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5 Reasons Agents Don't Make It Past Their First Year in Real Estate

May 25 2020

hdc 5 reasons agents dont make it past their first yearReal estate is a great field to work in. You have the freedom of being your own boss, setting your own hours, and choosing who you work with. However, there's an extraordinarily high turnover rate for first year real estate agents. Here are some of the biggest reasons real estate agents fail and how to avoid them.

Lacks of funds.

The vast majority of real estate agents only get paid after closing a deal. That means you have to have enough cash saved up before launching your real estate career to keep your personal and business expenses funded until you gain enough momentum to fund everything through your business. According to NAR's 2019 Member Profile, 54 percent of members with two years or less experience made less than $10,000 in 2018. Realtors® who make it past the two-year mark had a median income of $41,800 in 2018.

Not enough leads.

It's a sad fact that not every lead converts, but once you get more established in the business, you get a feel for how many leads you need to get from each of your sources to get to a closed transaction. At its root, lead generation is a numbers game. You can't grow or maintain a real estate business without effective lead sources. Invest in a variety of lead sources to figure out which ones will be best for your business, and don't be afraid to think outside the box when looking for leads.

Poor lead followup/nurturing.

Just having a steady stream of incoming leads isn't enough to ensure you're closing sales. Your leads may need more follow-up before they're ready to buy or sell. Many prospective buyers and sellers reach out to an agent when they're still six months to a year (or more) away from actually buying or selling a home. That doesn't mean they're a bad lead. It just means they'll need guidance and consistent follow through to help them get from the research phase to a position where they're ready to transact. Enroll leads such as these into an applicable drip email campaign for an easy way to provide them with useful information and stay top of mind. You'll also want to add a reminder to reach out to them via phone every so often so once they are ready, they'll know who to turn to.

Poor planning.

When you decide to become a real estate agent, you aren't just choosing a new job, you're deciding to start a business. Be sure to come up with a business plan, elevator pitch, goals, and systems to track expenses, leads, and the progress you're making. has free lead management tools for real estate agents and your broker will likely have tools and systems you can use as well.

Budgeting problems.

Real estate isn't a career where you can put in the same level of effort day after day and expect a consistent paycheck every two weeks. You may find yourself closing one deal after another one month and then go two, three, or even more months without closing on a single listing. It's easy to fall into the pitfall of thinking that success this month means success next month and treat yourself with your commission check. Instead, set a monthly allowance for yourself that will cover your bills and necessities, as well as a small allowance for fun and other expenses. That way, your good month now can fund potential dry spells you may face in the future.

While there are a lot of reasons businesses fail, is dedicated to helping you succeed. For the latest real estate and business strategies, check out the Secrets of Top Selling Agents webinars, podcasts, and live events. Learn more at

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