According to recent reports from the National Association of Realtors, new real estate agents do not fare well.
The 2018 NAR member survey reported that Realtors with less than two years of experience had a net income of only $7,350. This was actually a slight increase from the prior year. It’s no wonder then that some industry experts say nearly 90 percent of new real estate agents are out of the business within two years.
My experience as a new agent was completely different. In my rookie year I sold over $22 million dollars in volume and had a net income in excess of $350,000. Since then I have watched new real estate agents come and go year after year. I have also seen and learned from new real estate agents that have succeeded. The agents that struggle or get out of the business usually make one or more of the following five mistakes.
1. Trying Everything
If you try to be everything to everybody you will end up not being anything to anybody. It is so easy in the real estate industry to get spread a mile wide and an inch deep. Unfortunately, if you do that it is likely that none of your efforts will work. My super quick success really came from narrowing my focus to only a few things. I had a small target market and grew it from its original core by devoting all of my time, energy and resources into crushing it. When you concentrate your energy into one focal point you simply have a bigger chance at making an impact. So pick your focus and do not take your eyes off it.
2. Not Creating a Unique Value Proposition
If you do not have a unique value proposition, it is hard to stand out in the crowd – and the real estate industry is a very crowded field. After you decide what you are going to focus on, make sure you figure out how you will offer value to your target market. Do you know the area better than others? Do you have access to channel accounts that will help you? Can your marketing deliver better results? Are you going to give more personal attention throughout the transaction than the more established agents? What are you going to do for your clients to create value that other real estate agents cannot match? Figure this out early.
3. Only Focusing on Family, Friends & Sphere of Influence (SOI)
Many people teach new agents to focus on their SOI. While I do not think you should neglect it, I think it is better to have a primary focus other than your SOI. Your friends and family know that you are starting out in real estate. They know you are just transitioning from another career or whatever you were doing before. This presents a problem in that they specifically know you as not being a real estate agent.
Your S.O.I. should be supplementary, not your primary business.
This realization will make it easier to select a target market that has zero history with you when starting out. The other problem with SOI clients is they tend to live in different areas and have different backgrounds. This makes it harder to leverage one success to the next, as your SOI transactions probably do not have as much in common as the transactions that would come from tightly segmented group that you picked.
4. Having a Rookie Mindset
Too many new agents make the mistake of thinking like new agents. You need to think and act like you have had success before. If you do not, your potential clients will sense it. Go into your listing appointments thinking you will win and with the mindset that you will not walk out with a loss. Early on in my career, I initially lost out on a $1M+ listing that was in an area dominated by an agent with over a decade of experience. I refused to take no for an answer, even after the seller came to my office to turn me down. I got the listing and eventually took over the neighborhood. (You can read more about this in my book.) Mindset is everything.
5. Giving Up Too Quickly
Too many agents give up too quickly. This is true with respect to marketing and prospecting programs, as well as their careers in general. Many times in real estate it will take six months before you start to see results. If you give up at the five month mark, you are like a gold miner that digs thousands of feet only to throw in the towel a few feet from the reward. I am not saying you should never go in a different direction, but you do need to give things time to work. You never know which hit is going to cause the wall to crumble and give you the breakthrough that is so close.
The 90/10 Rule: Do What It Takes To Be In The Top Ten
Ten percent of all real estate agents do about 90 percent of all real estate transactions. While this may seem daunting, it is not as challenging as it looks. You just need a little direction – you can use my books below to help guide you. Avoid the five mistakes above and your odds of success will go up a ton.
What else have you seen work or not work for new real estate agents?