Statistics show that 87% of the people who obtain a license fail at real estate and drop out within 5 years.
WHY do so many fail at real estate?
My observations over the past 30+ years tell me that people fail at real estate for 5 primary reasons.
- False expectations – becoming licensed for the wrong reasons
- Lack of commitment
- An employee mindset
- Lack of money
Becoming licensed with false expectation is a big reason why many fail at real estate.
As an agent and then as a broker, I watched agent after agent enter the business thinking that it was all about talking with people, showing houses, and writing offers. What they believed about life as a real estate agent was nothing but “Pie in the sky.”
They believed things like:
- What they learned in real estate licensing classes was enough. They didn’t need to learn more.
- Being their own boss meant they could choose to work only when they felt like it. They would have plenty of free time to do as they pleased.
- Someone else would hand them clients.
- If there was a problem, someone else would handle it. (Well, really, they had no idea that there would be problems.)
- Buyers and sellers – and other agents – would always be friendly, polite, and honest.
- They’d make a lot of money without much effort.
I’m still talking to people who may be in the business for the wrong reasons.
As a real estate copywriter, I often write bios for new agents. One of the questions I ask is “What led you to a career in real estate?” When someone says: “I just love people,” I cringe. I hope they still love people after their first year in the business.
Fear prevents success for many.
Some will fail at real estate because they are afraid to promote themselves.
- They’re afraid family and friends will make fun of their career choice, so they don’t want to talk about it or ask for support.
- They’re afraid to introduce themselves to strangers.
- They’re afraid to ask for business.
Lack of Commitment
They simply aren’t willing to focus their energies on their new career. They want to treat it like a job – something you do for 40 hours per week, then forget about until it’s time to go back to work. And that ties to #4…
An employee mindset.
With the exception of a few resourceful, outstanding employees, employees are not invested in the outcome of their work as it relates to their employer’s success.
They go to work and (hopefully) do what the boss, supervisor, or manager tells them to do. They don’t think about whether there’s something more productive that they could be doing. They don’t worry about whether customers will come in to a store, or whether those customers will give their place of business a good recommendation.
They collect their paychecks and leave worrying about the business for others. Unless they’re exceptional, they don’t think about work between the time they leave and the time they return.
This mindset is almost a certain sign of someone who will fail at real estate.
Lack of money holds many back from success.
They get into real estate thinking/hoping they’ll start earning right away, and that rarely happens. Most new agents either need a spouse/partner who will support them for the first few months or a bank account that will sustain them.
Without that money, new agents hesitate to spend any money on marketing, which often means they aren’t attracting any clients. The only way around that is to spend much more time and energy, but even then, some expenditures are necessary.
My book, 107 Ways to Build Your Real Estate Career on a Tiny Budget outlines more than 90 ways to promote yourself without spending more than the price of fuel for your car. (And yes, I realize that costs plenty right now.)
In addition, lack of money causes many to stay in their old jobs and try to do real estate part-time.
And no one can blame them. If they need that weekly or monthly paycheck to keep their household together, they really can’t let go of the present job. As a result, they can’t put their time and energy into building a real estate career. While part-time real estate does work for a few, it is a very difficult way to get a start.
As you know, real success comes from dedicating your time to securing and serving clients.
If you have friends (or past clients) who are thinking of becoming real estate agents…
…. Send them a link to this page. Then encourage them to get a copy of my new e-book, 27 Reasons Not to Choose a Career in Real Estate – and 12 traits that make you a good candidate for success.
If they’re a close friend and you’re worried that they’re about to make a poor choice, get the book yourself, print it out, and hand it to them.
It’s not very long, just 10 pages, but it will give them good information about the reality of pursuing a career in real estate. It will serve as a warning to those whose personalities or preferred lifestyles won’t mix well with life as a real estate agent. It will also give encouragement to those who are a good fit for the business.
Click here to read more about 27 Reasons Not to Choose a Career in Real Estate – and 12 traits that make you a good candidate for success.
You don’t want to see someone you like get started only to fail at real estate. And… you might hesitate to point out the reasons why the work you love wouldn’t work for them.
So – let me tell them instead.