Helping Real Estate Agents Podcast 2/24/22
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Hello everybody. This is Tanya Eldert and this is the Helping Real Estate Agent Podcast.
And today I’m going to go over a subject that is near and dear to me, why agents fail.
The first thing I even noticed was how much more difficult it was then I expected. And over the years that I have been an agent, a broker, and instructor, everything that I’ve done in the real estate realm, I’ve noticed a huge dropout rate.
Over the years, I’ve also tried to look at some of the reasons why. I think training is a portion of it, which is one reason why I’m so passionate about creating training programs and helping agents.
However, there are two others, and I think they are actually even more important than training. I’m going to have those two main reasons lumped into two categories:
The first one is unrealistic expectations. So many people get into real estate because either one, they like to watch HGTV. Which let me inform you, there is not much real about that reality TV, and it certainly doesn’t show you how those agents came upon the buyers that they’re working with.
And two, the other reason that people jump into real estate is they bought a house and it seemed so easy to do because of course they were the buyer, they worked with an agent they didn’t have to find themselves. They thought “this was really simple. I can make the kind of money that my agent made. Let me go ahead and do this.”
Those are two very common reasons that people get into real estate without understanding the reality, because the unrealistic expectations really do contribute to whether somebody is successful or not in this business. And when I talked successful right now, the last statistic I saw is 87% of real estate agents will be out of business in less than five years.
I think a lot of that is actually two years when the renewal comes up, but realtor.com had that on there, I think in 2021, and that statistic was for five years, so it’s not a business that people stay in forever. And of course me being in it, as long as I have means I’m in the top 17%.
So let’s talk about those unrealistic expectations for a moment.
The first one is motivation. If you are used to a nine to five job where you punch a clock and somebody tells you what to do, you are going to be in for a big surprise when you are now self-employed and have to self-motivate and you don’t have a broker or a team leader, or basically anyone except for your family who cares, whether you get up in the morning and jump into it.
I remember having a discussion a couple of years back with an agent who came to me and asked me for some coaching and some help, and I tried to get into specifics.
So we were having lunch together and she said to me, “Tanya, I just need someone who will tell me to turn off the TV and get off the couch during the day.”
And I thought, “Okay, well, here you go. Turn off the TV and get off the couch because you are not going to make any money that way.”
But for a lot of people who are juggling many things to do with the family they have, they come up with dozens and dozens of excuses why they can’t work on their business at that point.
And that comes from self motivation and working on your business, not just in your business. And we do a lot of coaching and training for that, but I think that is one of the top reasons for failure.
The other one is that they unrealistically thought they were going to jump in and have a sale right away.
Well, many buyers and sellers take months and months to not only find them, but to nurture them, find them a house, and get to close. And numerous times, more agents than not, take three to six months to get their first closing.
So that means if they didn’t have enough savings for I suggest six months, or a source of income that is going to cover their first six months of bills while they’re working on real estate, then they are going to go back to work because they can’t eat, they can’t turn on the electric. That’s another huge, huge one.
And the unrealistic expectation was flexibility. Everybody thinks it’s a flexible kind of job.
Well, it can be in a way, especially once you get up and rolling and you have your business established, but if you want full-time income with real estate and you are in the business, you’re going to have to hop to it every time a buyer wants to see a house.
And that doesn’t matter if it’s 10:00 AM on a Tuesday. If it’s four o’clock when something just hit the market on a Friday, or usually working every weekend and many evenings.
So people don’t realize that they could be up at 10 o’clock at night writing offers. And I hear that all the time. So people don’t realize that to work with buyers especially, you have to be able to jump on the go.
So what’s the unrealistic expectation that people have? Well, in my opinion, that it’s primarily marketing.
I found this quote from an article, it said “Most real estate agents fail in their first year. According to research, three common mistakes they make are inadequate prospecting, failing to market properties in a way that leads to a fast sale or not following up with clients.”
Now let’s look at those three. What are they? Marketing, marketing, marketing. That’s what it is.
This is a type of marketing job. Failing to find an adequate number of prospects. That’s your leads, that’s your funnel. That’s working with customers failing to market the properties.
A lot of people, even in today’s market seem to think “if I just stick a sign in the yard it’ll happen” and it doesn’t work that way, especially for those of us who are really in the business.
And the other one is not following up with their current and past clients.
So what’s your take away on this?
Well, if you’re going to get into the real estate industry as an agent, please understand that unless you’re working with a team who’s going to handle that marketing and hand you the leads – and just an FYI, they tend to be a little particular who they bring on – unless you’re working with somebody who’s going to do that portion for you, that it is your job to do that marketing.
And if it’s not something that you’re strong in, then you need to find a way to get it done for you. You need to figure out what’s going to work for you to build your business, because it is YOUR business.
I know you are an agent for a broker, but there are not that many brokers out there that are going to do your marketing and your lead generation and handle all those tools for you. And if they do, they’re taking a higher split because they are paying the money to take all that effort.
So you can’t have your cake and eat it too, or whatever that saying is. At the end of the day, you’re going to have a bigger split for somebody to do this for you. Or if you want to get more money with each commission, you’re going to have to figure out a way to do it.
I hope everybody learned a little bit from today.
I hope that there’s a great takeaway here and that you just go into the real estate business with your eyes open.
Thank you, and have a wonderful day.