Imagine if a deadly disease hit Earth with a devastation rate anywhere near the failure rate in real estate… People everywhere would live in complete, utter panic. EIGHTY-SEVEN percent. Think about that… 100 will start. 13 will survive! Sounds intriguing. Except it’s your livelihood at stake. Why do nearly nine out of every 10 agents fail and quit the business? I’ve worked with and studied real estate professionals for a long time, and I’ve identified 10 of the biggest reasons why agents fail. Avoiding these pitfalls will help you join that elusive “Club 13” — the 13 percent of agents who actually survive and succeed in this business. Let’s go…
10 Reasons Why Real Estate Agents Fail
- Interested vs. Committed. Just being interested in your career isn’t enough. When you’re interested, you do things when they’re convenient. Success in real estate is all about being fully committed, which means doing whatever it takes as long as it takes to achieve your goals. If you’re not fully committed, it’s time to reassess your career choice.
- Not Strategic. Can you explain your market trends easily? Do you truly know your market? What’s selling? What’s not? To survive in real estate, you need to look at your marketplace from a strategic standpoint. You must look at the hot sheets every day. You’ve gotta own that knowledge and become the knowledge broker in your market. It’s not enough to simply like houses and enjoy working with people. Take a step back, analyze your market and make sure you know it, and you know your place in it.
- Fear of Mistakes & the Desire to Look Good. There’s a lot of vanity in real estate, which can lead to people shying away from anything that might paint them in unflattering light. But you can’t be afraid to make mistakes. Mistakes are how wisdom is gained. Accept it’s okay to make mistakes. Try new things, see what works, learn from what doesn’t, and always keep moving forward. The more mistakes you make, the more you’ll bridge the gap between knowing and not knowing.
- No (or Wrong) Role Model. Having someone to look up to, to aspire to, to model your behaviors on is a hugely critical step to help you reach that “next level” in real estate. Far too many agents have no role model for their business. Or they have the wrong one. To accelerate your ascent in this business, find someone who is successful in both life and business and model your behaviors on theirs.
- Your Gas Station is Only Open One Day a Week for an Hour. As a real estate agent, your No. 1 priority is attracting customers. It’s not a part-time pursuit. Far too many agents do just a little bit of marketing once a week and hope for the best. Lead generation and lead conversion need to be your primary focus. If there was a way to teach every new agent this philosophy and force them to live up to it, that 87% failure rate would decrease dramatically. Focus on the “Core 4″… Database. Open Houses. Geographic Farming. Online Presence
- Monday-Friday, 9:00-6:00 Mentality. Being a real estate agent isn’t a job. It’s a business. It’s YOUR business. You’ll get out of it what you put into it. Especially if you’re new, you absolutely must put in the time and effort. All the money is made before 9:00am and after 6:00pm. If that doesn’t work for you, you might be in the wrong business.
- No Sales Swagger. Long ago NAR released a report that said the vast majority of new agents come into real estate with no sales experience, no marketing experience and no negotiation experience. What are the essential skills of succeeding in real estate? Sales. Marketing. Negotiations. Hmmm. If you haven’t mastered these three skills, you need to be working on them constantly. Put yourself in situations where you learn the objections, get hung up on and gain that experience. Putting yourself in those situations repeatedly will break down those fears of calling FSBOs, expireds and the like. I often encourage brand new agents to work with FSBOs and expireds to break them in with “the most challenging” clients. When you know what to say, everything becomes easier.
- No Goal/Broken Into Numbers That Get Measured. When you know your numbers, you put yourself in control. On average, how many leads does it take you to convert one sale? 30? Great! 162? Great! “I dunno.” Not great! As long as you know your numbers, you know what you have to do. If you don’t know your numbers, you’re just hoping for that winning lottery ticket. Knowing your numbers makes your business predictable. Being predictable leads to success. Know your numbers!
- Poor Schedule, Weak Routines. If you’ve followed me for a long time, you’ve heard me say it a million times: “Show me your routines and I can predict your future.” If your schedule isn’t aligned with your goals, instead of achieving your goals, you’ll end up wherever your schedule takes you. The key is figuring out the specific activities that will lead to the achievement of your goals. Then you schedule those activities. The role of discipline in your success cannot be underestimated. Schedule everything and find a way to hold yourself accountable.
- Lack of Financial Management. Lots of people get into real estate thinking it’s a low overhead business with an opportunity to make big, giant paychecks. Those days are long gone. This business is so competitive, you need a funding plan not only to survive, but to invest in your business and build it in an efficient way. Make sure you’re managing your money smartly in order to avoid that 87% failure rate.
So now you know the 10 biggest pitfalls that cause the catastrophic 87 percent failure rate in real estate.
What are you going to do with this information? In what areas do you need help? Where are you seeking that help? Let me know your comments below.