the most common reasons real estate agents fail.
# 1 – Too easy to start.
One of the reasons so many people fail to succeed in real estate sales is that there is a very low barrier to entry.
For example, the requirements to sell real estate in the state of California are:
- You must be 18 years of age.
- Complete 135 hours of required education.
- Apply for your Salesperson Exam/License Application, including fingerprinting and background check.
- Pass the California Salesperson License Exam.
Within a few weeks, you can become a real estate agent. With such low barriers, many people can enter the real estate business. When you don’t have to make a big effort to get started in a business you will less likely to succeed.
# 2 – Thinking, wrongly, that the real estate business is about homes.
The real estate business is about people. If you aren’t good with people, you have no future in real estate.
The most important thing you must know about yourself is that you are easily replaceable. Ask anyone in your network about how many real estate agents they know. Most people will tell you that they know multiple real estate agents. You are easily replaceable. Your personality is more important than any other skill you might have.
The best real estate agents have the right personality. If people feel comfortable with you, there is a better chance that you will succeed. In any kind of service business, there is always a lot of competition. If you have an abrasive personality or if people can’t trust you, you will be replaced with one of your many competitors.
# 3 – Networking the wrong way.
The most successful real estate agents are networking machines. They not only understand the importance of networking, but they understand the importance of networking with the right people.
Here is how successful real estate agents network:
- Instead of handing out business cards, they collect business cards. There is a big difference. When you hand out a business card you lose control of what happens next. There is a good chance that your business card will end up in the nearest trash can. When you collect business cards you are in control. You can follow up after your meeting. Focus more on collecting business cards. Once you have a business card follow up.
- When you network it is important to listen. The best networkers are great listeners. To be a master networker you must be a master listener.
- Avoid distractions like checking your phone during networking events. Stay focused in the moment.
- Seek out paid networking events. The higher the barrier to entry the less competition will you have in the room.
- Make new connections in the room. Many people gravitate toward the people they already know in the room. It is the lazy way to approach networking. You are there to make new connections. Meet people you haven’t met yet.
- Follow up right after you make a new connection. Make sure that you reference your conversation with the person. It is important to connect your follow-up email or phone call with a strong reference to your meeting.
- Keep following up. Don’t be annoying, but follow up multiple times. Most people never follow up. Those who follow up think that once is enough. Follow up at least a couple of times every year.
- Take a moment to write a handwritten note or thank you card. This is time-consuming, but it is very valuable. Most people refuse to do this, but it is one of the most powerful ways to follow up.
- Create your own networking events. When you organize a networking event you are in complete control of who is attending.
- Give referrals or make helpful introductions. It is true in networking that those who give referrals get referrals.
- Networking is about making new connections. Avoid the comfortable networking environments where everyone knows your name.
- Keep it professional. Don’t drink more than one alcoholic beverage. You are not there to get drunk.
With social media, it is easier to grow your network than ever. Remember that social media can help you do all of the above with great efficiency.
# 4 – Treating your business as a hobby.
Expecting part-time effort to result in full-time success. If you try to become a real estate agent, you will fail. Trying is not enough. Most people who try fail. You have to make a real commitment.
It is difficult to succeed as a real estate agent. It is even more difficult to succeed as a part-time real estate agent for these reasons:
- You are competing against real estate agents who are working full time. You basically have fewer hours in a day to accomplish your tasks.
- When a prospective client finds out that you are a part-time agent you are less likely to get the listing. Think of it. Would you want a part-time or a full-time real estate agent to sell your home?
- When you are a part-time real estate agent it is easier for your to quit. If you have another source of income, you have less pressure on you to succeed. Many people perform better with their backs against the wall. As a part-time agent, you remove that pressure and you make success optional.
- It might take you several years to close your first real estate transactions. Many people will not stick with real estate that long and quit before their first success.
- If you believe that it takes 10,000 hours to become an expert, getting there as a part-timer will take you a very long time.
# 5 – Waiting for a miracle.
If you are not a self-starter you will fail. You have to make things happen. Hustle. You must have a burning desire to succeed in real estate. But, success won’t happen without a real commitment on your part.
Those who fail are waiting for things to happen and hope for things to happen. If you want to succeed make it happen.
# 6 – Refusing to do the hard things.
As a business owner, you can choose how you spend your working hours. When you do what you want instead of what must be done to succeed, you will fail.
The hard things in real estate are:
- Lead generation
- Making new connections
- Networking with the right people
- Budgeting like you might not have another transaction again
# 7 – Not enough lead generation.
For those who fail, lead generation was not #1 priority. The majority of your time should be spent on lead generation.
Here are some lead generation ideas of successful real estate agents:
- Network with people on Facebook.
- Paid leads such as Zillow, Realtor and other real estate search sites.
- Door hangers work. Yes, it is hard work, but it works if you are willing to put in the work.
- Ask for referrals. Don’t hope for a referral. Proactively seek them out. Regularly contact people in your network and ask if they know anyone who wants to sell of buy real estate.
- Create a great website. Your website is only the beginning. Use content marketing to get ahead of your competition. Most real estate agents ignore the importance of content marketing and SEO.
- Offer home valuation on your website.
- Advertise on Facebook.
- Use postcards to advertise your services.
# 8 – Failing to invest money.
When you start a business you have to invest money. Unsuccessful real estate agents don’t see that need to invest money into their business. You are running a business. You have to invest money in your business.
# 9 – Lack of focus.
Say yes, when they should say no. As a real estate agent, you have many options. But, trying to do everything for everyone will result in failure.
Focus on one or two areas put all of your energy behind it.
You can’t succeed if you want to help customers buy and sell homes in a hundred mile radius unless you live in a rural area. If you live in a large metropolitan area, it is best to focus on one area and become the go-to expert in that area.
# 10 – Wasting time on the wrong activities.
It is easy to waste time on activities that don’t help you succeed.
Failing real estate agents waste time the following ways:
They network the wrong way. They think that hanging out with the same people all the time is networking. Making new connections is the most important part of networking. Nurturing your best referral sources is also an important part of networking.
They are chasing the wrong prospects. There are people who like talking to real estate agents. You need people who want to sell or buy real estate. If you are going to succeed, you will be quick to separate prospects from noise.
# 11 – Failing to prepare.
Clients know when you show up for an appointment unprepared. I have recently purchased a condo and one of the agents that showed me a property arrived completely unprepared. Because of his lack of preparation I completely lost interest in the property.
When you fail to prepare you will fail.
# 12 – Lack of availability.
Availability is key. Being a real estate agent is a lifestyle. The best agents are always available. Always. Even if they are traveling in Europe. They will answer the phone.
# 13 – No lasting power.
Without endurance, you will fail in real estate. Many real estate agents give up too soon. When you start a real estate business you are in for a marathon.
How long does it take to succeed in real estate? Give yourself at least two years to start to see some success. The speed of your success is the result of your effort, skill, market conditions, and location.
# 14 – Lack of motivation.
No one really believes that you will succeed in real estate. You have to be able to motivate yourself when no other person will. The drive to succeed must come from within you.
Successful real estate agents stay motivated the following ways:
- They surround themselves with successful people. The more time you spend with successful people the more success you will achieve.
- They emulate the most successful agents in your area. Reach out to them. Learn from them.
- They visualize success. Don’t confuse this with dreaming. Visualize success and take the necessary actions.
# 15 – Inability to delegate.
Inability to know when to do something yourself and when to delegate. When you start out as a real estate agent you will do most things. But, as you become busier you have to delegate.
Delegate tasks that do not generate leads for your business.
# 16 – Must be likable.
To succeed in real estate, you don’t have to be cheesy, annoying or a kiss ass, but you have to likable.
# 17 – Unable to deal with stress.
Stress cannot be eliminated. If you are going to succeed as a real estate agent, you have to learn to deal with stress.
Successful real estate agents deal with stress the following ways:
- Even big problems have solutions. It helps to break each problem you are trying to solve into smaller chunks.
- Don’t stress about what “might happen”.
- Don’t let difficult situations get out of hand. The longer you avoid a problem the larger it becomes.
- Remind yourself that eventually all problems will be resolved.
# 18 – Inability to budget.
In real estate, there are ups and downs just like in any business. If you are going to succeed in real estate you must learn to budget for slower periods in business.
To help you succeed as a real estate agent, consider the following budget advice:
- Aggressively save money until you have an emergency budget in place. A credit card is not an emergency fund. You need cash saved. An emergency fund should keep you afloat for at least one year.
- Create a personal budget and stick to it.
- Live beneath your means. Always.
# 19 – Failure to make the right partnerships.
Once a real estate agent referred me to a mortgage professional. When I asked her if she knew why the mortgage professional would not respond to my phone calls, the agent told me that she doesn’t really know the mortgage professional.
Why would you partner with a mortgage professional you don’t know?
An experience like that reduced the quality of the real estate agent in my mind. Partnering with the wrong people will reduce your chance to succeed in real estate.
# 20 – Failure to stick to a morning routine.
You should create and stick to a daily action checklist. You should start every day with a plan. List the things you must do every day to reach your goals. Make sure that everything on your list is measurable. For example, I will make 10 phone calls every morning to reach out to new prospects. Or, I will will email 25 people every day to grow my network. I will follow up with my leads each morning. These are measurable goals that are important to reach your goals.
photo credit: Hunky Punk A seat for passersby, 75 East Bay Street (1816), Charleston, SC via photopin (license)