How many people do you know who have thought, “What should my next career move be? Maybe I’ll become a real estate agent!” It looks flashy and exciting… making huge commissions, creating your own schedule, and being your own boss. If you can make a few huge deals a year, you’ll be golden! You don’t even need a degree; you just need to complete an online education program and get your license on your own timeline. What could be easier? Right? Wrong.
Real estate isn’t for the faint of heart, but if you can enter into it with the appropriate expectations while avoiding common mistakes, then you won’t be a part of the huge proportion of agents that burn out in the first couple of years. If you can avoid the pitfalls, real estate can become an incredibly satisfying and lucrative career; however, you have to know what you are getting into and be willing to push forward.
The median income for brand-new agents is under $10,000 a year… lower than a minimum wage fast-food job. However, if you can keep your eye on the prize and do so with a solid foundation of skills, then once you have secured yourself into the career market, you will be able to clear six or even seven figures with ease. Talk with your mentor about what it was like for them at the beginning and get a feel for what the road ahead will be like.
Most Likely Reasons for Real Estate Agent Failure
These are some of the main reasons that agents throw in the towel. Knowing the possibilities and working toward the other end of the spectrum can prevent you from burning out.
Poor Budgeting for Marketing and Leads
Many careers have an area in which you need to spend money, but it can be frightening to watch your dollars going quickly out of your bank account without being replaced, especially if your nose is to the grindstone day in and day out. This is something you’ll need to address head-on as a real estate agent. The truth of the matter is that even the best agents who have been working the business for half of their lives have slow months with no closes and no profits. This is normal, but months like that don’t have to be the norm.
For many new agents, not having a plan can mean erratic spending whenever it seems like a lead is the “new possibility.” Erratic spending without a plan can mean even more losses.
Success Instead of Failure
Create a plan for your spending and how much you want to put toward lead generation each month. Your marketing budget should be something that you stick to. Don’t throw good money after bad month after month and grasp at straws.
If you are in the beginning stages of your career, try to not depend on this as your only form of income. Work with your spouse or partner (if you have one) to make a budget plan that allows for you to start this business without the pressure of making your own mortgage or car payment. Set aside a certain amount of your savings that you are willing to invest so that you can put money toward your business without feeling guilty about each withdrawal.
Poor Alignment of Lead Strategy with Personality
There are many different types of lead generation strategies, and oftentimes agents go with what they have seen others doing even if it doesn’t flow with who they are and how they communicate. There is value in pushing yourself outside of your comfort zone; however, in this instance, you should play to your strengths. When you are constantly trying to be someone you are not, it creates emotional exhaustion and you will never love your job.
Success Instead of Failure
You want people to remember you as standing out from the crowd. You also want to wake up loving your job as something you are passionate about that makes you feel good about adding to the world. When the needs of the world meet the passion of your heart, this is your vocation. Having your vocation be your daily work will keep you loving it and wanting to get after your goals each day.
Find out what personality type you have with a test such as the Meyers-Briggs or the DSCI scale. Then you can create your lead generation strategy based on who you know you are and how you communicate with others.
Create a mission, vision, and core value plan for your agency as an individual business. Then you can look back at this often to make sure you are on par with yourself. Quite honestly, money is only going to take you so far. You need to have a bigger reason for this type of work so that during the seasons where money isn’t flowing as freely, you are still finding joy.
Your mission statement should be the change you want to bring to the community in which you are working. Do you see things in the market or in other brokerage firms that make you frustrated or uncomfortable? Your mission statement should change this. Once you have your mission statement you can use it as your daily motivation. Having a mission statement that you can advertise to your clients, too, is a great way to gain people’s trust. Think about if you were the client, would you rather bring alongside someone who is only in it to make money or someone who truly wants to educate and/or bring comfort and safety to the community?
Your vision statement is an extension of the mission statement. This can be where you “shoot for the stars,” with an idea of what you want the world to look like if your agency achieves its goals. It should give everyone who works with you or for you a theoretical arrow to follow with regard to their focus and attention.
Your core values should also state the areas in your business that are important to you where you will not compromise. Your core values can be advertised along with your mission and vision statements so that people will feel good about choosing your business over others when they know that their values align with yours. Examples of core values for a brokerage firm could be honesty, education, professional communication, quality of work, efficient time management, win-win goals, collaboration and teamwork, and trust.
Unachievable and/or Soft Goals
In order to be successful, you need to have a vision for the future but you also need to know the negative possibilities of what could happen if you don’t. If you don’t have a specific goal it will be hard to feel successful. You also don’t want to set goals that are so high that you will constantly fall short, especially when you are only up against yourself.
Success Instead of Failure
Have a conversation with your mentor and write out your concrete vision and goals for your agency. Set specific goals for the first year, five years, and 10 years. Instead of soft subjective goals such as, “I want to do well,” be as specific as, “I want to sell 15 houses each year.”
Make a plan with tasks that you can check off each month and each year. When you can see your success on paper it will be easier to keep going when times are hard.
Poor Referral Foundation
Real estate is about a lot of things, and one of the most important is word of mouth or referrals. If you have to work harder every year to get leads, this is going to require more energy than you have, and you will get frustrated. This leads to burnout. Your business should be growing every year, which means that you will need a system that works for you instead of you working for it.
There will be small improvements to your business through the skills and insights that you gain with each year of experience; however, steady and true success is going to come from increasing the number of clients (and thus, closings) you have each year. With referrals, this number could increase exponentially.
Success Instead of Failure
Referrals aren’t luck of the draw. They come from you putting in the quality work to develop relationships, show your dependability, prove your creative skills, and gain clients’ trust. To continue receiving referrals, your sphere of influence should be strong and full of secure connections.
This is also a place where you can use an objective, strategic plan. Set up the exact tasks you will enact to create your referral network and keep it working for you.
Here are some ideas for creating quality referrals:
· Create engaging events for clients. Make sure that your events are exciting enough that the attendees keep talking about them afterward. You should spend between $500 and $1,000 and plan to spend a day on the event as well as time following up.
· Build an online presence and create community. A good investment amount for this could be between $3,000 and $6,000 a year depending on your market and what you have to work with. You should plan to spend about 3-5 hours a day helping people online. People don’t want to be spammed with ads, but rather, they want to feel that a relationship with you will add to their lives.
· Use market insights to stay at the forefront of your potential clients’ minds. The best thing about this option is that it is absolutely free and should only take about an hour a week. You need to show people that you are knowledgeable about the market as a whole and that you can help them be knowledgeable as well. People don’t want to depend on someone else for all their knowledge; they want to feel empowered to make good decisions and you can help them.
· Allow your prospects and referrals to cross-pollinate. Mail out postcards or flyers around the $100 to $500 range, depending on the area of your market. This should only take you a few hours a month and is incredibly powerful because referrals are one of the best passive ways to generate leads that can turn into profitable closing.
· Don’t be afraid to ask for referrals! Do it at the times your client is happiest with you or after a closing. This is also free and takes almost no extra time! People love to celebrate and want others in their life to feel as good as they do when something has gone well.
· Keep up relationships with authentic communication. This is another great free way to keep yourself in people’s minds without a huge time commitment. Tailor your messages to specific people and their specific needs and allow your databases to help you organize these conversations into groupings that take all the necessary things to remember off of your plate.
· Use a CRM to keep track of all your communication. Again, free! Setting up your CRM takes a couple of hours in the beginning but then should only require less than an hour’s worth of follow-up each week. You want to be consistently contacting people so that they remember you and that you are the first one they think of when someone in their lives needs an agent.
No Scaling for Lead Generation Spending
If you are willing to invest appropriately, then you can almost guarantee yourself success in real estate. However, if you are spending your investment budget on poor leads or spending erratically, you might be putting a lot of money toward ad space that isn’t hitting your target market and only bringing in a few leads, which will mean even fewer closing deals.
Success Instead of Failure
It’s quite possible that you can put money toward smart parts of a real estate business and that if you pair that with a solid work ethic, some personality charm, a talent for management, and a willingness to learn and adapt to the changing market trends, then you will be able to work without failure.
Figuring out how to scale your ad budget isn’t an exact science. It takes studying and trying different routes. Test them on the A/B scale and increase your spending where you see profitable leads coming in. Once you see where you are putting ads that are producing profits, you can trust that putting money behind these ads will turn your investment into profit, no matter the platform.
Putting ads on places such as Facebook doesn’t have to break the bank, but the amount you put in can vary from a few dollars to around a hundred. The quality of leads will be relative to the amount you spend, though! You can also hire professionals to do this work for you so that you aren’t adding undue stress in an area that is outside of your expertise.
Concentrating on the Wrong Brokerage and/or Farm Area
Any agent who has been around the block a time or two can tell you a story about how they worked for a horrible broker or when they spent so much time working an area that they then realized was saturated or dead. If you are stuck inside a firm that does their work dishonestly or unprofessionally, it can make the situation even worse.
When you are miserable in your area, getting up and going to work can seem like the hardest thing in the world. Then you aren’t bringing a positive, can-do energy to your communications with leads and clients, and the vicious cycle can be hard to get out of.
Set Boundaries with New Firms
Set a time goal to try out a firm. If, after this time frame you are still unhappy or you have not seen an improvement in the culture, feel free to leave. There are plenty of brokerages who need agents and who will take you on with open arms. Don’t continue to waste your strengths and skills on people who don’t appreciate you.
Study the market yourself, and if you are in an area that is over-saturated or dying, get out fast. There are plenty of areas that are up and coming and if you can find success there, the referrals that come exponentially will shoot you into a successful arc that brings plenty of confidence.
Poor Time Management
Remember how we said that many people get into real estate thinking that they’ll be able to make their own schedule? If you have been in the business for any amount of time you know that this is not at all true. Your weekends are constantly full of showings and appointments, and you feel at the mercy of the email or phone ding so that you never miss a potential lead or conversation.
If you are working with higher-end clients (which is the goal of many agents, since high-end listings bring high-end commissions), they are likely to be incredibly demanding and expect you to be at their beck and call. This is emotionally exhausting and can also frustrate your personal life and relationships outside of work.
Success Instead of Failure
Here is another place where a concrete plan will be your best friend. What are your priorities and how can you block out your time for those? Make categories and put your tasks into those categories, then stick to your calendar.
Everyone who is buying or selling a home needs a real estate agent, it’s that simple. You want to be in the right place at the right time, but you also want to put your time, money, and energy into making sure that people choose you over others because you stand from the competition. Be authentic and be successful with these tips.