WHY DO MOST REAL ESTATE AGENTS FAIL? AND HOW NOT TO BECOME A STATISTIC
It is no secret that at the upper echelon of the profession, real estate agents make bucketloads of money. Less known is that the average annual income for real estate agents in the United States is less than $40 000.
In fact, according to NAR surveys in the past decade, over 87% of real estate agents fail during their first five years.
This number might be even higher after NAR completes its next survey because although house prices are up and the market is described as ‘hot’, inventory is way down from pre-Covid days. This means there are fewer slices of the proverbial pie to go around.
In this post, we’ll look at some of the main reasons why the majority of real estate agents fail. If you’re new to the business or considering a career shift into real estate, this post is well worth a read: forewarned is forearmed!
1) The Showbiz Smokescreen: Immediate Risks Precede Eventual Rewards
Glamorous shows like ‘Selling Sunset’ and ‘Love it or Lease it’ have done nothing to remind aspiring real estate agents of the first guarantee of the business: struggle. If you decide to become a real estate agent, you'll face immediate risks and have to overcome them long before you'll reap the eventual rewards.
When such risks are overlooked, they become icebergs that can sink any aspiring agent's career en route to the golden shores of real estate success.
|Shows like the Netflix smash hit ‘Selling Sunset’ contribute to the Showbiz Smokescreen that glosses over many harsh realities of life as a real estate agent.
The 'Showbiz Smokescreen' can be described as the glamorous and affluent persona real estate agents are given through reality television and social media - where the wildly successful sellers of property flaunt their prosperous lifestyle and make life as an agent look oh-so-easy!
Ironically, nothing could be further from reality than this sort of reality TV.
There is no hourly wage. It’s a hustle from the get-go, and the competition is fierce. Many agents simply run out of money or even find themselves going into the hole before they can generate enough momentum (income) to make a real estate career sustainable.
Many agents fail and drop out of the business not because they want to, but because they need to find a job with a guaranteed income to sustain themselves and their loved ones.
If you are preparing to embark upon a career in real estate, be sure you are not fooled by the Showbiz Smokescreen. And be sure you have the resources (and stamina) necessary to make it through some lean years at the outset.
2) They Bring A 9-to-5 Mentality To A 24/7 Profession
Aside from financial hardship, bringing a 9-to-5 mindset to a 24/7 profession is probably the second-greatest factor behind real estate agent burnout.
Real estate is usually the fourth or fifth career a person chooses, and many come to the profession to escape the 9-to-5 setup. Little do they suspect that they are swapping 9-to-5 for 24/7 when they become an agent. Instead of having more free time, you will have less.
If you are lucky enough to get listings and clients, you'll soon discover this. Yes, you'll start your career wanting for nothing more than your phone to ring. But are you prepared for your phone to ring at all hours of the day with casual inquiries or requests for you to drop everything to show someone a property?
Your day is never finished as an agent. Since most of your clients are probably 9-to-5 professionals, your life will get busier during the hours when the nine-to-fivers find themselves with some time of their own.
Phone calls on weekends, during family moments, or what used to be known as “leisure time” can grate upon anyone’s patience. As a real estate agent, if you are unprepared for this to become the constant norm, the price of success, then you may decide this is not the profession for you.
3) They Spend Too Much Time Branding Not Enough Time Marketing Listings
|Though branding is a vital part of any real estate career, expertise in marketing listings is where your bread and butter lies. Virtual Tours have become a property marketing must. Unlike video walkthroughs, which have seen a sharp drop in popularity over the past year, Virtual Tours are interactive, multi-directional, and user-driven.
These days, beginning real estate agents are bombarded with the importance of branding. There are branding coaches, seminars, metaverse meet-ups, books, courses - you name it. Branding has itself become an industry. And a lot of this industry is focused on leveraging social media to turbocharge your brand.
All necessary advice, no doubt. But branding might not be the most important form of real estate marketing you will need to master.
Marketing your listings deserves at least as much focus as marketing yourself - probably more. For every hour you spend studying how to market your brand, you should spend two hours learning how to present a property in the best possible light.
After all, your charisma and social media presence might earn you new listings; but how you market these listings is what earns you your commission. As the old saying goes 'In a hot market, let your listings be your brand!'
4) They Are Tech-Savvy, Not Proptech-Savvy
Most new real estate agents in 2022 and beyond are well-versed in the ways of the smartphone. Many enter the real estate business with hopping social media accounts across many platforms, and many can rattle off a tweet or text, shoot a selfie or send out a story far faster than older agents who have had to adapt to the new technology.
But knowing how to use proptech (property technology) to propel your ascent as a real estate agent is much different than simply being ‘tech-savvy.’
Technology is the key to success for newer agents who haven’t had the time to build up a lifetime of clients. But before you can maximize the value of virtual property marketing, you have to learn what is available in the proptech toolkit. Know your weapons and know when to use them - this is the sort of knowledge that impresses clients and keeps them coming back to you in the future.
If you are looking for three elements of proptech to master as you market your listings, look no further than NAR's 2022 Buyers and Sellers Generational Trends Report which has identified Quality Photography, Detailed Copy, Floor Plans, and 360° Virtual Tours as the four most-important marketing ingredients to buyers.
|In 2022, property buyers once again reported that quality photography was the most useful website feature in their search for property. Our Day to Dusk was built with this visual preference in mind. No need to wait for that perfect sunset. Snap a photo at any time of day, and we’ll supply those magical pastel hues.
A whopping 84% of buyers reported that they found quality photography as a valuable component of their property search.
As a new agent, you should learn as much as possible about photo editing services like Image Enhancement, Item Removal, or our Day to Dusk edit. Remember if you sputter when it comes to marketing your listings, all the social media branding in the world will not prevent you from becoming one of the 87% of agents who are forced to find another career after the first five years.
5) They Underestimate The Importance Of Speed To Market
As you start your real estate career, every client you are lucky enough to attract is an opportunity to make a big impression and generate an explosion of word-of-mouth positivity. Don't waste time showing them how committed you are.
One of the surest ways to accomplish this is to learn how to shoot, edit and upload a high-quality MLS listing yourself. This will give you a jump on all the agents who must book a photographer to arrange a shooting. And it's never been easier to do!
|Jesse Peters shoots all his own real estate photos using his iPhone 11 Pro and leaves the editing up to us!
This impresses every client because it demonstrates: a) that they are a priority of yours; b) that they have selected an agent who knows how to present a property in the best possible light.
But it doesn't just impress clients. It is probably the healthiest habit to get into as a real estate agent. In a hot market where bidding wars are the norm, the faster you get your listings to market, the faster you sell them. And the faster you become at turning over your listings, the closer you will come to the sweet smell of real estate success!
Turning listings over quickly increases your annual bottom line. And gives you more time to go around showing prospective clients how good you are at marketing and selling real estate.
If you want to learn how to increase your marketing quality and how to get properties to market faster than any other agent in your area. Check out any one of these solutions:
- Day to Dusk conversions and all our 16 Image Enhancement edits (guaranteed 24-hour turnaround)
- Virtual Staging edits - jaw-dropping transformations in many alluring styles (48-hour guarantee)
- Our full-color 3D Floor Plans also have a 48-hour turnaround time; all other Floor Plans (24 hours)
Another helpful (and free) step in increasing your speed to market is to Download our Pre-Photography Checklist and email it to your clients the minute they sign you up to sell their property. This document can help homeowners get their residences ready for a photo shoot. It's a room-by-room guide that teaches property sellers what to do in preparation for the real estate photographer's arrival - even if that photographer happens to be, the agent.
One of the easiest ways to ensure that you are one of the fastest movers around is to learn to photograph your listings with your smartphone.
We have numerous clients (like Jesse Peters of Winnipeg, Canada) who now shoot all their listings themselves with their smartphones and leave the editing up to us.
6) Too Much Free-And-Easy Not Enough Routine
The free-and-easy lifestyle might be what draws many to the profession of real estate, but the ability to establish and stick to a routine is what the vast majority of successful agents credit with their success.
The good news is that you are free to choose, implement and tinker with your routine. Try to structure your life in the most enjoyable way possible, but make sure you consistently hit all of the ingredients of your routine to success.
A healthy weekly routine could include some or all of the following.
- Time spent prospecting leads - this could be cold-calling, door-knocking, strategic sponsorship, or public speaking (Check out these 10 tips for successful lead generation)
- A daily social media post
- A daily MLS check-in to see what new listings have arrived on the market and what latest sales data is available
- Reading blog posts (like this one) on the latest virtual property marketing techniques
- A daily follow up email or text to a previous client
- A weekly visit to a real estate seminar check-in the metaverse - a great way to rub elbows with like-minded real estate agents from across the globe
Whatever your preferences for a routine, it is vital that you establish one in your quest to develop a prosperous real estate career.
7) They Abandon Their Lead Generation Efforts As Soon As They Get A Few Sales
It's human nature to take your foot off the pedal when things start going well. But the temptation to do so might be even greater in real estate, where commissions are large and the intake from one sale can take months of financial pressure away.
The problem is, for real estate agents in the first five years of their career, pulling back on lead prospecting in the aftermath of a sale can be a fatal mistake in the long run.
The best time to turn up your lead gen efforts is directly after you successfully sell a property.
In a PREVIOUS POST, we introduce the lead generation technique of 'Circle Prospecting', which involves door-knocking the homes in the vicinity of a property you have just sold.
But whether you take up the practice of circle prospecting or not, you must try to use each property you sell as a springboard to attract more leads. This could involve a "Just Sold" social media post, a direct request for referrals from the client whose property you've just sold, a tweet, or even something as old school as a letterbox drop announcing that you've just sealed the deal for another happy customer.
Whatever you do, don't use your sales success as an excuse to let up on the essential practice of lead generation.
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