There is a widely repeated statistic that close to 8 out of 10 realtors don’t survive the first year in business. I’ve attempted to track down this particular report from the National Association Of Realtors but haven’t been able to find the source. It also appears to be at least 10 years old, so we’ll just take it with a grain of salt.
In my experience I find this number significantly lower. In fact, I’ve almost never worked with an agent who quit within their first 2 years of business.
However, a fair share of agents do struggle immensely getting out of the gate, and I’ve identified some common reasons why this happens.
So let’s get started and see if any of them apply to you.
Most People Are Not Used To Working Completely Unsupervised
We’re all used to structure, routines, and being held accountable by a boss. When you’re a real estate agent, you have total freedom throughout the day. That means you can wake up whenever you want, work on whatever pleases you, and no one is going to give you hell for coasting throughout the day (except your spouse when they find out!).
It’s the same reason why so many high schoolers get into college/university their first year and their grades tank. You need to step up and create your own structure and routines to follow, and most importantly, you need to find ways to hold yourself accountable for your actions, or inactions.
It’s crucial to have a day that is planned out, even if you have no clients. It’s the work you do during these times that plant the seeds for future business. The vast majority of this time should be dedicated to prospecting.
You Need To Fall OUT Of Love With Training
As a former trainer myself, I say this with complete conviction. The real estate industry has sold us on the idea that we need to constantly learn in order to succeed. And while this is true for things like market conditions and industry changes, once you learn how to prospect and generate leads, create a business plan, and set up the mechanics of your business, you can start finding clients and making money.
Building a successful real estate business is incredibly easy to learn, but it’s hard to do, for the simple fact that learning is fun and grinding is painful. Many agents pursue this long-term goal of attending training sessions with the secret hope of hearing about a new prospecting method that is free, painless, and automated. We all know it’s not going to happen. Waiting for something new to be invented instead of doing the work now is what delays a lot of agents’ path to success. Avoid shiny object syndrome!
Making money in real estate is around 10% hard skills (knowing the sales skills and tactics) and closer to 90% soft skills (being out there and knowing how to talk to people). No amount of training is going to change this ratio, so once you learn the skills you need, you must get out there and put them into practice right away. Less learning, more doing.
Piss Poor Money Management
Most real estate agents treat their commissions like a pay check from a job. They forget that they’re running a business that requires a chunk of that money to either maintain momentum, or grow and scale. They also ignore the fact that some of that money will need to go towards paying their taxes at the end of the year. As a result, they’ll spend all of it now and deal with the rest later.
It doesn’t matter what type of business you’re operating, if you’re busting your ass every month and drowning in debt, you’ll never have any sense of motivation or resilience. Making money is important, but knowing how to control your spending during the first few years is what will ensure that you survive the tough times.
Not Dedicating Enough Time To Roleplaying
Professional football players study their playbooks and practice running their plays over and over, even if they’ve run them hundreds of times already.
Salespeople at Fortune 500 companies have sales manuals that outline processes and scripts, and they practice them to perfection.
And then there are real estate agents who almost never practice their soft skills and sales interactions. In fact, the most common objection a customer gives is “I want to think about it” and this still stumps 90% of agents.
Most real estate agents feel silly practicing their skills, or are waiting for someone else to take the initiative and invite them to be a role playing partner. Its why I rarely see agents who practice consistently, and the few I know that do, are wildly successful at their craft.
Getting better at your soft skills is a massive priority. If you want to practice scripts and objection handlers and have no one to practice with, record yourself reading them on your phone and listen to it repeatedly at the gym or in the car until you’ve internalized the content.
Running Towards Comfort Instead Of Facing What’s Necessary
There’s a saying that goes, you’ll spend more time running away from an oncoming storm than just turning around and running through it.
Prospecting is the most important activity you can do to build a successful real estate career, yet most agents spend very little time actually doing it. After all, it’s hard to talk to people with excitement only to be rejected.
The truth is, the more you get rejected, the more successful you become. This happens for two reasons:
1. The more no’s you get, the more yes’es you get.
2. The more no’s you get, the more you sharpen your skills.
This means your policy should be to ALWAYS be confronting the tough activities in your business because they bring you closer to your goals. If you’ve gone through the day and see that you didn’t meet any discomfort, it means you didn’t work enough on the important things to build your business.
It’s hard to do things alone. A support system will help you stay on track and compress your time frames. Make sure you have good mentors in your corner to help you navigate the rough waters!