In this teaching video, Tom Ferry talks about the top 10 reasons people fail as real estate agents. Plus, Tom reveals not only why people fail in this industry, but also what they can do to change their course.
Tom has spent 29 years as a real estate agent. During this time he has seen the most senior agents bring others into the field, he has seen managers and owners recruit new professionals in mass, as a result, he noticed that there were 10 reasons why so many people fail in their career as a real estate agent.
1. Interested But Not Committed
As we explore this topic, the number one reason people fail in the real estate profession is that they have an interest but they have no commitment.
Real estate is not typically a profession that you jump into right out of college or high school. Most people that enter this profession do it as a 3rd or even 4th career move. Many times, prospective agents decide to get into the real estate industry because they have failed many times in their previous profession so they feel real estate may be their opportunity to strike it rich.
The problem is, most of them are just interested in finding success, interested in doing what it takes to succeed, interested in being the type of agent that can win big. However, we all know that just being interested is not going to cut it. There is a huge difference between being interested and being committed. It’s all about mindset.
Difference Between Interest And Commitment
Committed people have a willingness to do whatever it takes to succeed no matter what comes along and for as long as it takes. This type of person creates the time they need to make calls, works long hours if needed, and is willing to do whatever it takes even if it inconveniences them.
Interested people do things when it’s convenient. They say “I will learn the script when it’s convenient”, “I will make my calls when it is convenient”, “I will create my plan when it’s convenient”.
2. Not Being Strategic
Another reason people fail as a real estate professional is they’re not strategic.
Meeting with agents every day, we always start talking about planning, or we discuss their market, and even about growing their business.
In these conversations, I will say “Tell me how you look at your market”, are you being strategic”?
I ask them things like, “do you look at the hot sheets each day?”. “Do you know about every single listing, pending sales, any properties that have price amendments or reductions?”. “Are you paying close attention to the strategic price trends in your market?” “Can you strategically discuss with buyers and sellers about the information and data about your market?”
Are you aware that two story homes are not selling but bungalows are selling great? Are you aware that condos are not selling but residential single family homes are selling?
This is a big reason that people tend to fail at real estate. These types of people like houses and like people, but they never figure out where they fit in or how they can provide the greatest value to the market.
Most people do not think strategically about how they can have the greatest impact in real estate. They enter the field with a mindset of “whatever happens, happens” rather than develop a plan.
3. Fear Of Making Mistakes And Wanting To Look Good
It’s easy to understand. People want to look good to others. You see the look of real estate professionals, the way they conduct themselves and you may think they never make mistakes. They seem so business like and assured of themselves.
The fact is, to be successful in any endeavor, you’re going to make mistakes. If you sit down and talk with any successful real estate professional, they will tell you about all the times they made mistakes as they started their career. They will tell you about the time they forgot to follow up with a client, the time they forgot to put a CTA on a piece of direct mail, or placing an ad and not putting a phone number in the ad.
Veteran real estate agents will tell you how they made mistake after mistake as they learned the industry.
You learn the real estate business by making mistakes. So don’t be afraid to make mistakes as it’s the only way you will learn the lessons you need to know to make you great.
4. No Role Model Or Wrong Role Models
You’ve heard the old adage, the people you spend the most time with, this will shape who you are. It will shape how you think. The same is true for real estate. The income we make is in direct correlation to the people we spend the most time with.
If you’re a brand new agent and you only hang out with other brand new agents, this is not good. You become like those who you spend the most time with. If you spend your time with other agents who are new or not having any success, this will rub off on you.
You need to find others in the field that you respect and make them your role model. Find those who are selling and making money. Find those who are not just successful financially but also in the way they manage their whole life.
The biggest mistake that many people make is they have no role model at all so they get stuck in the middle of all other agents around them.
Find successful agents and learn everything they know. Duplicate what they do, how they think, how they talk, how they plan, and how they market. Learn everything that they do that makes them a success. This doesn’t mean you become a clone because you still need to be yourself, but you do replicate the things that work and cause success.
5. Don’t Bring In Enough Clients
If you want to guarantee failure as a real estate professional, do what everyone else is doing. Don’t market, don’t do lead generation, say prospecting is bad, you hate rejection etc… If this sounds like you, one thing is certain, you will have slow but sure death as a real estate agent.
On the other hand, if you get the mindset that you’re in sales and marketing, understand that you MUST attract customers, and realize that there is no wrong way to do it, you will begin to attract customers.
I would encourage you to focus on what I call the “core four”:
- Your database: Your friends, people you know that trust you
- Open houses: This gives you the chance to interact with new sellers and neighbors everyday and can dramatically increase your business.
- Geographic Farming: Find a neighborhood where the turnover is 5% to 7% and then become the knowledge broker or top agent in that area.
- Go Online: Do video, use social media, advertise on Trulia, Realtor, Ziilow and all over the web. Make sure your online presence is attracting buyers and sellers.
You will not fail in real estate by having too many listing appointments, or too many buyers, it’s the opposite of this. You can only succeed through continual marketing and lead generation. You will not succeed doing this one hour per week.
6. Monday-Friday, 9 to 5 Job Mentality
As we said earlier, many people come into real estate as a second, third or even fourth career move. Most of these people are used to working Monday through Friday, 9 to 5 and working 40 hours per week. By Friday, people working in a traditional job are exhausted and simply want to relax on Saturday and Sunday.
If this is you, it’s time to change your mindset if you’re going to succeed as a real estate agent.
Real estate agents know that money is made before 9:00 and after 5:00 pm. They also know that money is made on Saturday and Sunday.
So if you’re going to make the decision to find success in this industry, you will need to stop thinking of this as a job and think of this as your business. You will get into this what you put into it and nothing more. If you work real estate with a job mentality you will not succeed.
Remember, in real estate money is made before 9:00 am and after 5:00 pm and on weekends.
7. No Swagger As A Salesperson
Decades ago, the National Association of Realtors did a study and found that most people that came into the real estate field had no sales experience, no negotiating skills, and zero marketing experience. The problem is, these are the most crucial skills as a real estate professional.
People in this category fail because they have no idea what to say. They fail because they let fear of rejection stop them from interacting with potential buyers or from making phone calls.
If you truly want to succeed in this profession, put yourself in the absolute more difficult selling scenarios and do this over and over. Learn all of the possible objections. Learn to handle the objections and rejections. Be willing to get hung up on. Doing this will teach you everything you need to know to develop the sales and marketing skills you will need as an agent.
The most challenging customers will help you become a real estate agent who has swagger.
8. No Goals Including Numbers To Reach Goals
As discussed above, many people enter the real estate industry because they’re interested but really have no commitment.
A committed person is going to develop and write down their goals. Not only that, they’re going to reverse engineer what it takes to reach that goal. To reach a goal you need to know the numbers to reach that goal.
For example, if you want to sell 18 homes and you know it takes contacting forty to sixty people to generate one sale, then by reverse engineering you know you need to talk to eighteen times forty or sixty which means you need to talk to 720 to 1,080 people to make 18 sales.
However, as you work through this process, you may find the numbers are much better than this and you need to contact less than 40 to 60 people.
The key is, you need to know the numbers to reach your goal or you will never hit it. Track and measure everything you do so you know what it takes to reach your goals.
9. Weak Routines And Poor Scheduling
Remember, as we talked about previously, as a real estate professional you’re not working a 9 to 5 Monday through Friday job. Real estate agents have a lot of freedom. And with this freedom what do you think most people do. NOTHING! This is now your business. As Tom Ferry says, “show me your schedule and routines, and I can predict your future”.
If your goal is to sell 18 homes but your routines and schedule are those of someone who sells 3 houses a year, you’re not going to reach your goal. Whatever your schedule and routines are is where you’re going to end up.
You need to track your numbers every day. Make sure that your schedule and routines are lined up with where you want to go.
You need to develop discipline. And if you have no disciplines and struggle with this, you’re not going to succeed as a real estate professional.
10. No Skills At Managing Finances
Real estate is building your own business. Don’t be surprised that it’s going to take money to build this business.
Many new agents come into real estate and think that they’re going to get big fat checks without having any expenses. That simply is not true.
What if your broker told you that you’re going to need $100,000 in the bank, set aside 6 months of your total cost of living in an account so even if you don’t sell a home in 6 months you’re going to be okay.
The reality is, you need much more than this. You are going to need money to actually build your business. You are going to need things like:
- Plus other things…
And all this costs money!
Maybe you thought you could get into real estate and make money without expense but this is not true. You are going to have many expenses and you need to plan for this.
Real estate is a very competitive field. Many people fail because they have poor financial management skills and run out of money or make bad investments or things pop up they were not prepared for.
Maybe after hearing this you decide that this career isn’t for you. That’s fine. It’s better to know what it takes so you can succeed than to fool yourself and waste your time in a career that’s not for you.
However, if after reading this and watching the video you feel you’re ready to do what it takes, then it’s time for you to get started!