There are many reasons why real estate agents fail. One reason might be that it simply turned out to be the wrong job for their personality.
Following is my opinion. You may disagree, and if so, I welcome your opinion in the comments!
The #1 reason for failure is the agent’s inability to shed their “employee” mindset.
If you’re beginning your career and don’t want to join the real estate agents who fail…
The first step is to realize that selling real estate is not a job. It is a business. Your business.
Yes, you must follow some brokerage rules. You may even have a broker or manager who helps you set goals and tries to hold you accountable. Someone may suggest steps you should take in your quest for clients.
But when all is said and done, it’s up to you.
As CEO of your own business, you make the rules.
Many real estate agents fail because they’re waiting for someone else to tell them what to do.
But it doesn’t work that was. As CEO of y our own company, you’ll have to get yourself out of bed every morning, get dressed, and get to work. If instead you sit home watching soap operas all morning, there will be no one to yell at you but you.
You can no longer look to someone else to outline your day’s activities or tell you what you must accomplish. You’re it. You’re the boss. You’re the CEO.
It will be up to you to decide which steps you’ll take in prospecting for clients.
Will you send prospecting letters by direct mail or email, or will you follow a different prospecting path?
Will you choose a territory to farm? Will you choose a niche and become THE expert in that niche? Or will you try to serve everyone, everywhere?
Will you follow up with every lead? If so, will you do it promptly? You don’t have to, because it’s your decision. You’re the boss!
Will you fill your personal website with informative content, then blog regularly to enrich that content? Or will you even create a personal website?
Will you post a well-written personal bio on your own website, your broker’s website, the major real estate portals, and all of your social media accounts?
The level of service you provide will also be up to you.
Some real estate agents fail because there’s no one to push them into doing more than the minimum required by what they see as their job description.
If you choose not to return client calls promptly, no boss will reprimand you. You’ll simply fail to get rave reviews or receive referrals and repeat business.
You’ll be responsible for educating yourself about your community and your real estate market. Will you attend open houses? Will you track the trends, so you know what’s selling and whether prices are rising or falling? Will you attend city council meetings? Will you join the Chamber of Commerce?
You’ll be the one to decide whether you’ll take extra classes or merely do continuing education as required to keep your license.
As CEO, your work doesn’t end there…
In addition to “bossing yourself,” you’ll have to wear at least one other hat: Chief financial officer.
As chief financial officer, you’ll be responsible for creating a budget, sticking to it, and paying the bills on time.
It isn’t easy to set a budget for a real estate career. After all, there is no way to know how much income you’ll have in a given month. Even after you’re extremely successful, things can happen that cause transactions to fail or be delayed.
That means: You’ll have to do the best you can AND refrain from over-spending when you have a high income month. Pay all the bills on time, then put some aside for those months that might be a bit lean.
A sad story of budgeting ignored…
I once knew two agents who worked well together, so decided to leave their brokerage and go out on their own. One of them obtained a broker’s license and was “the boss.” The other was in charge of keeping the books.
Unfortunately, she forgot to consider their overhead – such as the phone bill, the rent, electricity, etc. Every time they had a good closing, she’d spend the money on more advertising. And rather than go with the tried and true, she placed ads in magazines all over the northwest – and of course in California. Much to her disappointment, those ads didn’t bring clients flooding in.
The broker was not at all happy when he had to reach into his own pocket to pay for overdue bills. He also wasn’t happy when those missed payments appeared in his own credit report. (She had also forgotten to mention to him that she hadn’t been paying the bills on time.) That partnership was short-lived.
The takeaway: Some real estate agents fail because they forget to set aside money for their overhead expenses.
You may not need to pay extra on your phone bill and you won’t need to rent office space. But you will need fuel for your car, office supplies, signs, MLS and NAR dues, E&O insurance, an autoresponder, web maintenance and hosting, and possibly an allowance for taking clients to lunch now and then.
You’ll also have to allocate funds for marketing, but consider those expenditures carefully before you dive in.
Consider the tried-and-true marketing methods such as:
- Building buyer, seller, and/or niche email lists through your website and emailing to them regularly
- Sending prospecting letters to a neighborhood or niche via direct mail
- Maintaining contact with all past clients and with your sphere of influence
- Networking at meetings and events
- Speaking at service club meetings and/or senior centers
- Being active on social media
- Knocking on doors
You will be approached with an abundance of advertising “opportunities,” but be careful. It’s easy to spend a lot of money in places that won’t bring you business.
Before you jump into having your name on a bench at the golf course or an ad on the carts at a grocery store, talk to others who have tried it.
When I was an owner/broker I made my share of advertising mistakes. One of them was introducing the whole team, along with photos, on the placemats at a local café. Aside from having people stare and whisper when we had breakfast meetings there, we got no response at all from that ad.