Starting a career in real estate can be an exciting and lucrative venture. However, new agents need to be aware of the common challenges they may encounter along the way.
Historically, around 87% of real estate agents failed within the first five years of starting their careers. Between 2020 and 2022, that number dropped to approximately 43-54%. However, both of these stats tell us one thing:
Agents fail at a staggering rate if they’re unequipped to take on the job.
If you’re an aspiring agent, don’t let these statistics deter you from seeking a career in real estate. In this blog post, we’ll explore ten common reasons real estate agents fail and solutions for these problems.
1. Insufficient Income
Real estate agents typically work on a commission basis, which means they may not earn anything for several months after starting. Some agents may go six months or longer before seeing their first commission check.
Not realizing how long it takes to turn a profit, agents may fail to create a financial plan to support themselves until the business becomes a little more steady.
Before diving into a real estate career, build a cushion of savings to get you through those first few months.
Or, you may want to start pursuing real estate part-time while working another full-time job until you’ve gained enough traction to do real estate full-time. Side hustles can also be an effective way to supplement your income until you have a network of clients.
2. Ineffective or Outdated Marketing and Prospecting Methods
Particularly in the climate that we’re seeing today (high interest rates, low inventory), new agents often find it difficult to compete with more experienced agents and secure clients.
Many new agents rely on more experienced agents' marketing methods (e.g., social media, canvassing entire neighborhoods with flyers and postcards, door knocking, etc.). While these can be effective marketing methods depending on the demographic of your region, they may also be outdated and ineffective for you.
Plus, these methods may have worked historically for your mentor or more experienced peers because of the market they started working in.
When the market changes, you must change your marketing and lead generation methods to work in it.
A few years ago, agents had clients coming to them in droves, anxious to list or buy. Today, more homeowners are holding onto their properties with lower interest rates, causing inventory to be low. Rather than targeting the average homeowner or waiting for new clients to come to you, you need to be proactive and find motivated sellers.
Regardless of the market, certain homeowners will always need to sell due to financial strain, major life changes, etc., that make maintaining their homes impossible. Many of these homeowners are hiding in your community, waiting for an agent to help them out of their challenging situation. So, if you can find them, you can create a steady stream of leads for yourself.
Pro Tip: PropStream offers 19 Quick Lists to help you easily find motivated sellers in your community (e.g., pre-foreclosure, divorce, bankruptcy, etc.).
3. Poor Time Management Skills
While the freedom to be your own boss can be a massive motivator for agents to enter the profession, it can also be a burden if you’re not accountable.
Since nobody tells agents how they must spend their time, getting sidetracked or taking frequent breaks and days off can be easy. However, wasting too much time risks missing opportunities or leaving clients dissatisfied if you’re not communicating promptly.
There are several ways agents can plan their time more effectively, like:
- Setting Clear Goals and Priorities: These can be determined daily, weekly, or monthly to help you stay organized. Underline which goals you want to achieve and identify the most critical tasks that will help you achieve those goals.
- Use a Planner or Calendar: Once you’ve set goals, you must complete the necessary tasks to achieve them. A planner or calendar in which you document your tasks for the day, week, etc., can be a vital tool.
- Practice Time Blocking: Time blocking is simply dividing up your time for specific categories of tasks (e.g., cold calling, attending showings, filming videos for social, etc.). Rather than having an extensive, jumbled to-do list that overwhelms you and causes you to procrastinate, time blocking allows you to shift your focus depending on the type of task you need to complete.
- Limit Distractions: Minimize distractions by setting specific periods for checking emails and social media. Additionally, consider using website blockers or apps that temporarily restrict access to distracting websites during work hours.
- Perform a Time Audit: If you consistently fall short of your goals, perform a time audit. A time audit entails documenting your daily schedule and identifying areas where you could cut down on wasted time.
- Automate Repetitive Processes: Use technology to automate repetitive tasks. Real estate CRM (Customer Relationship Management) software can help manage leads, follow-ups, and email communication. Automation reduces manual work and minimizes errors.
Psst! With PropStream’s List Automator, you can have updates regarding your leads sent straight to your inbox!
4. Lack of Realistic Expectations
Some new agents have unrealistic expectations about the income they can earn or the time it takes to establish a successful career in real estate.
They may become discouraged and give up when reality falls short of their expectations.
New agents must have realistic expectations of what they will achieve during the infancy of their careers. To help manage expectations, new agents may consider working with a mentor who can help them stay grounded and motivated while offering advice from experience.
Additionally, new agents should research the average performance of real estate agents in their region, particularly those new to their careers. For example, if you’re following a real estate influencer who works in Los Angeles, CA, and you work in a small town in Missouri, your income expectations may be skewed.
Lastly, set realistic goals rather than trying to do everything right out of the gate. For example, in your first week, you may want to set a goal of finding a niche to begin farming within and then finding 100 leads within the niche. Or, set a goal of studying historical trends and uncovering the most desirable neighborhoods around you.
Rather than expecting to close a transaction in the first month, your time may be better spent researching, creating lead lists, seeking mentorship, etc., to set yourself up for success when you’re ready for that first transaction.
5. Poor Communication Skills
Real estate agents need strong communication skills to interact with clients, negotiate deals, and resolve conflicts.
If an aspiring agent isn’t responsive to their clients, lacks sensitivity, or struggles to comprehend their preferences, the client may choose another agent to handle their transaction.
Even if you don’t consider yourself the best communicator, you can always polish your communication skills.
One huge advantage as an agent is having the ability to listen actively. As clients tell you their concerns, preferences, and reasonings, they’ll want to know that you’re listening intently and absorbing the information as you guide their transaction. Consider taking an active listening course online.
Additionally, if you’re working with a mentor, ask if you can shadow a closing, meeting, or showing to see how they communicate with their clients. Note positive interactions and what contributed to those. Or, if a misunderstanding happened and there was a negative interaction, note what caused it and how you can avoid it.
6. Inadequate Market Knowledge
Homeowners turn to real estate agents to buy or sell a home because they expect their agents to have a much deeper understanding of the current market than they do.
Rather than learning all of this information themselves, they would rather offer an agent commission to feel more confident in their transaction. However, newer agents may fail to study their market and educate themselves on the current trends, like pricing for a particular neighborhood, inventory levels, HOA (Homeowners Association) requirements/fees, etc.
Without this knowledge, agents are disadvantaged in negotiating the best deals for their clients and accurately pricing a property, potentially causing them to lose money.
Luckily, there’s a simple solution for this predicament: Real estate data!
By studying real estate data, new agents can learn everything they need to know about their market, like:
- Historic pricing trends (growth, declines in home values)
- Comparables (comps)
- Average rent for a region
- Average ownership length
- MLS stats
Uncovering this information is crucial for helping homeowners price their property if you’re listing it. When working with a buyer, having a solid understanding of your market and comparable properties can help you negotiate a fair offer so they don’t overpay.
|Pro Tip: With PropStream, you can use the Draw Tool and Heat Map to study trends for a broad or concentrated area before adding relevant leads to organized marketing lists!|
7. Difficulty Handling Rejection and Client Criticism
Rejection is a standard part of the real estate business, as not all deals will close, and not all potential clients will choose to close with an agent.
New agents struggling to handle rejection may become discouraged and give up prematurely. Agents who get combative when faced with conflict may create an unfavorable reputation for themselves, making it harder to find future clients.
Constructive criticism can help you grow and improve, while handling negative feedback gracefully can maintain your professional reputation.
Here are some ways to deal with criticism as a real estate agent:
- Stay Calm and Professional: When receiving criticism, remain calm and composed and avoid getting defensive or emotional, as it can escalate the situation.
- Don't Take It Personally: Remember that criticism is often about the transaction or situation, not you personally. Try to develop a thick skin by separating your professional identity from your personal one.
- Reflect and Learn: Take the criticism as an opportunity to learn and improve your skills and services. Consider whether there is any validity to the feedback and how you can use it to enhance your performance.
- Build a Support System: Surround yourself with a network of supportive colleagues and mentors who can provide guidance and encouragement during challenging times.
- Practice Resilience: Realize that not all criticism is fair or warranted. Some clients or individuals may have unrealistic expectations or personal issues that influence their feedback.
8. Lack of Support and Mentorship
New agents without access to experienced mentors or a supportive brokerage may find it challenging to navigate the complexities of the real estate industry.
With many complications that can arise during a real estate transaction, new agents may need to observe other pros to prepare themselves for the unexpected. Without exposure to various situations, agents may be unequipped to deal with trying circumstances, causing them to walk away after traumatizing mishaps.
Clearly identify goals and use that to guide you to an appropriate mentor.
An excellent place to start looking for mentorship is within the brokerage you’re associated with. Not only are these agents more accessible, but they will likely have insight into your local market.
Additionally, you can attend real estate conferences and seminars to learn from other professionals. This is an excellent opportunity to listen to seasoned agents' speeches and make new connections.
9. Overextending Geographic Coverage
New agents sometimes attempt to cover a wide geographic area to increase their potential client base.
However, spreading yourself too thin can have the opposite impact and result in inefficiency and difficulty in establishing a strong local presence. If an agent tries to work with clients too far away, they may struggle to set up showings at a moment’s notice, causing them to miss out on client opportunities.
Carve out a region you feel comfortable tackling as a new agent within your community. This may be a specific neighborhood or zip code. Start farming within that region to learn as much as possible before building your lists with relevant leads.
As you gain more experience, you may widen your reach gradually. However, avoid widening your coverage so much that you can’t successfully meet client expectations.
10. Poor Client Management
Building and maintaining client relationships is critical for repeat business and referrals.
Agents new to working with clients may neglect the importance of responding promptly, making themselves available for showings, and personalizing the experience for each homeowner. If several clients have negative reviews for an agent, word can quickly spread in their community and hinder their ability to find new opportunities.
First and foremost, avoid biting off more than you can chew.
Try to stick with 1-2 clients at a time so you can give them your undivided attention until you become more accustomed to the moving parts of a real estate transaction. Also, ensure you cater each experience to individual homeowners and keep their preferences in mind. The last thing you want to do is mix up your clients and send a property to the wrong party, making them feel they’re just another number to you.
Get Your Real Estate Career Off the Ground With 50 Free Leads!
Embarking on a career in real estate can be a rewarding journey filled with endless opportunities for growth and success.
However, real estate is a dynamic field, and the ability to learn, adapt, and continually improve is essential for long-term success. Seek mentorship, stay connected with industry peers, and remain committed to honing your skills.
If you’re ready to jump-start your real estate career, PropStream has the robust datasets and marketing tools you need to find high-quality leads and reach out in one convenient location!
With our platform, you can:
- Study local neighborhoods to identify the hottest markets
- Run comparables to accurately price properties based on what similar properties have sold for recently
- Filter your search for specific homeowner types and situations to identify listing leads (e.g., pre-foreclosure, divorce, pre-probate, etc.)
- Save leads to specific marketing lists before collecting contact information via skip tracing
- Send postcards and email campaigns
And so much more!
Activate your 7-day free trial today to see why agents rave about PropStream and enjoy 50 complimentary leads.
|Psst! Want to learn more about using PropStream as a real estate agent? Class is in session in the Academy! Take our free course: Lead Strategies for the Modern Agent.|