Being a real estate agent can be a lucrative gig. Top real estate agents can make over $1 million per year.
But according to the National Association of Realtors (NAR), only 13% of real estate agents make it past their first five years. Most wash out before making any serious money.
So why do 87% of new real estate agents never make it? Here are the top reasons:
- They’re in it for the wrong reasons
A lot of people decide to become a real estate agent because they want to make a lot of money fast. After all, it only takes a few months to take an online course and get your agent license.
But it also takes a while to master the trade. That’s why the average salary for realtors in the US is $43,522.
So even though you can get started fast, don’t expect to be making six figures right away. You have to love helping people and networking. If you don’t or you’re only in it for money, you won’t survive long.
- They don’t have a business plan
Being a real estate agent means running your own business. The amount of money you make is tied directly to how many deals you close.
So it’s important to have a written business plan that outlines your goals and acts as a roadmap. You can easily start a business plan with a free online template.
- They don’t know how to network
Being a real estate agent is all about connecting home buyers with sellers. That means you’re paid to be in the know. Networking is the name of the game.
If you don’t like people or you’re difficult to work with, it’s near impossible to make it in real estate. Successful agents are always networking, leveraging social media, and getting out of their comfort zone.
- They don’t know how to market themselves
As a real estate agent, you’re in a competitive market. There are over 3 million active real estate licenses in the US. To stand out, you need to know how to market yourself. Doing this requires having an online presence and, above all, showing that you provide value.
More and more home buyers shop for houses on sites like Zillow. So you need to position yourself as an expert who can help buyers beyond what they can do on their own. Focus on being helpful.
- They don’t know how to generate regular leads
A lot of real estate agents get tired of hustling for leads. Asking for referrals and making cold calls is hard, especially when you face a lot of rejection.
To avoid burning out, you need to establish a referral system that’s repeatable and scalable. Automate as much as possible instead of relying on sheer grit. That’s the only way to generate enough leads to sustain you long term.
- They are bad at managing money
When you’re a real estate agent, you don’t get a regular salary. Instead, you get paid on commission when you help close a deal. That means your pay will be sporadic—some months you’ll make a lot, and others you won’t make anything.
As a result, you have to budget your income wisely to make sure you have enough money from month to month. And when you’re just starting out, it’s best to have plenty of savings to support yourself.
- They don’t work hard enough
Finally, many real estate agents never make it simply because they don’t work hard enough. Perhaps they don’t regularly follow up with clients for repeat business. Or they give up too early on a networking event.
To be a successful real estate agent, you need to show up every day, even if you don’t see immediate results.
Now, you might think becoming a real estate agent is too hard or risky. But the high fallout rate also means there’s plenty of opportunity for you to set yourself apart.
If you work hard and have a little patience, there’s no reason you can’t make it big. Remember, whenever there’s high risk, there’s also high reward.