4 Major Reasons Why Real Estate Agents Fail Their First Year (…and how to avoid it.)
Being a real estate agent can be incredibly rewarding: unlimited income potential, a flexible schedule, and the opportunity to network with many different people, and don't forget assisting someone with one of the largest transactions of their lives. So, why do so many agents fail?
Research has shown that as many as 80% of new real estate agents fail or quit within their first year in real estate. When you think about it, such a high real estate agent failure rate should be a cause of concern for any aspiring agent. What are the top four major reasons why so many fail at real estate?
No clear plan of action and goals/lack of organization.
Having a clear plan of action or goals and ways to achieve that goal is crucial for any business. Top real estate agents are always setting and evaluating goals and action plans. It’s not as simple as setting a yearly goal either. It’s constantly being aware of your progress towards your goals and actions plans. Whether it’s the number of transactions to complete, the number of sales to make, or the number of prospects to contact. If you are organized, follow up with leads, communicate well, and pay attention to the needs of your clients, you will close more deals. Invest in a CRM (customer relationship management platform) and use it. Utilize a calendar or planner (mobile or paper), set up action plans in your CRM that remind you to complete tasks for each client. Having clear goals and action plans will keep you accountable and boost your profitability.
Another reason why most people fail in their first year in the business is that they run out of money. Knowing how to budget your money is essential. Successful real estate agents know they must spend money to build their business to make money, and they understand the importance of it. Industry experts suggest that you need at least six months of savings to carry you until you make your first sale. This is not a “steady paycheck” job. You only get paid when you close a deal. You may have five closings one month and none the next. You need to know how to budget and how to stick with the budget.
Understand your market.
Remember, you are the expert! Your job as an agent is to know your market. Stop being zip code based and become “neighborhood” based. Zipcodes can involve a lot of different neighborhoods and a neighborhood can be completely different from another within the same zip code, and consumers aka “your clients” rely on you to understand what's involved in that specific neighborhood. It’s very hard to understand your market on a zip code level, so become a master-level expert in the neighborhood and your clients will love you for it. And don’t be afraid to specialize in the different niche markets like first-time homebuyers or renters, or investors.
Not knowing how to market their business
Many real estate agents fail because they don’t know where or how to market themselves. Many agents constantly share their latest and greatest listing or brag about how many houses they sold in a week or how great they are. The list goes on. However, this strategy will only get you unfriended or unfollowed on social media. One of the best ways of marketing yourself is by sharing helpful information with your audience. This can be shared through blog posts or status updates. Since such content is not spammy and actually helpful and non-promotional, people are likely to share it with others in their networks. With time, people will start recognizing you as an authoritative and knowledgeable figure in the real estate industry.