The other day I was looking through some old sales in a neighborhood. As I looked at the bottom of each listing, the names of the real estate agents weren’t familiar to me. You might not know it, but work as a real estate agent isn’t as glamorous as you might see on T.V. There is a super high failure rate and by the time a real estate agents hits year 3 in the business, a lot of them have disappeared. Below are some of the reasons I think real estate agents fail.
What goes wrong
1. Bad mindset. There are days working in real estate sales that suck. Unfortunately, you are a salesperson. No one cares that you had a bad day. If you go on a listing call and enter with a bad attitude, you will lose the listing 9 out of 10 times. I’m convinced that sellers can smell fear or disappointment the minute you walk into their house.
2. Not enough cash on hand. I don’t know who came up with the idea that every real estate agent has such a fat wallet they have to get custom tailored pants was, but they should be shot. Recruiters always sell the money as the main reason to get into real estate. Young agents, who may literally be starting with 0 in their bank accounts, don’t fully grasp what the cost of being in real estate during a “slow” period is. It can be months before you earn your first commission check, and it can be years before you can actually spend your commission check on something that doesn’t involve keeping your business going.
3. Not used to a commission sales job. People are generally raised on the idea that you go to work, and every 2 weeks or 14 days, you get a check. You then take that check and spend it on the things you need to survive. It doesn’t work that way in real estate sales. You may work for a month, two months, four months, and receive absolutely nothing. In fact, you will acquire expenses during that time you are working so you can actually be losing money while working.
4. Inability to budget for expenses. You’ve earned your first commission check. Great! Where are you going to spend it? If you are like a lot of agents, you blow it on clothes or electronics. The smart ones save their check for paying bills. Transportation expenses, license, office rents, and taxes are usually the bills that take the biggest chunk out of your check.
5. Poor follow up skills. “I’ll call you Thursday”. To some real estate agents, that means, you aren’t getting a call ever again. To great agents, it means you will call when you said you would. It can take years for a buyer to ultimately decide to buy a home. They may not even buy a home in the end. That doesn’t mean you shouldn’t do what you said you would do and follow up.
6. Inability to shake off bad events. This is a little different than #1. Here are some of the things that can happen on a daily basis as a real estate agent.
- House you are listing for sale has a buyer contract that falls through
- You lose out to an agent you just can’t stand on a listing
- Buyers who you’ve shown houses lose their jobs and can no longer qualify
- Repairs needed on a property cause the seller to turn on you rather than the buyer who made the request
- A software company raises subscription rates on a product that you can’t be without
When you combine a commission sales job stress with bad events, it can be very explosive. If you’re wired a certain way, you can shake bad events off and not have them ruin you. If you’re not that type, you need to find a different profession. Bad things are going to happen whether or not you are the ultimate cause of them. You need to pick yourself up and keep going.
7. Family pressure. Your spouse probably watches HGTV. He or she sees all the beautiful homes sold by the beautiful people and everyone is always so happy. They then wonder why you don’t sell the beautiful homes, and you’re not always happy. Then they see the bank account is not even close to where it needs to be to pay for the joys of daily life. Alternatively, there’s a great party on Saturday afternoon that they want you to go to. You can’t go because you need to show houses. Spouse goes to the event alone. This sort of stuff grinds on your family. If your family isn’t supportive, it is very difficult to live the life of a real estate agent.
8. Lack of focus. As a real estate agent, you set your own rules. That can be a disaster for someone who isn’t organized or a self starter. Buyers and sellers expect you to be professional at all times. Ditching them because there is a new episode of Dr. Who isn’t going to make you any money. There’s also a weird side industry in real estate. That is, every vendor has a new shiny thing that will allow you to make oodles of money if you just spend 5 to 10 thousand dollars with them. When that shiny new thing doesn’t work, it’s going to be your fault. The salesman who sold it to you has been gone from the company for months.
Selling of real estate full time is a job just like any other. There are good days and there are bad days. While someone in the corporate world might not work well with their boss, we have clients who can be difficult at times. You can make a difference in real estate. People will always want to work with you if you can show integrity and honesty on a daily basis. It’s up to you. One of the things about Deerwood Realty that make it special in our market is that we don’t recruit agents by telling them only things that they want to hear. We’ve found that agents who are attracted by shiny things at the start usually don’t stick around.