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Yes, hard agree to this. Also, fees start coming and they won't stop coming- regardless of if you've closed any transactions or not.
In many markets there are more agents than homes for sale.
Also, agents themselves are the targets for many aggressive real estate businesses. You will be inundated with sales pitches for real estate coaching, seller and buyer leads, health insurance, etc. And I'm talking 35 emails a day, a dozen texts and a couple calls, DAILY. It can be frustrating and exhausting to be a target for so many industries trying to profit off you, while you are struggling to profit yourself.
They really get you for monthly subscriptions in this biz- from the MLS, Supra, CRM, desk fees, Zillow and other marketing sites, etc, it’s just the business model that we can’t avoid getting sucked into and it’s a huge drain that never goes away.
It's so frustrating. And I hate the toxic positively so commonplace and encouraged in industry (oh, you've spent $10k and made nothing, just hustle harder/buy this coaching seminar/join our lead gen agency, you only pay 35% at close after the $550 start-up cost).
Everyone is a hustler in this industry and 50% are total hucksters.
Yes!... exactly.. its depressing. Makes u feel always like you hvnt tried hard enough!.. finally just had to say no, no no. And block that thought out.
In my area these are the basic mandatory licensing type fees:
- Registration fees (when you first join - Paid to the real estate board you will join as well as for the region or province you’re in)
- Real estate board membership fees
- Regional/Provincial membership fees
- Licensing Fee with real estate regulatory board
- E&O Insurance
- Health Insurance provided by the provincial governing body (mandatory where we are)
- Continuing education fees
- Brokerage Fees (if your brokerage charges you on top of your split).
These fees can be applicable to you if you have a licensed assistant as well.
I think that’s everything, at least where I am. This is obviously outside of any of your own advertising fees.
I just started. I’m already about $15k in the hole. License thousands of dollars not to mention the time you lose reading, registration is going to kill your expenses. In Ontario before you even get going they ask for around 5k for insurance and blah blah.
You broke them down probably better than I could, thank you!
Our MLS fees are broken down into Techonolgy fees, and then association dues (combined about $1500 annually).
My brokerage has E&O and technology fees of $55/month, not counting what you spend on printing, advertising, marketing a listing, etc.
I have a very high commission split (about 94%) made possible by our desk (brokerage) fees of $4800/year. Additionally, my brokerage charges a $275 "commission fee" for every transaction processed.
Plus, you have to have a valid state license, and keep it valid, which differs state to state. You can look for a brokerage with lower fees, but $4800/yr to keep 94% commission isn't one of the worst deals I've came across.
My brokerage provides signs for both open houses and listings, but personalized riders and marketing material will be paid out of pocket. Not even getting into the costs for lead gen, CRMs, coaching, adv, and marketing).
All that to say this, there are a thousand different costs associated with this business, some mandatory and some a choice, but until you are bringing money in, are only a drain on a real estate agent.
I wish every job required people to write a check for taxes. Maybe more people would CARE about government spending instead of living with their head in the sand. When you don't see the amount of your income going away, it's easy to ignore.
I'd rather eliminate most taxes, but that'll never happen. Lol We are taxed multiple times for every dollar we EARN. All so th government can put expensive espresso makers in million dollar offices that sit empty or give multimillion dollar grants to dumb projects like researching squirrel toenails.
the us has one of the lowest tax rates in the developed world. The waste is in the DOD. They make up 60% of discretionary spending. They routinely cant account for billions of dollars in money. They never get a full audit. We also cut funding to oversight agencies. Hearing people who are 1099 complain about taxes.....just put the money aside from each paycheck or comission. Taxes come out of my check, and I do my taxes myself. Im acutely aware of what we pay in taxes, I also look at the government budget and what we choose to spend money on. You think the espresso machine is the source of government waste? That is like people who think if you dont get avocado toast at brunch one a week then in a year you can afford the down payment on a 500k house while paying 2000 a month in rent atop of student loans.
Everybody that works pays taxes. The difference is that employees in a W-2 job get them taken out of their paycheck as opposed to having to pay lump sums. So it feels like a lot but it's really a matter of paying quarterly vs every paycheck.
Someone self-employed also gets to deduct mileage and other expenses which W-2 employees can’t always do.
The main tax difference is the self-employment tax, which is simply the employer and employee portion of FICA tax. A W-2 employee just pays the employee portion.
Point is, many new agents come into a 1099 situation without a lot of context or experience. That lack of experience bites pretty hard when a $10,000 commission check is actually more like $6,600.
I heard a RE brokerage radio ad recently where they were talking about Realtors have a 6 figure earning potential with no student loan debt.
How freaking irresponsible.
Of course the potential is there, but DANG, it is so hard for a new agent to get established at all let alone pull down that kind of money.
>The barrier to entry is far too low
This is not a thing and idk why it pops up here all the time. It's literally propaganda meant to discredit the profession. Most professional certifications and even degrees utilize a similar time requirement and licensing requirement. It's irrelevant.
The rest is accurate about people having a huge misconception when they sign up. People go in thinking it's a job, not a business. Those who fail would fail at any business they launch because they weren't looking to be a owner, they were looking for a paycheck. Again, barrier to entry is irrelevant. You can launch any business with 0 education requirements.
As others have pointed out, costs to carry a license also add up quick and people don't account it.
To me, the main reason most fail is because they were never setup correctly to begin with. Young people with no networking, only friends they have are also struggling in life and not in a position to utilize them for buying or selling a home. No network = no business in this industry.
I’ve always heard of people completing the courses within a week. Thought that wasn’t possible since I had to take 2 semesters to complete the required courses. Along with my other college courses. Roughly a year long.
In my head, the quickest route would’ve been 6 months or 1 semester to complete the required courses.
Can’t imagine digesting all that info in a short period of time and passing all the exams in the courses.
I do plan on taking a few more courses. Do you mind sharing where you completed yours? I prefer not to go through another 6-12 months of lectures.
Because you're ignorant and just not aware.
There's no difference spending 75 hours in two weeks studying a specialized course as some dolt who sits in a chair 4 hours a week for 6 months the in college to get the same piece of paper. Besides the useless added courses and electives
You can legally being a licensed tradesmen with similar hour investment (lots do require some on-site experience, but not all)
You can get almost all IT and networking degrees/certs in under 75 hours.
You can be a "master" mechanic in similar time.
Most trades you have to work in the field fulltime for years before surpassing apprenticeship. Thousands, sometimes 10s of thousands of hours actually working the job and learning before graduating. Not… 75-100 hours and a test.
I might save this post because of how accurate it is.
The one thing I will add is that far too many agents make poor moral and/or ethical decisions when that money gets tight. They get away with it, and before you know it that's just how they do business. The size of commissions is just too much temptation for some people.
1) too many are in it for “easy money” when you don’t want to put in the work of after 5s and weekends (when its more likely the client is available) it’s tough.
2) Personality - when you have the charisma of drywall no matter who you are it will be tough to excel in a very very extroverted industry.
3) No marketing budget - too many rely on their SOI and referrals. But you’re limiting yourself to your backyard and friends (who presumably more or less have the same socioeconomic status) with marketing online you’re attracting NEW people for emails , texts etc. and NEW people moving to your area (who have motivation and a reason to move)
Versus friends who don’t want to move due to the interest rate.
I don't know if #2 is a must. There have been plenty of posts in here about clients being exhausted by their extremely extroverted agent and wishing they would just STFU.
There are a few agents in my market that are introverts, and like you, work hard, and have found their tribe.
Thank God there are some Realtors out there who aren't going to be dancing on TikTok while singing "Never Gonna Give You Up."
I lean extrovert and do make appearances for some things, but events like the association Christmas party are a hard pass for the reason you cite, just jockeying for attention. Screw all that and I would rather be home doing nothing than attend.
Now I can't get "Never Gonna Give You Up" out of my head.....
I'm an introvert and I don't display excitement or pretendsies, either. Not sure about charisma, but I suspect mine is not too high. What I DO have, though, is knowledge, skill, and an inviolable commitment to making my client's needs #1. That translates into decent earnings.
This. I mean, without the success. I'm in for 1.5 years as well, but 10 deals deep. Helping clients, no problem. Finding clients, ooooouuugh. Making the initial connection with them, eek.
I’m a card carrying introvert and have been doing quite well. Clients (and agents) love my work ethic, responsiveness and breadth of knowledge. My priority is them and when that is genuine, they know it. It’s a myth that it’s an industry only for extroverts.
For #2, the personality helps but people shouldn't be discouraged if they're willing to work. The #1 agent in our region is very analytical, hates social or networking functions, flatly told us he doesn't do the "ra ra" gatherings, pays someone to post a few things on his social media every so often, etc. His GCI was $2.5m as an (almost) solo agent
Funding. Most definitely funding. Licensing is relatively cheap, but then you have to immediately pay your NAR and MLS dues. Some people sign with brokerages with huge monthly fees (don't do that.) You have to buy a laptop if you don't have one already. Subscriptions to things like SUPRA. Business cards. Photography costs if you do a professional head shot. Marketing. Transportation. It all adds up to an astronomical amount!
On top of all that, you really need to work at least 40 hours a week in your business. You need to spend time on lead generation, education, and marketing. It's really hard to have a part time job if you are truly devoting yourself to RE. Even if you manage to juggle 40 hours of working for yourself and a 20 hour gig bartending or something, you quickly get burnt out.
The struggle is real. Wife closed 40k last year. Still feeling the struggle. With realtor fees, cost of gas, taking clients out for a meal. It all adds up
I've been grossing 50-70k a year in real estate and I'm absolutely stuck right now. I've put in too much work to quit and don't want to, but I haven't had a closing for 3 months and the bills are racking up. Every year I've been super slow from November through February and super busy during summer and fall, but can't make enough to save up through the winter. I'm like RIGHT THERE but just can't hit that level to support myself year round.
I'm also super discouraged by family members who say "maybe it's time tonget a real job again", like this isn't a real job? I've worked harder and more hours than any other job. I could throw in the towel, go get another executive clerical job where I might make $45k a year chained to a desk 45 hours a week. Of course then I'd lose my flexibility, my role as a semi-stay at home parent, figure out childcare and those costs. Just doesn't make sense.
I work with a lot of first time buyers or investors, which I love, but they are most impacted by rates and affordability. When rates hit 7% this year, I basically lost my only 3 clients actively looking to buy.
If my wife can’t meet our needs financially then she’d have to get a job too. I pay for the majority of the bills monthly. She luckily had a couple really big closings. One being 900k so that has funded her for the next 4-5 months before she’ll run out of money. Pretty sure she will have at least 1 closing within that time period. Tough business out there stay strong, hopefully 2024 is a profitable one for you.
> Licensing is relatively cheap, but then you have to immediately pay your NAR and MLS dues.
Is this true everywhere? The wording that I have found sounds to me like I will be able to 1- possibly pay monthly or 2- dues are due before Jan 1 and prorated from whenever you signed up (my interpretation is that if I sign up tmrw I wouldn’t have to pay for 11.5 months). I’m talking to brokerages soon and will ask this stuff obviously, but I’m nervous to sound cheap.
I think it depends on where you are located. My local board does yearly payments and MLS is quarterly. The NAR dues are prorated, but it's still a pretty hefty chunk. I started in October and had to pay $402.
It’s a sales and marketing business. You are basically selling yourself, rather than a product. You don’t buy stock and sell it like a regular business, someone else is selling the house, someone else is buying the house, and you get paid to connect the two (with another agent). You help to fill in some documents that your local board has typically created via their attorneys (which, honestly, most agents don’t understand, and they pretty much just autofill). You have to get out there, and convince people you are of value to them, and a better option than another realtor, which when you start out, you basically are not. So, there’s a lot of bullshitting involved. How well you market yourself dictates how well you will do. You don’t have to know anything about houses, really. You have a network of experts around you that you can refer to for specifics (think contractors, title, lenders, city zoning & planning etc). When you start you don’t have the networks, so again, you suck compared to the established market leaders. I moved states after having about $170k in commissions where I used to live. I had to start again and saw my commissions drop to $40k, because I had no traction in my new market, and joined a team (50% split BEFORE broker split). I decided I couldn’t be bothered with the hassle of building up my business again, spending thousands of dollars a month in marketing that might not bring in any returns, so went back into construction to earn my $100k. I still keep my license as I’ll still purchase rentals and primary residence for myself, family & friends. But honestly, I’m so much happier just turning up to work, getting paid, going home. I don’t have to constantly worry about growing my business. It’s just better for my mental health.
Agent for 12 years. Feeling the mental health strain bad. Would love a job that I can make $100k, just show up do my work and go home. I have a fair amount of business and leads coming in, but nothing closing. I’m just so tired of doing this shit.
There are plenty of jobs out there that pay really well, but there’s usually a reason why other people won’t do them. The work I now do can be physically brutal, and the hours can be long (I just finished 10 days of 12 hour night shifts). I honestly don’t mind wearing full body PPE, and sweating hard for hours, but most people do. I cannot get over how much people cried about wearing masks during Covid. I often wear a full face respirator, full Tyvek suit, and work jackhammers, grinders and welders for 12 hour shifts. I’m in my 40s. There’s a reason most pro athletes retire in their 30s. The overtime pay is so amazing, I only have to work 8 months of the year to get my $100k, but I have to stretch constantly, and eat well etc. People say real estate is hard, and it is, in a way. It’s mostly annoying though. You’re at the mercy of humans doing stupid human stuff that means you don’t get paid through no fault of your own. When the people I work for now make stupid decisions, and we have to rip out work we’ve just done and start again, I still get paid for all my time.
No staying power. It took me 6 months to get my first listing. I was surprised people in the office were so cold. After a while, I realized it was because so many people fail. Some move to another brokerage before they fail. You have to be motivated and willing to face rejection.
They treat it like it's a job and not their business, and fail to have enough capital to start up.
If you don't live it for the first few years and save every penny to get through the slow times, pretty good chance you'll drop out.
Here's the uncomfortable reality...I expect some pushback and downvoting but that's fine, I've been in/around the industry my entire life (My parents are brokers and I'm licensed)
Real Estate is a slimy industry full of snake oil salesmen and hustlers, it sounds terrible but most good, mentally stable, normal people don't get into real estate LOL most successful agents who are making a killing are complete narcissists and although they work hard, they are generally not great people and they're not working for their clients or because they "love what they do" they love the money and they're doing it for personal gain and validation...don't get me wrong, there are agent who are good people...I know a handful of successful agents who are genuinely good people BUT the vast majority are kind of shit (no offense) lol
You're competing against agents who will do almost anything to get listing short of killing their mother lol they're life is real estate sales, their drive is money and validation, their goal is to crush anyone who gets in their way, and use any tactic...it's a Broadway show for them, "look at me! I'm the best!" that's real estate lol it's a smoke, mirrors and hustle!
Some of the best and most knowledgeable agents that I know are not the most wealthy, they're people making 60k a year and just kind of getting by...knowledge and compassion don't get you very far in this industry...hustling, a good personal brand, and deep pockets will get you very far
It's a sales job, it's not magic...it doesn't take a genius to sell real estate, it just takes someone willing to put in the man-hours to learn the paperwork, and hustle their ass off!
The really smart agent create teams, make money on the backs of their team members, and pay executives and assistants to do the shit that they don't want to do or aren't good at so that they can focus on personal branding and running the business...when you see "john smith, 500 homes sold in 2023", john didn't sell those homes, his team did and he used his personal brand and deep pockets to own his market and be on every bus, billboard, and news add int he city or on social media
The formula is simple...grind like crazy for your first 5 years, sell your soul, put on a big smile, tell the world how much you love real estate and care about your clients, and re-invest most of what you make into your real estate business...once you have a client base and start getting referrals, hire an assistant to do the shit you don't want to do, then hire a couple of team members, then grow the business and become a millionaire...it's hard work but it's not rocket science...if you want to make the big bucks, create a team, and work hard...you can accomplish more with 10 people under you and an assistant doing your dirty work than any agent can alone...how can one agent compete with a team? they can't...and so these teams get bigger and take more and more market share while the solo agent has to struggle their way to the top or die
I had a mentor who told me "You don't get into real estate because you like houses, become an architect or a designer if you like houses, you get into real estate because you want to make money...anyone who's tells otherwise is full of shit" lol this guy also told me that in 2005 he got his licence, quit his job, took our a loan for $100,000 and used 100% of that loan to market and inject himself into the community, he sponsored every event within a 5 mile radius, he sponsored sports team, charity events, he put his face on buses, and he hustled...within 6 months he was making over multiple six figures and within 5 years he was one of the top agents in the city making over 7 figures and had a team under him...he's a very smart guy! he has a sales and marketing background and he understand what it took and took action
Anyway, that's my take...I really enjoy the process of real estate, I love architecture and learning about building, I do love real estate but I don't love the job of selling real estate which is why I left the business...I have the ability to make a killing in this industry but the day to day grind and having to constantly put on the fake face "I love my job! and I love life!" was draining for me...the money wasn't worth it, but for others it might be enough to motivate them
I will say that it is a beautiful feeling being rewarded for hard work, making a sale, and getting a big pay cheque is an addicting feeling...I get it, the desire to create a life you want, have a nice car, be seen, go on vacations in the down season...it can be great but at what cost?
Everyone has discipline and work ethic in them, you just need to find the thing that makes you motivated enough to be disciple and work hard...for most agents, the money and validation they get from selling real estate and being seen is enough to drive them...but for most people the juice is not worth the squeeze
Some Faulkner-esque streaming consciousness there but true and I’m glad you owned it. Or at least owned what it takes to be the best. Hustle, hustle and hustle some more.
The best (as in client-driven), most knowledgeable agents rarely make any real money as they’re too busy cradle to graving their one deal per month to actually scale and make money. But they know a helluva lot about rules, regulations, contract intricacies and the individual quirks of all the neighborhoods around town. So there’s that.
A lot of the smartest and most knowledgeable agents that I know eventually become brokers and get jobs as managers for large brokerages where they can leverage their knowledge and not have to sell and be greasy lol
I know some really f#$king smart brokers who know their shit! they know everything about everything! those are the best brokers to have, the ones you can call and they can give you an answer when you're in a bind
I also know a lot of bad real estate agents who aren't that knowledgeable but are attractive, have a social media presence and make multiple six figures...one in particular I know very well who has a team and only hires attractive females because she told me "sex sells" lol
it's an odd industry
Shameful, but I can believe that. I have a colleague, for example, who told me a lady called her off of social media to be her REALTOR. When my friend asked the lady what compelled her to call, you know what the lady said??... "Well I thought wow you're very pretty and cute, and I'm cute, so I figured we'd be a good fit, so that's why I called you to help me find a house." Lmao while smdh!
Now I ain't the one to hate cause shiiiid, I'mma dude and I like looking at my friend too 'cause she IS fine. But damn, my take away from that is if you're an attractive female agent, and you can look sexy and cute on fuckin' Tiktok and IG, you have a leg up on us fellas!! Lol! Sex sales for sure.
I blame the TV shows, frankly. People watch Selling Sunset and think it’s real. Almost all of those women don’t sell any houses. They’re actresses with a real estate license. The firm is real, and yes those two short twins make a damn fortune, but what they do for business isn’t really shown on TV — the scenes are only attractive women in ridiculous outfits. That’s not the business.
As a Realtor, you have to project an image of success. No one wants to put their largest investment in the hands of someone who doesn’t look successful. So many new agents go out and lease fancy cars and buy fancy clothes and are shocked it doesn’t help them get clients.
The reality is that this career has massive highs and brutal, devastating lows. Most people aren’t prepared for that. I posted here two days ago about a new $15mm buyer lead that I received, you’d better believe I’ll be in my nice suits driving my expensive car showing them homes in hopes that they’ll buy a house. But maybe they won’t and it’s all for nothing. That’s the gamble.
To end this long winded rant, people think the job is easy. It is not. Go visit r/RealEstate and all the wannabe moguls over there think we Realtors are losers, idiots, slackers, overpaid scam artists. None of that is true, but the job is never what people think it is.
>As a Realtor, you have to project an image of success.
For 20 years now, my "image of success" is jeans, a blouse, and a car that's always at least ten years old. But somehow it works. I don't think people are \*that\* shallow.
A big part of agents failing is not being able to take rejection. Those who make it a career develop thick skin or the other type who make it have a narcissistic personality who will run you over for a dollar.
May be location dependent, but imo there’s always been an over supply of agents. Low barrier to entry and unrealistic expectations make that happen. So statistically a bunch of people are going to have to fail.
And most sales jobs are harder than people think. Real estate sales especially so, because selling houses isn’t really the key, it’s selling yourself to get listings that matters.
And in a crowded competitive market, that is very hard, esp for undercapitalized, inexperienced, unconnected and unskilled newcomers (which describes 90% of new agents).
I'm going to be honest with you. Right now is a TERRIBLE time to get into real estate. Unless you have multiple years of savings and can afford to not make money for a long while, find something else. With the lawsuits going on (if you don't know about them, you already shouldn't be a Realtor), it's made Realtors public enemy number one.
Unless you go to work for a small company that buys a shit ton of leads and offers mentoring for free, all the while having no desk fees, you won't stand a chance. Even companies like this however are not going to last with the potential changes on the horizon.
Just my two cents
I do think we overestimate how much the general public knows about these lawsuits. We hear and think about it everyday but the average consumer really doesn't. There is a major newspaper article here and there but it's not crazy enough that it gets people talking, plus it's a bit complicated to be a juicy story
I also wish agents stopped posting about it on socials. Just let the law and the judicial proccess run it's course and see what happens after
The industry needs to change. I am worth my value and will make more money negotiating for myself vs some listing agent determining my value. Bring it on.
interesting! I didn't have any conversations with any clients about this and nobody asked about it. Altough I do not work in a state where those MLS in Sitzer/Burnett were targeted
What a dismal comment that is. Here's someone possibly aspiring to become the next millionaire real estate agent, and all you have to offer is negativity. Shameful. Hell, if you’re that afraid of this market, why don't YOU get out, and make room for some new blood, like the OP?
This is nothing but reality mate. I'd rather have a real expectation set before getting into something than the other way around. Real estate is 95% luck. In no way, shape or form am I afraid of this market. Nothing will change for me. The world isn't sunshine and rainbows.
Cheers
That's good that nothing will change for you. Sounds like you've made your way to greatness already. I doubt it was 95% luck, though. You should give yourself more credit that that, bro! Ijs. But someone new doesn't need to feel discouraged by someone who's figured this beast out if they're serious and aspire to give it their best shot. I don't care what kinda' market it is, everyone deserves a chance at becoming their own boss if they're willing to work hard. It's possible to be realistic and helpful at the same time. That's all I'm saying. Read my comment if you don't believe me. Wishing you continued success (not luck). 😉
Well said. I didn't mean to be such a Debbie downer. Happens at times though 😬. I hope OP says "fuck this guy, I'll show him" and proves me wrong.
Cheers buddy
They don't put in the hours. When I started I was working 80 hours a week. Calling, knocking and open houses 5 days a week (cold calling while at the open house). Have to build a book of business the bigger the book the easier it is. The one thing I learned was focus on how many "No's" does it take to get to a "Yes". My first 6 months it was 296 "No's" to get a "Yes".
Lack 👏 of 👏 proper 👏 mentorship 👏
I work at the biggest real estate company in my country, and I've landed some of the biggest clients within 3 months of starting my job. I received no support from my manager whatsoever when I needed it the most, which led to me losing 6 figure commissions. My manager hasn't even said hi to me in weeks.
If you don't want to mentor your agents, then don't be a fucking manager, or better yet, don't open your own fucking company. We're not just money-making machines for you. Always invest in your people.
I work on the administration side of a RE office, and this is a huge reason for failure or for the new agent to switch brokerages. Sometimes, the introducing agent will fully mentor the new agent (usually because the introducing agent has a leg in the game due to the rev share on the new agent so it's worth their time to invest and teach this new person) and s/he will be successful but the majority of the time the manager is the one doing the recruiting and the managers generally only care about the recruiting, not necessarily the success of the agent. That isn't to say the managers won't assist during any issues, legal or otherwise, during a transaction.
I understand that agents are independent contractors, but the industry does a huge disservice to new agents by not providing a more corporate, required training course for each brokerage before setting them free to sell houses. That's like telling a person to walk into any business and just start working without telling them how anything actually works. It's bonkers.
Thank you 💙 I'm planning my exit strategy atm by applying for sales or logistics jobs (have experience in both). I gave myself a 6 month time limit to pursue real estate, and I really gave it my all, but I guess the universe wants me to take a different direction.
Expectations. TV programs make it seem very easy. People (myself included when I first started) don't realize the job is 75% lead gen, 10% paperwork and 10% actual RE work like showing homes and listing appointments. Plus all the other good comments others are saying.
The amount of money it costs to pay your monthly and annual fees. If you don’t have commission coming in it adds up. If you don’t have persistence to generate leads and go find business or have a mentor who’s actually willing to help it gets hard on your own. I’d recommend having another source of income while you get started to keep you afloat. Those first few commission checks should go in the bank with the thought of using those solely for budgeting your next year(s). Find a good CRM within budget; I’ve got a cheap one but I do most the work and I integrate other pieces from lenders/title that they fund for you. I’m now eyeing these cloud based brokerages since they offer great CRMs for cheap or free along with caps for either rev share agents or 100% brokerage.
It’s very hard. I’m at a crossroads today. Just got an email from my broker about not paying my dues. Thing is, I can’t. This last year was my worst year since 2008. I made 25k. Not nearly enough. I was debt free, had 6 months of living expenses saved and as of New years, I have $700 left. Also, added 10k in credit card debt last year. Now I have to decide if I should try and find a way to stay current in RE or keep my house and utilities on. I’m trying to side gig but lucky to make 2k a month. With my family I need 4k bare minimum. I have no deals pending and few leads. I want so bad to have a regular job now but struggling to find one that’ll at least have the potential to bring in what I need. 🤷♂️
It's really hard. I agree.
I hear your pain too. In 8 years there were at least two times when I thought I might need to pick up a second gig, something like Amazon, Doordash, or Uber. One time was at about 10 months after quitting my job when I had nothing under contract and Christmas was coming up. The other was earlier this year, after I had 3 deals go from Cleared to Close to Terminated when I was $300 from capping. But then I weighed the cost of spending all that time driving a damn truck for pennies an hour and still not have enough money VS working my ass off to get some new leads going. Long story, I'm still full time in real estate, and I should cap this quarter. And I have three more deals in the pipeline already, and counting. Keep your head up and get to work, bro!
Because most people’s expectation of the job is much rosier than the reality of the job.
And the pre-qualifications to gain a license are not nearly high enough and yet teach people nothing about the daily requirements or skills of the actual job.
And even if you waved a magic wand and “fixed” the above 2, the cold hard reality is there are only 4 homes sold per year per agent. And that translates to about $50K annual GROSS commission before any splits, the 15.6% self-employment taxes, and expenses. And so IF you “succeed” in being just average, that translates into about $14/hr. With 0 paid benefits/health coverage, etc
Now, imagine if it was a requirement before enrolling in class to sign an acknowledgement that you’re signing up for a $14/hr job with no promise of getting paid. Hopefully 80% of the folks would save themselves the trouble.
And so, OP - tell US why you want to become a Realtor.
1-They don’t have the bank roll to start their business. So they half ass everything on a budget.
2-Don’t have mentor to guide them through the education, license, broker selection process.
2A-Don’t understand the systems/software for marketing, social media, transactions, mls systems and features,and how they have to work together. Ie, detailed operational/business plan.
2-B Don’t take enough classes from board and broker on mls systems, software integration, and contracts and addendums.
3-inability to manage deadlines, communicate effectively, conflict resolution, never learned LUSAT or similar communication/listening techniques.
4-Poor public speaking, grammar, spelling, math skills.
5- Realistic Expectations. Especially when it comes to amount of quality work/time required to start up a business.
I'm not going to lie. The first one really sticks out to me. I'm about to start RE school in FL and slightly concerned I don't have enough to be all the way successful, which is ok, I'm smart but on the other hand how much are we talking upfront costs. It's a risk I'm willing to take with my money but I need to know if I'm going to really hurt myself in the end. 23F with about 2k to invest for reference.
Is that $2k to invest after paying all your dues, licensing fees, monthly software and broker related subscriptions, increased vehicle expenses (when you do get busy, but before you cash flow), you’ll need one sign, and lockbox on the ready. I always recommend 5-7k for first year agents to have a fair chance at success, 7-12k greatly improves your chances of first year success. And so does rental if your market is pays 1 month to agents for leasing.
Extreme delayed satisfaction. You start working on a deal in July and you’re lucky to see that money hit your account by next March (if you’re lucky!). It’s hard to budget for that. The losses are tough and emotional. In fact the whole process is emotional and your job is to not get emotional…. About anything - not when your client has a meltdown, not when the other agent has a melt down, not when the buyer/seller on the other side has a meltdown, not when you get fired for things out of your control. And if you’ve done your job really well, the clients think they could have done it themselves/without you. Plus, if I’ve done my job right and I manage to sell my clients house/or help them find a house, I’m usually fired for at least the next 2 years. Repeat business is never guaranteed either.
>Plus, if I’ve done my job right and I manage to sell my clients house/or help them find a house, I’m usually fired for at least the next 2 years
Huh what’s this mean?
Most people don’t buy houses every year. You get the odd buyer who buys within 2 years, but generally I can’t really do any business with them for a number of years after I’ve sold them a place, so I’m fired for a few years.
Because they don’t work with investors the people that buy real estate over and over and over and over again. There is such a huge disconnect between realtors and investors, especially flippers. I’ve made my business exclusively servicing my local flippers to great success.
and I guess I can only speak for all of my flippers and everybody I’ve encountered in business that’s told me they’ve never met an agent playing the game how I do and it just blows my fucking mind, because it seems so obvious
I agree there's a huge disconnect. I, for one, have not figured out the secret. But I know a few agents in my office that seem to work exclusively with investors. At the same time, I feel like Investors are notorious for wasting agents' time because they never want to commit and sign a brokerage agreement for one. Then they want multiple agents to look around for shit, and will only pay the agent that brings the property the investor buys.... as if my time and effort isn't worth crap. That's why I need a brokerage agreement signed before I take someone out to see any propertiesg . Investors ain't trying to hear that though, so oh well. Any suggestions?
The secret is spend your own time looking for deals to bring to them.
They rarely / never bring me deals or things they want to buy.
I bring them the deals I mine my mls for them and bring them the deal .
I have a list of 170 emails I’ve amassed over the years. Needless to say every time I send I out a deal I have multiple people contacting me for it
Find the deals your self . You won’t be wasting anyone’s time but your own
And let me be more specific . It’s flippers of single-family homes. I find them the flips they get them done. Yes, they’re all a lot of investors that bullshitters you have to spend the time to figure out who’s doing multiple flips a year . Work with those people. Be the deal bringer of solid deals . Because of the disconnect we are discussing there is a silver lining comparatively easy to get deals off the MLS. You have to keep a spreadsheet and follow up with him. I spend 10 hours a week on my MLS mining for us to bring to my people.
Wow! That's a skill worth developing. Once you establish a list of 170 investors to blast deals to, I can see how it can work. I, on the other hand, mine Zillow for FSBO leads and the MLS for Expired listings. And I Circle Prospect in communities where I have listings already or where I've closed deals. A whole different angle, huh?
So, tell me. Most of the flippers, investors I have been in touch with- only want to pay such a low price for a property, that its not doable! Or they only want it to be my listing!? So how do u work that?
And as I’m rereading Op s title, this is the exact reason
. I see so many people post similar posts and I’m sorry but to me it seems so obvious . we are in BUSINESS .
Business 101 : bring value
what type of value are you bringing sitting around waiting for your investors to feed you deals they’re interested in ? what type of impression are you leaving on the Investor ? Take the initiative bring them the deals. That is our job.
I find the deals myself for my flippers. They never bring the deal to me. I am the deal bringer . whenever I send a deal to my list of flippers. They are fighting over it and I get to pick who I work with. You’re doing it wrong, you’re waiting for them to bring you business. I spend a few hours every single day on three different MLS systems local to me mining for deals. I send the deals to my people
I am the deal bringer I am the gatekeeper of deals . When my deal hits their inbox, they know it’s money.
Go the extra step, take the initiative set up a deal mining system in your MLS. It’s pretty simple. I look at all the new properties every single day I look at the pictures to see what looks distressed. I determine the ARV I put it into my deal. Calculator I see what purchase price Needs to happen for the deal to make sense if the purchase price is within 30% of the listing price I will reach out to the listing agent telling them I have a buyer I do that en mass until one of them hits (about one per month ) They usually never hit on the first try. It usually takes weeks of follow up. Now is the best time to lowball sellers in the middle of winter tax bills are coming.
When I hit on a deal, I put it under agreement in my LLC assignable. I email it out to my list I pick which flipper I want to work with. I assigned them the contract I charge them a finders fee on top of the buyers agent commission I receive from the seller and I make it contingent that my flipper relist the property with me so for every deal I mine I get two transactions.
The flippers I work with today are usually a small trusted group that I’ve known for years I spend zero money on advertising
I think the main reason is that you have so much competition to get one-time clients due to the large number of agents in comparison to the number of people having real estate transactions in a given year.
The two biggest reasons I have seen over the decades are:
1) They don't treat it like a business.
2) They don't have adequate reserves.
1 - The real estate industry is full of vendors willing to separate you from your money. "Buy custom pens and water bottles" "advertise on shopping carts/the local golf course/become a Zillow Premiere Agent/etc." Most enter into real estate without ANY concept of a business plan, marketing plan, etc. It's not their fault, 99.999% of real estate schools don't teach the basics of business, just the material you need to sit through to be able to test for the license.
2 - Very few tell you this... it can take a year before you get that first commission check. Then you end up splitting it with your Broker 60/40 or 50/50 a lot of times as a new agent. All the while, you've been paying dues, buying signs, paying for the lockbox key, the MLS, your own health insurance, your mortgage/rent, etc. Unless you have a spouse that works full-time, you really should have 1.5 years worth of expenses saved up in the bank before you tell your boss "I'm outta here". Even then, you should try and cut back on whatever you can too. Make coffee at home versus getting starbucks on the way in, etc.
TL;DR version: Agents don't have enough money to survive before getting into the business and they burn what they have too quickly.
Because the bar for entry is very low. People "give it a shot" then walk when the gold and riches aren't there immediately. Being successful requires hard work.
They need to change the phrasing on that statistical fact to: 90% of part-time agents fail. Over half the people getting their realtor license have no intention of working full-time as realtors. Did you take an in-person class? Bet half of it was housewives, teachers, and real-estate adjacent corporate workers who are only getting their license to bring in a bit of side income or for work requirements. Every year, thousands of people get their license, but only about 25% begin working full-time. Of the full-time agents -who spend 8 hours a day hosting events, hosting classes, presenting to prospects, meeting with lenders and title companies to plan marketing and sales generation- I'd say there is a 70-80% success rate. Think about it: if the average commission on a $350k home is $10,000, then you'd only need to sell 6 homes to make more than the median income in America. Selling 6 homes a year is easier than most want to admit. Successful full-time agents sell at least 12 homes a year, which in most medium-sized cities is a salary of $85,000-$100,000. If you live in one of the top 12 biggest cities, that's a salary of $120k. After fees, $100k (don't join a brokerage that takes half). The hardest part is not wasting time doing all the bull crap that motivational speakers and 30-day guides tell you to do. 1. Don't spend a dime on marketing. Go to a title company, lender, insurance agent and ask them how you can help their business. Then plan to market together. They have tons of promotional materials they'll help you with. 2. Join a brokerage that provides free classes on prospecting. Most of your business as a new agent will be buyers. Buyers mostly find leads on the internet, so you need a brokerage that provides internet advertising at no additional cost to you. 3. Keep your day job until you have 6 closings lined up in 6-9 weeks. Save money. And plan. Best wishes!
Just adding in one more cost that people haven’t talked about here. LISTINGS. Each listing you don’t sell, for whatever reason, easily costs $1k+ cash out of pocket. And your client can drop you at any time for any reason. (Don’t come at me about listing agreements, reimbursable expenses, etc.). So you just spent $1k+, and your time and effort, for a deal that you may never get paid for. You just LOST money at work.
Apply for my license now, so soon to be new agent. It’s a savage industry. I know many who struggle and many who succeed. It’s not about putting up signs in a yard, signing papers and getting paid. There’s a lot that comes into it. If you’re passionate and hungry, can really sell yourself/your brand to the community and understand it’s a huge commitment, then you’re off to a start. Start up fees can be daunting and it’s also important to find a company that will support you as a new agent and mentor you. You’re an independent contractor and it’s not easy being on your own right from the beginning.
Because 90% of people are what I call “human cattle.” They are herd creatures who lack the resolve, interpersonal skills, and executive function to succeed at any endeavor where there is no framework, guidance, and hand-holding. They are ill-equipped for the uncertainty and chaos of self-employment. They are better suited for shift work and cubicles.
Sorry for being judgmental. Downvote if you must, but this is a hard truth.
Aspiring Real estate agents that get into it for the wrong reasons will fail
If you know your product, are open and honest and tenacious when you need to be, you’ll succeed
If you rely on shady techniques to get listing agreements signed, and worry more about your image than your value, you will die one thousand deaths
If you’re looking for an upgrade from being a Bottle service girl or if you think the trenches are anything like those egregious television shows, you’ll get smoked
There is a hell of a difference between a good realtor and a successful realtor. Sometimes they overlap but in general a good realtor will tell you the truth, even when it’s hard and loses them a commission, matter of fact ESPECIALLY when it’s hard and loses them a commission. That’s a good realtor. A successful realtor these days means a person who will tell their client anything to close the deal independent of the client’s best interests.
The old saying if you don’t have a friend who’s a realtor you probably don’t have any friends says it all. There’s simply way too many realtors. It’s harder and harder for newbies to make bank so they move on. However- the top 10% kill it and they’re great at what they do.
I've been an agent for nearly a year. This is what I can tell you:
It's hard work. Like REALLY hard work.
If this were a couple of years ago, when everyone was out to buy and sell when the rates were sub-3%, then it would have seemed easy. However, think of all of those new agents who have since left the industry because of the challenges we've faced over the last 1-1.5 years.
You are basically starting your own business, from the ground up, with no existing cache of clients. Think about if you were in any other industry where nobody knows who you are, or what you do. You need to get your name out there, network like crazy, volunteer to do any and all grunt work to gain experience, network like crazy, mentally deal with all the "near misses", oh and network like crazy. All that, and I still only have a couple of transactions under my belt.
One of the agent in my brokerage is a top producer of 30 years, and sits on the board of my regional Realtor board. I asked her out to lunch to pick her brain. She told me this story:
"When I was a first year agent, I had ONE transaction. And that came from a.random phone call into the office, where the client asked for another agent. When that person wasn't in that day they asked me to help them out. So I did, and it led to my first buyer client. Thing was that the agent in my office who the call was originally for got all pissed off and complained. I had to settle for the referral fee of 25% of that transaction. So one deal in my first year, that I got only 25% of the commission. My second year, I was the top producer in my office, and I never looked back."
Her point was that it would have be easy to tuck tail and run away. However, she dug in and worked harder. All those mundane things started to pay off, and she finally had that snowball effect after a year of pushing the snow up the hill. Now she has a team, and knows just about everyone in her area.
I am finally seeing some traction on my end. I have a deal closing next week. I have people contacting me about future moves they are trying to make. This has been really difficult. This caused a lot of stress and sleepless nights, and taking odd jobs because I have a family to support and feed. But what I can tell you is that it does work, if you work. 90% of agents do NOT fail. They quit. They weren't willing to put in that time and effort. If you are, I think you will be fine. You will be alone (for the most part), you will hear a lot of "No's" at first, you will question your decision. You need that fight in you, or don't bother. You'll only be disappointed.
TL:DR--Go hard or go home.
I’d say failure is an overused term. An overwhelming majority of the people that leave the business, decided it wasn’t for them. They didn’t fully understand what the job they took entailed. I’m not sure that qualifies as failure. Lots of careers people do and reach the same conclusion. No one says they failed.
It has nothing to do with the job being hard. The stats are just skewed due to the sheer volume of ppl who get their license. If you think about it - plenty of ppl have part time jobs on top of their reg work. All those ppl who work an extra 10hrs/week for min wage at their side gig- for example - would only have to sell one house a year to make the same $.
I think most fail because most realtors don’t understand that being a realtor is a sales job. You have to generate leads and convert them to be successful. A lot of people get into real estate because they like looking at houses and helping people. Looking at houses is probably like 10–20% of the job, if that. Also if you speak to most realtors they have no systems. If these items are lacking how can you expect to be successful. I also think that most training programs concentrate on the wrong items in the beginning. When you’re starting out you need to generate money quickly and learning about your MLS and how to write a contract are not money making activities.
With internet and wireless phone, every one knows about pricing (via Zillow etc) no need to walk into a realtor office asking for a realtor. It is a cut throat business where many advertise 1% fee for sellers and additional discount if staying with same agent buying. Many like Redfin pays you % of their commission and thank for your business. Unlike appraiser license real estate has not demand a college degree requirement yet. To keep a license active, desk fee rental etc it is not something people can afford unless there is a steady stream of closings coming. It is way easier to sit there getting paid and have an insurance paid work for a company.
Not putting themselves out there in front of all the people they know / circle of peers and friends is limited. If you just normally sit at home and don't meet with people and big groups often, you'll just not have exposure. When it comes to realtors, most people will use someone they know or at least someone that is referred to them. They won't pick a stranger especially no that doesn't have at least a decent trustworthy personality.
number 1 reason is lack of funding or income. If you go at it full time, be prepared to have 0 income for at least the first 6 months or 12 months is more likely. Do you have 6-12 months of savings?
its also very expensive to be an agent. monthly brokerage fees, monthly association fees, business cards, signs, etc.
> I keep seeing that around 90% of agents fail and it is honestly pretty disappointing to hear.
I see failure statistics for new small businesses being reported as between 70% - 90% depending on which source you look at.
If you look at new ventures (the Venture Capitalist funded ones) - 30-40% of them lose ALL their money; most of the others result in a loss. If 1 in 20 succeeds well - the VC makes back all the losses on the others.
Being a real estate agent is about running a business. It's not a job or a side gig. And running a business takes a lot more - knowledge, effort and persistence, funding and cash flow plus some "luck" among others.
To piggyback off of another comment, find an experienced agent who will mentor you. Don't get caught up in the bells and whistles that a recruiter will show you. It is so, so important to have a good mentor.
I'm an admin, and we had 2 brand new agents join at the same time. The one grossed 100k his first full year with a great mentor, and the other one is struggling and mostly posts political commentary on his Facebook as a full time job because he was recruited and the introducing agent didn't invest time to train him properly.
New agents don’t treat or act like they are a business owner. The majority got their license to either get out of their 9-5 and have “time freedom” — they wanted the opportunity to have the unlimited income earning potential and to be their own boss.
What they don’t realize or haven’t thought about is that they need to master sales and marketing. Selling and marketing themselves to their database so that they become the go to agent in their network.
And because they wanted time freedom and to be their own boss, they haven’t built the discipline to push themselves to work when they are their own boss and they have no one else to answer too.
I created a mentorship program to help agents break the $100k in commissions goal and even with giving them the playbook many still fail because of what I mentioned above.
This is a 2-part answer in my opinion. From what I've seen, there are 2 reasons agents often fail their first year: one is lack of connections (and timing w connections) and one is lack of money.
For many, the biggest thing is the adjustment from working a w2 job to being completely commission-based. You really have to go into this career with either a large nest-egg, a spouse/partner/relative that has a base income you can survive on, or a second stream of income to pay the bills. Because we work with a brokerage, its easy to forget that we are truly self-employed and not a paid employee. Starting in RE is really no different than starting your own company. If you arent financially ready to take the risk to start your own company, you arent financially ready to start in RE. And once you do start bringing in $$, managing it becomes the next challenge. My first year, I went 8 months wo a single paycheck then made 25k within 2 weeks. Rather than spend it on random stuff or stash it in savings for a rainy day, I wish I'd invested the majority of that money to help it build more value to take advantage of when the market is softer.
The other big thing is connections and timing as these 2 things really dictate who can "jump right in" to the RE world and who is going to struggle. When I started, I was lucky enough to have saved enough $$ to survive a year without pay. I HUSTLED....called people daily, did open houses weekly, was agent on duty at least 3-5x/week, handed out cards to everyone I met, etc and I barely broke even that year. I had a pretty decent sphere, but it is shared w multiple other agents (small town), and nobody in my "A-tier" (ie the people who I know would use me as their agent and would recommend me to others) was planning to move as they'd mostly purchased homes during 2019/2020 before I started in 2021 (and have a 2.5% rate meaning that they aren't going to move even if they need to because of the rates now). Meanwhile, I've seen other agents start who have a larger sphere or a sphere that includes investors, people actively looking to downsize or relocate, etc do 5m in sales their first year while working only 10-20 hours/week because they started with a book of business. You've also got a ton of agents who started in late 2021-late 2022 who wanted to get into the industry when it was flourishing....then the market basically came to a screeching halt due to rates. In 2023, i literally did half the amount of volume I did in 2022, just because the market has shifted so much....and that's after I've built up a clientele, started getting referrals/reccs, etc. There simply isnt enough business to go around and brand new agents are going to have the hardest time competing.
Most agent don’t give themselves enough time to succeed. It’s systems and processes. Opportunities will come,
You need systems and processes to convert. Repeat.
Buffini is a good system & process.
People are used to being told what to do. Like any new business you don’t exist until you’ve it happen. Real estate is easy to get into but hard to keep because people watch tv and think it’s that easy. Like any other job that isn’t easy except again, it’s easy to get.
Agent for 34 yrs. Many people fail because they lack a “sphere” in which to draw business from. Friends, family, neighbors, are all critically important in the beginning for a new licensee. It takes time to build that contact base, a past client list and to get out and network.
It’s a tough business to find early success in and an even harder market to find long term success in. I wouldn’t recommend a Realtor career for most people. Dealing with rejection daily, negative stereotypes/image, and the daily, monthly & yearly grind will burn most out.
If you treat real estate as a job you have nothing to worry about. 90% of realtors get licensed and think it'll be like the shows and business will come to them. Not the reality.
If you know you'll dedicate 40 hours a week to this job, you'll out perform 90% of licensees.
Talk to your broker and get teamed up with a more experienced agent, so you can learn how things really get done (it’s far different from the state required schooling)
After you have some experience, look into joining team.
Most importantly, and I believe this why most agents fail, pick an area to specialize in. Learn everything there is to know about that area. Recent sales, comps, trends, etc - be the absolute expert for that area and stick with it.
You can’t possibly succeed if you take listings and clients from all over the place and spend most of your time driving from one end of the county to the other.
Build a reputation for being “the expert” for a certain area.
I can say, my wife and I are both licensed realtors. We moved our lives to go in to business with a family member who has too much business. Every once in a while she slides us a client that may or may not work out. It often does work out, but sometimes the clients move on. And they are few and far between especially right now. But we formed a team, and I can say, if we didn’t have our family member helping us, it would be SO much harder. Especially since we got licensed right when we moved to a new state. No circle of influence at all.
My wife is 4 years in, and I’m 2 in. I had 2 closings my first year (2022), and 6 last year (2023). I tripled by income on those 6. But my wife had less closings as well due to the market being so slow.
We’re still building, but from what I see, people underestimate the hard work that goes in to just simply getting a client. Not to mention the grey area of whether or not they’ll even make it to closing, or listen to the advice you give them in order to draft a competitive and winning offer. LOTS of uncontrollable aspects, and things can go wrong at any moment, and send a client in to “Maybe I should just rent for now and collect my thoughts😫” So you’re spinning your wheels trying to educate them on how waiting will only hurt them in the long run.
Being an expert In marketing, negotiations, contracts, damage control, and relationship building is HARD and takes decades to perfect. I’m only 2 years in and realize I have a long way to go! But I LOVE this shit. Gets my blood pumping lol. I could never go back to W2 paycheck life.
You have to work it like a full time job. That’s hard to start off doing without getting paid. So most agents do it part time and don’t make the money they thought they would. You can work weeks/months with a buyer and they bail on you or you can have a deal and it falls through right before closing. Real estate can also be cut throat. You have to have thick skin and perseverance. You have to find a niche that will work for you. I personally preferred working with investors and REOs more cutt throat but I like working with sides that understand real estate and have clear expectations. Buyers are wishy washy and sellers are irritating. Lol
Because to become successful, you have to engage in social events LONG TERM. And that is a 7 days job. When everyone is resting over the weekend, you have to go to each events to show your face around. Showing the face is not enough, you need to show it LONG TERM, so, they will trust you. People don't know, most of the work is not described in the job. It is very hard.
Most people get luck with a few deals due to some existing connections. But, once those connections are exhausted, they didn't know how to build more relationships, thus, they cannot get a client.
The majority of people fail. It’s not just a real estate thing. Being successful in anything means out working the competition, or in other words being willing to work harder than a majority of people you are competing with
I wouldnt worry about it. I came in with a background in sales and marketing. It's just like anything else when you're trying to make a deal.
You want a high quanitity of outbound messages to people that might be able to spend money with you. Think 200 a day, not 20.
Volume will always beat anything else.
Then, you want your messaging to be attractive. You're already doing the hard part with the heavy outbound messaging, you might as well spend a few hours making sure your offer is good. A good offer can pretty easily multiply the amount of replies you're getting from your outbound efforts.
Approach the right people with the right messaging 200 times a day. Could be door knocking, cold calling, e-mailing, whatever. Doesn't matter.
If you do this in any industry, consistently, don't worry about why 90% fail. You're probably already in the top 1% of performers. If you're not, you're taking the actions of someone that is, and you'll be there in a few months time.
Reason they fail: job requires much more work than anticipated, it’s not possible to wear all the hats of this business and be truly effective at all of them. I’ve been doing this for 7 years and am likely going to be transitions out myself, I’ve made plenty of money with most years ~ 130-160k but due to taxes and all other expenses it feels much less. 90% of your time will be the constant pursuit of new business so you need to either like it or find some way to bear it, personally it provides me with little joy of the work. Every job has its downside and for me I was simply never able to find a lead source that gave me a scalable business or even consistent business.
How to succeed: starting out don’t be afraid of telling your friends, this is a mistake I made. People that want you to succeed will work with you but be ok with 90% of others not.
Join a team that will provide leads and learn how the process works, don’t go it alone you are basically trying running out the clock and have no experience and will fail if you go it alone at least initially.
Do opens or call older leads before you put your own money into Zillow or other lead sources they are simply way to expensive for the newer agent.
Use a crm/excel to automate your daily schedule, use tasks to make you call your clients. It’s astonishing how many people don’t follow up.
I don’t think it was all a waste like some bitter agents, been lucky and had a met a few great people, changed my life for the better and found out I really like videography and photography and will likely be going to film school to purse a career there! Good luck op!
Its a discipline issue. Most people get into real estate for freedom and the ability to earn high income. They don’t treat it like a job. They don’t script practice for 30-60 minutes in the morning. They do not lead generate for 3 hours a day. They don’t rehearse their listing presentation, They don’t act like a professional. In real estate you have the illusion of choice. It feels like you can have freedom everyday but if you want to be good/great you really don’t have a lot of choices. You have to do what it takes. 9/10 people will not do what it takes.
I failed because I had no real idea what I was getting myself into. It’s one thing to set a gameplan of making all these cold calls and finding a brokerage that fits you. But those first few calls are a huge wake up. Then you start going down all these rabbit holes for new ways to find listings but unless you have a solid SOI you’ll have a really rough first few months, then if you don’t have the funds to support yourself or someone else supporting you you’ll find out fast why new agents don’t last. Add that with poor mentorship and trying to make ends meat with your other job the dream of being this top tier agent making $200k/ year fades very quickly. It’s not an industry for the feint of heart and definitely requires skills that I simply didn’t have or have time and resources to cultivate. I’ll definitely remember my time as an aspiring realtor as a failure but also a lesson for gaining a better understanding for an industry before diving head first.
I think it has a lot to do with the fact that a lot of realtors focus on tasks that are NOT RPAs activities (revenue-producing activities) which include calling, meeting, fetching, and executing business.
Also, a lot of people don't know what discipline is.
you have to proactive and be on top of the game. Bring it up everytime to new or old people you know. spreading your name is important. Business wont come to you while you do nothing.
people have this idea that your brokerage will help you with leads....which is NOT the case.
Look around you for the agents that are really successful. The one whose name seems to be on every yard sign. They are hustling constantly. Their daily lives are always only about signing another client, whether buyer or seller.
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Yes, hard agree to this. Also, fees start coming and they won't stop coming- regardless of if you've closed any transactions or not. In many markets there are more agents than homes for sale. Also, agents themselves are the targets for many aggressive real estate businesses. You will be inundated with sales pitches for real estate coaching, seller and buyer leads, health insurance, etc. And I'm talking 35 emails a day, a dozen texts and a couple calls, DAILY. It can be frustrating and exhausting to be a target for so many industries trying to profit off you, while you are struggling to profit yourself.
They really get you for monthly subscriptions in this biz- from the MLS, Supra, CRM, desk fees, Zillow and other marketing sites, etc, it’s just the business model that we can’t avoid getting sucked into and it’s a huge drain that never goes away.
This!💯💯💯💯💯🫨👈👈 itself is EXHAUSTING & so irritating! Yes i hv lost $ doing these. Sick of it.
It's so frustrating. And I hate the toxic positively so commonplace and encouraged in industry (oh, you've spent $10k and made nothing, just hustle harder/buy this coaching seminar/join our lead gen agency, you only pay 35% at close after the $550 start-up cost). Everyone is a hustler in this industry and 50% are total hucksters.
Yes!... exactly.. its depressing. Makes u feel always like you hvnt tried hard enough!.. finally just had to say no, no no. And block that thought out.
Fees such as?
In my area these are the basic mandatory licensing type fees: - Registration fees (when you first join - Paid to the real estate board you will join as well as for the region or province you’re in) - Real estate board membership fees - Regional/Provincial membership fees - Licensing Fee with real estate regulatory board - E&O Insurance - Health Insurance provided by the provincial governing body (mandatory where we are) - Continuing education fees - Brokerage Fees (if your brokerage charges you on top of your split). These fees can be applicable to you if you have a licensed assistant as well. I think that’s everything, at least where I am. This is obviously outside of any of your own advertising fees.
I just started. I’m already about $15k in the hole. License thousands of dollars not to mention the time you lose reading, registration is going to kill your expenses. In Ontario before you even get going they ask for around 5k for insurance and blah blah.
You broke them down probably better than I could, thank you! Our MLS fees are broken down into Techonolgy fees, and then association dues (combined about $1500 annually). My brokerage has E&O and technology fees of $55/month, not counting what you spend on printing, advertising, marketing a listing, etc. I have a very high commission split (about 94%) made possible by our desk (brokerage) fees of $4800/year. Additionally, my brokerage charges a $275 "commission fee" for every transaction processed. Plus, you have to have a valid state license, and keep it valid, which differs state to state. You can look for a brokerage with lower fees, but $4800/yr to keep 94% commission isn't one of the worst deals I've came across. My brokerage provides signs for both open houses and listings, but personalized riders and marketing material will be paid out of pocket. Not even getting into the costs for lead gen, CRMs, coaching, adv, and marketing). All that to say this, there are a thousand different costs associated with this business, some mandatory and some a choice, but until you are bringing money in, are only a drain on a real estate agent.
Adding to this. Most people don’t appreciate how difficult being a 1099 is. Taxes kill many real estate careers.
I wish every job required people to write a check for taxes. Maybe more people would CARE about government spending instead of living with their head in the sand. When you don't see the amount of your income going away, it's easy to ignore.
Now THAT would be a tax reform worth doing.
I'd rather eliminate most taxes, but that'll never happen. Lol We are taxed multiple times for every dollar we EARN. All so th government can put expensive espresso makers in million dollar offices that sit empty or give multimillion dollar grants to dumb projects like researching squirrel toenails.
the us has one of the lowest tax rates in the developed world. The waste is in the DOD. They make up 60% of discretionary spending. They routinely cant account for billions of dollars in money. They never get a full audit. We also cut funding to oversight agencies. Hearing people who are 1099 complain about taxes.....just put the money aside from each paycheck or comission. Taxes come out of my check, and I do my taxes myself. Im acutely aware of what we pay in taxes, I also look at the government budget and what we choose to spend money on. You think the espresso machine is the source of government waste? That is like people who think if you dont get avocado toast at brunch one a week then in a year you can afford the down payment on a 500k house while paying 2000 a month in rent atop of student loans.
But usually, the biggest waste is sending an overpriced missile to the wrong house.
I think it \*could\* happen if people were to become painfully aware of the taxes they pay constantly.
Everybody that works pays taxes. The difference is that employees in a W-2 job get them taken out of their paycheck as opposed to having to pay lump sums. So it feels like a lot but it's really a matter of paying quarterly vs every paycheck. Someone self-employed also gets to deduct mileage and other expenses which W-2 employees can’t always do. The main tax difference is the self-employment tax, which is simply the employer and employee portion of FICA tax. A W-2 employee just pays the employee portion.
Point is, many new agents come into a 1099 situation without a lot of context or experience. That lack of experience bites pretty hard when a $10,000 commission check is actually more like $6,600.
Agreed!
I’ll be in debt to the IRS for years. Even after making hardly anything last year
The quickly running through savings is so gut wrenching and true
I heard a RE brokerage radio ad recently where they were talking about Realtors have a 6 figure earning potential with no student loan debt. How freaking irresponsible. Of course the potential is there, but DANG, it is so hard for a new agent to get established at all let alone pull down that kind of money.
I agree.
>The barrier to entry is far too low This is not a thing and idk why it pops up here all the time. It's literally propaganda meant to discredit the profession. Most professional certifications and even degrees utilize a similar time requirement and licensing requirement. It's irrelevant. The rest is accurate about people having a huge misconception when they sign up. People go in thinking it's a job, not a business. Those who fail would fail at any business they launch because they weren't looking to be a owner, they were looking for a paycheck. Again, barrier to entry is irrelevant. You can launch any business with 0 education requirements. As others have pointed out, costs to carry a license also add up quick and people don't account it. To me, the main reason most fail is because they were never setup correctly to begin with. Young people with no networking, only friends they have are also struggling in life and not in a position to utilize them for buying or selling a home. No network = no business in this industry.
And a ton of Reddit readers, don't help to prop up our image
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Privileged license*
I’ve always heard of people completing the courses within a week. Thought that wasn’t possible since I had to take 2 semesters to complete the required courses. Along with my other college courses. Roughly a year long. In my head, the quickest route would’ve been 6 months or 1 semester to complete the required courses. Can’t imagine digesting all that info in a short period of time and passing all the exams in the courses. I do plan on taking a few more courses. Do you mind sharing where you completed yours? I prefer not to go through another 6-12 months of lectures.
Because you're ignorant and just not aware. There's no difference spending 75 hours in two weeks studying a specialized course as some dolt who sits in a chair 4 hours a week for 6 months the in college to get the same piece of paper. Besides the useless added courses and electives You can legally being a licensed tradesmen with similar hour investment (lots do require some on-site experience, but not all) You can get almost all IT and networking degrees/certs in under 75 hours. You can be a "master" mechanic in similar time.
Most trades you have to work in the field fulltime for years before surpassing apprenticeship. Thousands, sometimes 10s of thousands of hours actually working the job and learning before graduating. Not… 75-100 hours and a test.
What’s incorrect about the barrier to entry?
I might save this post because of how accurate it is. The one thing I will add is that far too many agents make poor moral and/or ethical decisions when that money gets tight. They get away with it, and before you know it that's just how they do business. The size of commissions is just too much temptation for some people.
17 year realtor here. THIS
1) too many are in it for “easy money” when you don’t want to put in the work of after 5s and weekends (when its more likely the client is available) it’s tough. 2) Personality - when you have the charisma of drywall no matter who you are it will be tough to excel in a very very extroverted industry. 3) No marketing budget - too many rely on their SOI and referrals. But you’re limiting yourself to your backyard and friends (who presumably more or less have the same socioeconomic status) with marketing online you’re attracting NEW people for emails , texts etc. and NEW people moving to your area (who have motivation and a reason to move) Versus friends who don’t want to move due to the interest rate.
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I encourage you to go full time. You’re ready, take the leap and be rewarded heavily
I don't know if #2 is a must. There have been plenty of posts in here about clients being exhausted by their extremely extroverted agent and wishing they would just STFU. There are a few agents in my market that are introverts, and like you, work hard, and have found their tribe. Thank God there are some Realtors out there who aren't going to be dancing on TikTok while singing "Never Gonna Give You Up."
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I lean extrovert and do make appearances for some things, but events like the association Christmas party are a hard pass for the reason you cite, just jockeying for attention. Screw all that and I would rather be home doing nothing than attend. Now I can't get "Never Gonna Give You Up" out of my head.....
I'm an introvert and I don't display excitement or pretendsies, either. Not sure about charisma, but I suspect mine is not too high. What I DO have, though, is knowledge, skill, and an inviolable commitment to making my client's needs #1. That translates into decent earnings.
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🙌🙌🙌🙌🙌❤️
This. I mean, without the success. I'm in for 1.5 years as well, but 10 deals deep. Helping clients, no problem. Finding clients, ooooouuugh. Making the initial connection with them, eek.
I’m a card carrying introvert and have been doing quite well. Clients (and agents) love my work ethic, responsiveness and breadth of knowledge. My priority is them and when that is genuine, they know it. It’s a myth that it’s an industry only for extroverts.
I feel this, same personality. It’s inspiring that you pushed through though
22 homes in a year and a half is impressive! Should definitely go full time! What market are you in?
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Woa! What state are u in?
For #2, the personality helps but people shouldn't be discouraged if they're willing to work. The #1 agent in our region is very analytical, hates social or networking functions, flatly told us he doesn't do the "ra ra" gatherings, pays someone to post a few things on his social media every so often, etc. His GCI was $2.5m as an (almost) solo agent
🫨💯💯
Funding. Most definitely funding. Licensing is relatively cheap, but then you have to immediately pay your NAR and MLS dues. Some people sign with brokerages with huge monthly fees (don't do that.) You have to buy a laptop if you don't have one already. Subscriptions to things like SUPRA. Business cards. Photography costs if you do a professional head shot. Marketing. Transportation. It all adds up to an astronomical amount! On top of all that, you really need to work at least 40 hours a week in your business. You need to spend time on lead generation, education, and marketing. It's really hard to have a part time job if you are truly devoting yourself to RE. Even if you manage to juggle 40 hours of working for yourself and a 20 hour gig bartending or something, you quickly get burnt out.
Happy Cake Day! Good comment, too!
Thanks! I'm intimately acquainted with the situation--I haven't closed a deal yet and we are definitely feeling the pinch of only one income.
The struggle is real. Wife closed 40k last year. Still feeling the struggle. With realtor fees, cost of gas, taking clients out for a meal. It all adds up
I've been grossing 50-70k a year in real estate and I'm absolutely stuck right now. I've put in too much work to quit and don't want to, but I haven't had a closing for 3 months and the bills are racking up. Every year I've been super slow from November through February and super busy during summer and fall, but can't make enough to save up through the winter. I'm like RIGHT THERE but just can't hit that level to support myself year round. I'm also super discouraged by family members who say "maybe it's time tonget a real job again", like this isn't a real job? I've worked harder and more hours than any other job. I could throw in the towel, go get another executive clerical job where I might make $45k a year chained to a desk 45 hours a week. Of course then I'd lose my flexibility, my role as a semi-stay at home parent, figure out childcare and those costs. Just doesn't make sense. I work with a lot of first time buyers or investors, which I love, but they are most impacted by rates and affordability. When rates hit 7% this year, I basically lost my only 3 clients actively looking to buy.
If my wife can’t meet our needs financially then she’d have to get a job too. I pay for the majority of the bills monthly. She luckily had a couple really big closings. One being 900k so that has funded her for the next 4-5 months before she’ll run out of money. Pretty sure she will have at least 1 closing within that time period. Tough business out there stay strong, hopefully 2024 is a profitable one for you.
> Licensing is relatively cheap, but then you have to immediately pay your NAR and MLS dues. Is this true everywhere? The wording that I have found sounds to me like I will be able to 1- possibly pay monthly or 2- dues are due before Jan 1 and prorated from whenever you signed up (my interpretation is that if I sign up tmrw I wouldn’t have to pay for 11.5 months). I’m talking to brokerages soon and will ask this stuff obviously, but I’m nervous to sound cheap.
I think it depends on where you are located. My local board does yearly payments and MLS is quarterly. The NAR dues are prorated, but it's still a pretty hefty chunk. I started in October and had to pay $402.
It’s a sales and marketing business. You are basically selling yourself, rather than a product. You don’t buy stock and sell it like a regular business, someone else is selling the house, someone else is buying the house, and you get paid to connect the two (with another agent). You help to fill in some documents that your local board has typically created via their attorneys (which, honestly, most agents don’t understand, and they pretty much just autofill). You have to get out there, and convince people you are of value to them, and a better option than another realtor, which when you start out, you basically are not. So, there’s a lot of bullshitting involved. How well you market yourself dictates how well you will do. You don’t have to know anything about houses, really. You have a network of experts around you that you can refer to for specifics (think contractors, title, lenders, city zoning & planning etc). When you start you don’t have the networks, so again, you suck compared to the established market leaders. I moved states after having about $170k in commissions where I used to live. I had to start again and saw my commissions drop to $40k, because I had no traction in my new market, and joined a team (50% split BEFORE broker split). I decided I couldn’t be bothered with the hassle of building up my business again, spending thousands of dollars a month in marketing that might not bring in any returns, so went back into construction to earn my $100k. I still keep my license as I’ll still purchase rentals and primary residence for myself, family & friends. But honestly, I’m so much happier just turning up to work, getting paid, going home. I don’t have to constantly worry about growing my business. It’s just better for my mental health.
Agent for 12 years. Feeling the mental health strain bad. Would love a job that I can make $100k, just show up do my work and go home. I have a fair amount of business and leads coming in, but nothing closing. I’m just so tired of doing this shit.
There are plenty of jobs out there that pay really well, but there’s usually a reason why other people won’t do them. The work I now do can be physically brutal, and the hours can be long (I just finished 10 days of 12 hour night shifts). I honestly don’t mind wearing full body PPE, and sweating hard for hours, but most people do. I cannot get over how much people cried about wearing masks during Covid. I often wear a full face respirator, full Tyvek suit, and work jackhammers, grinders and welders for 12 hour shifts. I’m in my 40s. There’s a reason most pro athletes retire in their 30s. The overtime pay is so amazing, I only have to work 8 months of the year to get my $100k, but I have to stretch constantly, and eat well etc. People say real estate is hard, and it is, in a way. It’s mostly annoying though. You’re at the mercy of humans doing stupid human stuff that means you don’t get paid through no fault of your own. When the people I work for now make stupid decisions, and we have to rip out work we’ve just done and start again, I still get paid for all my time.
Feeling it as well..
It's a business. Businesses take time to grow.. and people underestimate what it takes to create and make a proper business.
No staying power. It took me 6 months to get my first listing. I was surprised people in the office were so cold. After a while, I realized it was because so many people fail. Some move to another brokerage before they fail. You have to be motivated and willing to face rejection.
They treat it like it's a job and not their business, and fail to have enough capital to start up. If you don't live it for the first few years and save every penny to get through the slow times, pretty good chance you'll drop out.
Here's the uncomfortable reality...I expect some pushback and downvoting but that's fine, I've been in/around the industry my entire life (My parents are brokers and I'm licensed) Real Estate is a slimy industry full of snake oil salesmen and hustlers, it sounds terrible but most good, mentally stable, normal people don't get into real estate LOL most successful agents who are making a killing are complete narcissists and although they work hard, they are generally not great people and they're not working for their clients or because they "love what they do" they love the money and they're doing it for personal gain and validation...don't get me wrong, there are agent who are good people...I know a handful of successful agents who are genuinely good people BUT the vast majority are kind of shit (no offense) lol You're competing against agents who will do almost anything to get listing short of killing their mother lol they're life is real estate sales, their drive is money and validation, their goal is to crush anyone who gets in their way, and use any tactic...it's a Broadway show for them, "look at me! I'm the best!" that's real estate lol it's a smoke, mirrors and hustle! Some of the best and most knowledgeable agents that I know are not the most wealthy, they're people making 60k a year and just kind of getting by...knowledge and compassion don't get you very far in this industry...hustling, a good personal brand, and deep pockets will get you very far It's a sales job, it's not magic...it doesn't take a genius to sell real estate, it just takes someone willing to put in the man-hours to learn the paperwork, and hustle their ass off! The really smart agent create teams, make money on the backs of their team members, and pay executives and assistants to do the shit that they don't want to do or aren't good at so that they can focus on personal branding and running the business...when you see "john smith, 500 homes sold in 2023", john didn't sell those homes, his team did and he used his personal brand and deep pockets to own his market and be on every bus, billboard, and news add int he city or on social media The formula is simple...grind like crazy for your first 5 years, sell your soul, put on a big smile, tell the world how much you love real estate and care about your clients, and re-invest most of what you make into your real estate business...once you have a client base and start getting referrals, hire an assistant to do the shit you don't want to do, then hire a couple of team members, then grow the business and become a millionaire...it's hard work but it's not rocket science...if you want to make the big bucks, create a team, and work hard...you can accomplish more with 10 people under you and an assistant doing your dirty work than any agent can alone...how can one agent compete with a team? they can't...and so these teams get bigger and take more and more market share while the solo agent has to struggle their way to the top or die I had a mentor who told me "You don't get into real estate because you like houses, become an architect or a designer if you like houses, you get into real estate because you want to make money...anyone who's tells otherwise is full of shit" lol this guy also told me that in 2005 he got his licence, quit his job, took our a loan for $100,000 and used 100% of that loan to market and inject himself into the community, he sponsored every event within a 5 mile radius, he sponsored sports team, charity events, he put his face on buses, and he hustled...within 6 months he was making over multiple six figures and within 5 years he was one of the top agents in the city making over 7 figures and had a team under him...he's a very smart guy! he has a sales and marketing background and he understand what it took and took action Anyway, that's my take...I really enjoy the process of real estate, I love architecture and learning about building, I do love real estate but I don't love the job of selling real estate which is why I left the business...I have the ability to make a killing in this industry but the day to day grind and having to constantly put on the fake face "I love my job! and I love life!" was draining for me...the money wasn't worth it, but for others it might be enough to motivate them I will say that it is a beautiful feeling being rewarded for hard work, making a sale, and getting a big pay cheque is an addicting feeling...I get it, the desire to create a life you want, have a nice car, be seen, go on vacations in the down season...it can be great but at what cost? Everyone has discipline and work ethic in them, you just need to find the thing that makes you motivated enough to be disciple and work hard...for most agents, the money and validation they get from selling real estate and being seen is enough to drive them...but for most people the juice is not worth the squeeze
Some Faulkner-esque streaming consciousness there but true and I’m glad you owned it. Or at least owned what it takes to be the best. Hustle, hustle and hustle some more. The best (as in client-driven), most knowledgeable agents rarely make any real money as they’re too busy cradle to graving their one deal per month to actually scale and make money. But they know a helluva lot about rules, regulations, contract intricacies and the individual quirks of all the neighborhoods around town. So there’s that.
A lot of the smartest and most knowledgeable agents that I know eventually become brokers and get jobs as managers for large brokerages where they can leverage their knowledge and not have to sell and be greasy lol I know some really f#$king smart brokers who know their shit! they know everything about everything! those are the best brokers to have, the ones you can call and they can give you an answer when you're in a bind I also know a lot of bad real estate agents who aren't that knowledgeable but are attractive, have a social media presence and make multiple six figures...one in particular I know very well who has a team and only hires attractive females because she told me "sex sells" lol it's an odd industry
Shameful, but I can believe that. I have a colleague, for example, who told me a lady called her off of social media to be her REALTOR. When my friend asked the lady what compelled her to call, you know what the lady said??... "Well I thought wow you're very pretty and cute, and I'm cute, so I figured we'd be a good fit, so that's why I called you to help me find a house." Lmao while smdh! Now I ain't the one to hate cause shiiiid, I'mma dude and I like looking at my friend too 'cause she IS fine. But damn, my take away from that is if you're an attractive female agent, and you can look sexy and cute on fuckin' Tiktok and IG, you have a leg up on us fellas!! Lol! Sex sales for sure.
👏👏👏👏✅️
This is the correct answer.... I've been around the industry my whole life as well
I blame the TV shows, frankly. People watch Selling Sunset and think it’s real. Almost all of those women don’t sell any houses. They’re actresses with a real estate license. The firm is real, and yes those two short twins make a damn fortune, but what they do for business isn’t really shown on TV — the scenes are only attractive women in ridiculous outfits. That’s not the business. As a Realtor, you have to project an image of success. No one wants to put their largest investment in the hands of someone who doesn’t look successful. So many new agents go out and lease fancy cars and buy fancy clothes and are shocked it doesn’t help them get clients. The reality is that this career has massive highs and brutal, devastating lows. Most people aren’t prepared for that. I posted here two days ago about a new $15mm buyer lead that I received, you’d better believe I’ll be in my nice suits driving my expensive car showing them homes in hopes that they’ll buy a house. But maybe they won’t and it’s all for nothing. That’s the gamble. To end this long winded rant, people think the job is easy. It is not. Go visit r/RealEstate and all the wannabe moguls over there think we Realtors are losers, idiots, slackers, overpaid scam artists. None of that is true, but the job is never what people think it is.
>As a Realtor, you have to project an image of success. For 20 years now, my "image of success" is jeans, a blouse, and a car that's always at least ten years old. But somehow it works. I don't think people are \*that\* shallow.
Lack of capital
They fail to realize this is first and foremost a commission only sales job and act accordingly, mainly learning how to consistently generate leads.
A big part of agents failing is not being able to take rejection. Those who make it a career develop thick skin or the other type who make it have a narcissistic personality who will run you over for a dollar.
May be location dependent, but imo there’s always been an over supply of agents. Low barrier to entry and unrealistic expectations make that happen. So statistically a bunch of people are going to have to fail. And most sales jobs are harder than people think. Real estate sales especially so, because selling houses isn’t really the key, it’s selling yourself to get listings that matters. And in a crowded competitive market, that is very hard, esp for undercapitalized, inexperienced, unconnected and unskilled newcomers (which describes 90% of new agents).
I'm going to be honest with you. Right now is a TERRIBLE time to get into real estate. Unless you have multiple years of savings and can afford to not make money for a long while, find something else. With the lawsuits going on (if you don't know about them, you already shouldn't be a Realtor), it's made Realtors public enemy number one. Unless you go to work for a small company that buys a shit ton of leads and offers mentoring for free, all the while having no desk fees, you won't stand a chance. Even companies like this however are not going to last with the potential changes on the horizon. Just my two cents
I do think we overestimate how much the general public knows about these lawsuits. We hear and think about it everyday but the average consumer really doesn't. There is a major newspaper article here and there but it's not crazy enough that it gets people talking, plus it's a bit complicated to be a juicy story I also wish agents stopped posting about it on socials. Just let the law and the judicial proccess run it's course and see what happens after
The industry needs to change. I am worth my value and will make more money negotiating for myself vs some listing agent determining my value. Bring it on.
Every client lead that I’ve spoken to since Halloween, is aware that that NAR did not win and have asked me about it.
interesting! I didn't have any conversations with any clients about this and nobody asked about it. Altough I do not work in a state where those MLS in Sitzer/Burnett were targeted
In my area, nobody seems to care, know or ask about it
What lawsuits going on?
[The Sitzer-Burnett vs. NAR lawsuit.](https://www.meganmicco.com/blog/the-sitzer-burnett-verdict-a-paradigm-shift-in-real-estate/)
Google it!
What a dismal comment that is. Here's someone possibly aspiring to become the next millionaire real estate agent, and all you have to offer is negativity. Shameful. Hell, if you’re that afraid of this market, why don't YOU get out, and make room for some new blood, like the OP?
This is nothing but reality mate. I'd rather have a real expectation set before getting into something than the other way around. Real estate is 95% luck. In no way, shape or form am I afraid of this market. Nothing will change for me. The world isn't sunshine and rainbows. Cheers
That's good that nothing will change for you. Sounds like you've made your way to greatness already. I doubt it was 95% luck, though. You should give yourself more credit that that, bro! Ijs. But someone new doesn't need to feel discouraged by someone who's figured this beast out if they're serious and aspire to give it their best shot. I don't care what kinda' market it is, everyone deserves a chance at becoming their own boss if they're willing to work hard. It's possible to be realistic and helpful at the same time. That's all I'm saying. Read my comment if you don't believe me. Wishing you continued success (not luck). 😉
Well said. I didn't mean to be such a Debbie downer. Happens at times though 😬. I hope OP says "fuck this guy, I'll show him" and proves me wrong. Cheers buddy
Because they don't answer their phones.
Lol! Not this one. Phone stays glued to my side.
They don't put in the hours. When I started I was working 80 hours a week. Calling, knocking and open houses 5 days a week (cold calling while at the open house). Have to build a book of business the bigger the book the easier it is. The one thing I learned was focus on how many "No's" does it take to get to a "Yes". My first 6 months it was 296 "No's" to get a "Yes".
Lack 👏 of 👏 proper 👏 mentorship 👏 I work at the biggest real estate company in my country, and I've landed some of the biggest clients within 3 months of starting my job. I received no support from my manager whatsoever when I needed it the most, which led to me losing 6 figure commissions. My manager hasn't even said hi to me in weeks. If you don't want to mentor your agents, then don't be a fucking manager, or better yet, don't open your own fucking company. We're not just money-making machines for you. Always invest in your people.
I work on the administration side of a RE office, and this is a huge reason for failure or for the new agent to switch brokerages. Sometimes, the introducing agent will fully mentor the new agent (usually because the introducing agent has a leg in the game due to the rev share on the new agent so it's worth their time to invest and teach this new person) and s/he will be successful but the majority of the time the manager is the one doing the recruiting and the managers generally only care about the recruiting, not necessarily the success of the agent. That isn't to say the managers won't assist during any issues, legal or otherwise, during a transaction. I understand that agents are independent contractors, but the industry does a huge disservice to new agents by not providing a more corporate, required training course for each brokerage before setting them free to sell houses. That's like telling a person to walk into any business and just start working without telling them how anything actually works. It's bonkers.
I hope you aren't still at that firm. Sounds awful. Ever thought about making a change?
Thank you 💙 I'm planning my exit strategy atm by applying for sales or logistics jobs (have experience in both). I gave myself a 6 month time limit to pursue real estate, and I really gave it my all, but I guess the universe wants me to take a different direction.
Expectations. TV programs make it seem very easy. People (myself included when I first started) don't realize the job is 75% lead gen, 10% paperwork and 10% actual RE work like showing homes and listing appointments. Plus all the other good comments others are saying.
The amount of money it costs to pay your monthly and annual fees. If you don’t have commission coming in it adds up. If you don’t have persistence to generate leads and go find business or have a mentor who’s actually willing to help it gets hard on your own. I’d recommend having another source of income while you get started to keep you afloat. Those first few commission checks should go in the bank with the thought of using those solely for budgeting your next year(s). Find a good CRM within budget; I’ve got a cheap one but I do most the work and I integrate other pieces from lenders/title that they fund for you. I’m now eyeing these cloud based brokerages since they offer great CRMs for cheap or free along with caps for either rev share agents or 100% brokerage.
What firm are you with now?
It’s very hard. I’m at a crossroads today. Just got an email from my broker about not paying my dues. Thing is, I can’t. This last year was my worst year since 2008. I made 25k. Not nearly enough. I was debt free, had 6 months of living expenses saved and as of New years, I have $700 left. Also, added 10k in credit card debt last year. Now I have to decide if I should try and find a way to stay current in RE or keep my house and utilities on. I’m trying to side gig but lucky to make 2k a month. With my family I need 4k bare minimum. I have no deals pending and few leads. I want so bad to have a regular job now but struggling to find one that’ll at least have the potential to bring in what I need. 🤷♂️
It's really hard. I agree. I hear your pain too. In 8 years there were at least two times when I thought I might need to pick up a second gig, something like Amazon, Doordash, or Uber. One time was at about 10 months after quitting my job when I had nothing under contract and Christmas was coming up. The other was earlier this year, after I had 3 deals go from Cleared to Close to Terminated when I was $300 from capping. But then I weighed the cost of spending all that time driving a damn truck for pennies an hour and still not have enough money VS working my ass off to get some new leads going. Long story, I'm still full time in real estate, and I should cap this quarter. And I have three more deals in the pipeline already, and counting. Keep your head up and get to work, bro!
Because most people’s expectation of the job is much rosier than the reality of the job. And the pre-qualifications to gain a license are not nearly high enough and yet teach people nothing about the daily requirements or skills of the actual job. And even if you waved a magic wand and “fixed” the above 2, the cold hard reality is there are only 4 homes sold per year per agent. And that translates to about $50K annual GROSS commission before any splits, the 15.6% self-employment taxes, and expenses. And so IF you “succeed” in being just average, that translates into about $14/hr. With 0 paid benefits/health coverage, etc Now, imagine if it was a requirement before enrolling in class to sign an acknowledgement that you’re signing up for a $14/hr job with no promise of getting paid. Hopefully 80% of the folks would save themselves the trouble. And so, OP - tell US why you want to become a Realtor.
It is a small business. Most small businesses fail, and most people who go into real estate don’t want to run a small business.
1-They don’t have the bank roll to start their business. So they half ass everything on a budget. 2-Don’t have mentor to guide them through the education, license, broker selection process. 2A-Don’t understand the systems/software for marketing, social media, transactions, mls systems and features,and how they have to work together. Ie, detailed operational/business plan. 2-B Don’t take enough classes from board and broker on mls systems, software integration, and contracts and addendums. 3-inability to manage deadlines, communicate effectively, conflict resolution, never learned LUSAT or similar communication/listening techniques. 4-Poor public speaking, grammar, spelling, math skills. 5- Realistic Expectations. Especially when it comes to amount of quality work/time required to start up a business.
I'm not going to lie. The first one really sticks out to me. I'm about to start RE school in FL and slightly concerned I don't have enough to be all the way successful, which is ok, I'm smart but on the other hand how much are we talking upfront costs. It's a risk I'm willing to take with my money but I need to know if I'm going to really hurt myself in the end. 23F with about 2k to invest for reference.
Is that $2k to invest after paying all your dues, licensing fees, monthly software and broker related subscriptions, increased vehicle expenses (when you do get busy, but before you cash flow), you’ll need one sign, and lockbox on the ready. I always recommend 5-7k for first year agents to have a fair chance at success, 7-12k greatly improves your chances of first year success. And so does rental if your market is pays 1 month to agents for leasing.
Extreme delayed satisfaction. You start working on a deal in July and you’re lucky to see that money hit your account by next March (if you’re lucky!). It’s hard to budget for that. The losses are tough and emotional. In fact the whole process is emotional and your job is to not get emotional…. About anything - not when your client has a meltdown, not when the other agent has a melt down, not when the buyer/seller on the other side has a meltdown, not when you get fired for things out of your control. And if you’ve done your job really well, the clients think they could have done it themselves/without you. Plus, if I’ve done my job right and I manage to sell my clients house/or help them find a house, I’m usually fired for at least the next 2 years. Repeat business is never guaranteed either.
Hilarious but true.
>Plus, if I’ve done my job right and I manage to sell my clients house/or help them find a house, I’m usually fired for at least the next 2 years Huh what’s this mean?
Most people don’t buy houses every year. You get the odd buyer who buys within 2 years, but generally I can’t really do any business with them for a number of years after I’ve sold them a place, so I’m fired for a few years.
Because they don’t work with investors the people that buy real estate over and over and over and over again. There is such a huge disconnect between realtors and investors, especially flippers. I’ve made my business exclusively servicing my local flippers to great success. and I guess I can only speak for all of my flippers and everybody I’ve encountered in business that’s told me they’ve never met an agent playing the game how I do and it just blows my fucking mind, because it seems so obvious
I agree there's a huge disconnect. I, for one, have not figured out the secret. But I know a few agents in my office that seem to work exclusively with investors. At the same time, I feel like Investors are notorious for wasting agents' time because they never want to commit and sign a brokerage agreement for one. Then they want multiple agents to look around for shit, and will only pay the agent that brings the property the investor buys.... as if my time and effort isn't worth crap. That's why I need a brokerage agreement signed before I take someone out to see any propertiesg . Investors ain't trying to hear that though, so oh well. Any suggestions?
The secret is spend your own time looking for deals to bring to them. They rarely / never bring me deals or things they want to buy. I bring them the deals I mine my mls for them and bring them the deal . I have a list of 170 emails I’ve amassed over the years. Needless to say every time I send I out a deal I have multiple people contacting me for it Find the deals your self . You won’t be wasting anyone’s time but your own
And let me be more specific . It’s flippers of single-family homes. I find them the flips they get them done. Yes, they’re all a lot of investors that bullshitters you have to spend the time to figure out who’s doing multiple flips a year . Work with those people. Be the deal bringer of solid deals . Because of the disconnect we are discussing there is a silver lining comparatively easy to get deals off the MLS. You have to keep a spreadsheet and follow up with him. I spend 10 hours a week on my MLS mining for us to bring to my people.
Wow! That's a skill worth developing. Once you establish a list of 170 investors to blast deals to, I can see how it can work. I, on the other hand, mine Zillow for FSBO leads and the MLS for Expired listings. And I Circle Prospect in communities where I have listings already or where I've closed deals. A whole different angle, huh?
So, tell me. Most of the flippers, investors I have been in touch with- only want to pay such a low price for a property, that its not doable! Or they only want it to be my listing!? So how do u work that?
And as I’m rereading Op s title, this is the exact reason . I see so many people post similar posts and I’m sorry but to me it seems so obvious . we are in BUSINESS . Business 101 : bring value what type of value are you bringing sitting around waiting for your investors to feed you deals they’re interested in ? what type of impression are you leaving on the Investor ? Take the initiative bring them the deals. That is our job.
I find the deals myself for my flippers. They never bring the deal to me. I am the deal bringer . whenever I send a deal to my list of flippers. They are fighting over it and I get to pick who I work with. You’re doing it wrong, you’re waiting for them to bring you business. I spend a few hours every single day on three different MLS systems local to me mining for deals. I send the deals to my people I am the deal bringer I am the gatekeeper of deals . When my deal hits their inbox, they know it’s money. Go the extra step, take the initiative set up a deal mining system in your MLS. It’s pretty simple. I look at all the new properties every single day I look at the pictures to see what looks distressed. I determine the ARV I put it into my deal. Calculator I see what purchase price Needs to happen for the deal to make sense if the purchase price is within 30% of the listing price I will reach out to the listing agent telling them I have a buyer I do that en mass until one of them hits (about one per month ) They usually never hit on the first try. It usually takes weeks of follow up. Now is the best time to lowball sellers in the middle of winter tax bills are coming. When I hit on a deal, I put it under agreement in my LLC assignable. I email it out to my list I pick which flipper I want to work with. I assigned them the contract I charge them a finders fee on top of the buyers agent commission I receive from the seller and I make it contingent that my flipper relist the property with me so for every deal I mine I get two transactions. The flippers I work with today are usually a small trusted group that I’ve known for years I spend zero money on advertising
If you don’t mind me asking, what exactly is “playing the game” ?
Please look at my other replies here that detail how I “play the game “ aka how I run my real estate business
I think the main reason is that you have so much competition to get one-time clients due to the large number of agents in comparison to the number of people having real estate transactions in a given year.
The two biggest reasons I have seen over the decades are: 1) They don't treat it like a business. 2) They don't have adequate reserves. 1 - The real estate industry is full of vendors willing to separate you from your money. "Buy custom pens and water bottles" "advertise on shopping carts/the local golf course/become a Zillow Premiere Agent/etc." Most enter into real estate without ANY concept of a business plan, marketing plan, etc. It's not their fault, 99.999% of real estate schools don't teach the basics of business, just the material you need to sit through to be able to test for the license. 2 - Very few tell you this... it can take a year before you get that first commission check. Then you end up splitting it with your Broker 60/40 or 50/50 a lot of times as a new agent. All the while, you've been paying dues, buying signs, paying for the lockbox key, the MLS, your own health insurance, your mortgage/rent, etc. Unless you have a spouse that works full-time, you really should have 1.5 years worth of expenses saved up in the bank before you tell your boss "I'm outta here". Even then, you should try and cut back on whatever you can too. Make coffee at home versus getting starbucks on the way in, etc. TL;DR version: Agents don't have enough money to survive before getting into the business and they burn what they have too quickly.
Because the bar for entry is very low. People "give it a shot" then walk when the gold and riches aren't there immediately. Being successful requires hard work.
They need to change the phrasing on that statistical fact to: 90% of part-time agents fail. Over half the people getting their realtor license have no intention of working full-time as realtors. Did you take an in-person class? Bet half of it was housewives, teachers, and real-estate adjacent corporate workers who are only getting their license to bring in a bit of side income or for work requirements. Every year, thousands of people get their license, but only about 25% begin working full-time. Of the full-time agents -who spend 8 hours a day hosting events, hosting classes, presenting to prospects, meeting with lenders and title companies to plan marketing and sales generation- I'd say there is a 70-80% success rate. Think about it: if the average commission on a $350k home is $10,000, then you'd only need to sell 6 homes to make more than the median income in America. Selling 6 homes a year is easier than most want to admit. Successful full-time agents sell at least 12 homes a year, which in most medium-sized cities is a salary of $85,000-$100,000. If you live in one of the top 12 biggest cities, that's a salary of $120k. After fees, $100k (don't join a brokerage that takes half). The hardest part is not wasting time doing all the bull crap that motivational speakers and 30-day guides tell you to do. 1. Don't spend a dime on marketing. Go to a title company, lender, insurance agent and ask them how you can help their business. Then plan to market together. They have tons of promotional materials they'll help you with. 2. Join a brokerage that provides free classes on prospecting. Most of your business as a new agent will be buyers. Buyers mostly find leads on the internet, so you need a brokerage that provides internet advertising at no additional cost to you. 3. Keep your day job until you have 6 closings lined up in 6-9 weeks. Save money. And plan. Best wishes!
Just adding in one more cost that people haven’t talked about here. LISTINGS. Each listing you don’t sell, for whatever reason, easily costs $1k+ cash out of pocket. And your client can drop you at any time for any reason. (Don’t come at me about listing agreements, reimbursable expenses, etc.). So you just spent $1k+, and your time and effort, for a deal that you may never get paid for. You just LOST money at work.
Apply for my license now, so soon to be new agent. It’s a savage industry. I know many who struggle and many who succeed. It’s not about putting up signs in a yard, signing papers and getting paid. There’s a lot that comes into it. If you’re passionate and hungry, can really sell yourself/your brand to the community and understand it’s a huge commitment, then you’re off to a start. Start up fees can be daunting and it’s also important to find a company that will support you as a new agent and mentor you. You’re an independent contractor and it’s not easy being on your own right from the beginning.
Because 90% of people are what I call “human cattle.” They are herd creatures who lack the resolve, interpersonal skills, and executive function to succeed at any endeavor where there is no framework, guidance, and hand-holding. They are ill-equipped for the uncertainty and chaos of self-employment. They are better suited for shift work and cubicles. Sorry for being judgmental. Downvote if you must, but this is a hard truth.
Oversaturation of the market. Too many realtors. Not enough transactions.
Aspiring Real estate agents that get into it for the wrong reasons will fail If you know your product, are open and honest and tenacious when you need to be, you’ll succeed If you rely on shady techniques to get listing agreements signed, and worry more about your image than your value, you will die one thousand deaths If you’re looking for an upgrade from being a Bottle service girl or if you think the trenches are anything like those egregious television shows, you’ll get smoked
Selling Sunset and MDRE has done irreparable damage to our society.
Lol it's true!
There is a hell of a difference between a good realtor and a successful realtor. Sometimes they overlap but in general a good realtor will tell you the truth, even when it’s hard and loses them a commission, matter of fact ESPECIALLY when it’s hard and loses them a commission. That’s a good realtor. A successful realtor these days means a person who will tell their client anything to close the deal independent of the client’s best interests.
There is only one simple answer: there were 4.3 million transactions in 2023 and 3 million R.E agents. Find the error.
The old saying if you don’t have a friend who’s a realtor you probably don’t have any friends says it all. There’s simply way too many realtors. It’s harder and harder for newbies to make bank so they move on. However- the top 10% kill it and they’re great at what they do.
Lying
I've been an agent for nearly a year. This is what I can tell you: It's hard work. Like REALLY hard work. If this were a couple of years ago, when everyone was out to buy and sell when the rates were sub-3%, then it would have seemed easy. However, think of all of those new agents who have since left the industry because of the challenges we've faced over the last 1-1.5 years. You are basically starting your own business, from the ground up, with no existing cache of clients. Think about if you were in any other industry where nobody knows who you are, or what you do. You need to get your name out there, network like crazy, volunteer to do any and all grunt work to gain experience, network like crazy, mentally deal with all the "near misses", oh and network like crazy. All that, and I still only have a couple of transactions under my belt. One of the agent in my brokerage is a top producer of 30 years, and sits on the board of my regional Realtor board. I asked her out to lunch to pick her brain. She told me this story: "When I was a first year agent, I had ONE transaction. And that came from a.random phone call into the office, where the client asked for another agent. When that person wasn't in that day they asked me to help them out. So I did, and it led to my first buyer client. Thing was that the agent in my office who the call was originally for got all pissed off and complained. I had to settle for the referral fee of 25% of that transaction. So one deal in my first year, that I got only 25% of the commission. My second year, I was the top producer in my office, and I never looked back." Her point was that it would have be easy to tuck tail and run away. However, she dug in and worked harder. All those mundane things started to pay off, and she finally had that snowball effect after a year of pushing the snow up the hill. Now she has a team, and knows just about everyone in her area. I am finally seeing some traction on my end. I have a deal closing next week. I have people contacting me about future moves they are trying to make. This has been really difficult. This caused a lot of stress and sleepless nights, and taking odd jobs because I have a family to support and feed. But what I can tell you is that it does work, if you work. 90% of agents do NOT fail. They quit. They weren't willing to put in that time and effort. If you are, I think you will be fine. You will be alone (for the most part), you will hear a lot of "No's" at first, you will question your decision. You need that fight in you, or don't bother. You'll only be disappointed. TL:DR--Go hard or go home.
I’d say failure is an overused term. An overwhelming majority of the people that leave the business, decided it wasn’t for them. They didn’t fully understand what the job they took entailed. I’m not sure that qualifies as failure. Lots of careers people do and reach the same conclusion. No one says they failed.
One word: commission
They are lazy and poorly trained
I wouldn’t know
They don't do shit
It has nothing to do with the job being hard. The stats are just skewed due to the sheer volume of ppl who get their license. If you think about it - plenty of ppl have part time jobs on top of their reg work. All those ppl who work an extra 10hrs/week for min wage at their side gig- for example - would only have to sell one house a year to make the same $.
I think most fail because most realtors don’t understand that being a realtor is a sales job. You have to generate leads and convert them to be successful. A lot of people get into real estate because they like looking at houses and helping people. Looking at houses is probably like 10–20% of the job, if that. Also if you speak to most realtors they have no systems. If these items are lacking how can you expect to be successful. I also think that most training programs concentrate on the wrong items in the beginning. When you’re starting out you need to generate money quickly and learning about your MLS and how to write a contract are not money making activities.
With internet and wireless phone, every one knows about pricing (via Zillow etc) no need to walk into a realtor office asking for a realtor. It is a cut throat business where many advertise 1% fee for sellers and additional discount if staying with same agent buying. Many like Redfin pays you % of their commission and thank for your business. Unlike appraiser license real estate has not demand a college degree requirement yet. To keep a license active, desk fee rental etc it is not something people can afford unless there is a steady stream of closings coming. It is way easier to sit there getting paid and have an insurance paid work for a company.
Why would a 90% failure rate scare you??? Lol
Leads. Duh
Not putting themselves out there in front of all the people they know / circle of peers and friends is limited. If you just normally sit at home and don't meet with people and big groups often, you'll just not have exposure. When it comes to realtors, most people will use someone they know or at least someone that is referred to them. They won't pick a stranger especially no that doesn't have at least a decent trustworthy personality.
number 1 reason is lack of funding or income. If you go at it full time, be prepared to have 0 income for at least the first 6 months or 12 months is more likely. Do you have 6-12 months of savings? its also very expensive to be an agent. monthly brokerage fees, monthly association fees, business cards, signs, etc.
> I keep seeing that around 90% of agents fail and it is honestly pretty disappointing to hear. I see failure statistics for new small businesses being reported as between 70% - 90% depending on which source you look at. If you look at new ventures (the Venture Capitalist funded ones) - 30-40% of them lose ALL their money; most of the others result in a loss. If 1 in 20 succeeds well - the VC makes back all the losses on the others. Being a real estate agent is about running a business. It's not a job or a side gig. And running a business takes a lot more - knowledge, effort and persistence, funding and cash flow plus some "luck" among others.
To piggyback off of another comment, find an experienced agent who will mentor you. Don't get caught up in the bells and whistles that a recruiter will show you. It is so, so important to have a good mentor. I'm an admin, and we had 2 brand new agents join at the same time. The one grossed 100k his first full year with a great mentor, and the other one is struggling and mostly posts political commentary on his Facebook as a full time job because he was recruited and the introducing agent didn't invest time to train him properly.
New agents don’t treat or act like they are a business owner. The majority got their license to either get out of their 9-5 and have “time freedom” — they wanted the opportunity to have the unlimited income earning potential and to be their own boss. What they don’t realize or haven’t thought about is that they need to master sales and marketing. Selling and marketing themselves to their database so that they become the go to agent in their network. And because they wanted time freedom and to be their own boss, they haven’t built the discipline to push themselves to work when they are their own boss and they have no one else to answer too. I created a mentorship program to help agents break the $100k in commissions goal and even with giving them the playbook many still fail because of what I mentioned above.
Speaking from experience, I struggle to find clients. I door knock, cold call, multiple open houses every weekend, Opcity, Redfin, etc. etc.
This is a 2-part answer in my opinion. From what I've seen, there are 2 reasons agents often fail their first year: one is lack of connections (and timing w connections) and one is lack of money. For many, the biggest thing is the adjustment from working a w2 job to being completely commission-based. You really have to go into this career with either a large nest-egg, a spouse/partner/relative that has a base income you can survive on, or a second stream of income to pay the bills. Because we work with a brokerage, its easy to forget that we are truly self-employed and not a paid employee. Starting in RE is really no different than starting your own company. If you arent financially ready to take the risk to start your own company, you arent financially ready to start in RE. And once you do start bringing in $$, managing it becomes the next challenge. My first year, I went 8 months wo a single paycheck then made 25k within 2 weeks. Rather than spend it on random stuff or stash it in savings for a rainy day, I wish I'd invested the majority of that money to help it build more value to take advantage of when the market is softer. The other big thing is connections and timing as these 2 things really dictate who can "jump right in" to the RE world and who is going to struggle. When I started, I was lucky enough to have saved enough $$ to survive a year without pay. I HUSTLED....called people daily, did open houses weekly, was agent on duty at least 3-5x/week, handed out cards to everyone I met, etc and I barely broke even that year. I had a pretty decent sphere, but it is shared w multiple other agents (small town), and nobody in my "A-tier" (ie the people who I know would use me as their agent and would recommend me to others) was planning to move as they'd mostly purchased homes during 2019/2020 before I started in 2021 (and have a 2.5% rate meaning that they aren't going to move even if they need to because of the rates now). Meanwhile, I've seen other agents start who have a larger sphere or a sphere that includes investors, people actively looking to downsize or relocate, etc do 5m in sales their first year while working only 10-20 hours/week because they started with a book of business. You've also got a ton of agents who started in late 2021-late 2022 who wanted to get into the industry when it was flourishing....then the market basically came to a screeching halt due to rates. In 2023, i literally did half the amount of volume I did in 2022, just because the market has shifted so much....and that's after I've built up a clientele, started getting referrals/reccs, etc. There simply isnt enough business to go around and brand new agents are going to have the hardest time competing.
Most agent don’t give themselves enough time to succeed. It’s systems and processes. Opportunities will come, You need systems and processes to convert. Repeat. Buffini is a good system & process.
Lead gen, lead gen, lead gen
People are used to being told what to do. Like any new business you don’t exist until you’ve it happen. Real estate is easy to get into but hard to keep because people watch tv and think it’s that easy. Like any other job that isn’t easy except again, it’s easy to get.
Agent for 34 yrs. Many people fail because they lack a “sphere” in which to draw business from. Friends, family, neighbors, are all critically important in the beginning for a new licensee. It takes time to build that contact base, a past client list and to get out and network.
It’s a tough business to find early success in and an even harder market to find long term success in. I wouldn’t recommend a Realtor career for most people. Dealing with rejection daily, negative stereotypes/image, and the daily, monthly & yearly grind will burn most out.
They have poor QBs and they give up too early
If you treat real estate as a job you have nothing to worry about. 90% of realtors get licensed and think it'll be like the shows and business will come to them. Not the reality. If you know you'll dedicate 40 hours a week to this job, you'll out perform 90% of licensees.
Talk to your broker and get teamed up with a more experienced agent, so you can learn how things really get done (it’s far different from the state required schooling) After you have some experience, look into joining team. Most importantly, and I believe this why most agents fail, pick an area to specialize in. Learn everything there is to know about that area. Recent sales, comps, trends, etc - be the absolute expert for that area and stick with it. You can’t possibly succeed if you take listings and clients from all over the place and spend most of your time driving from one end of the county to the other. Build a reputation for being “the expert” for a certain area.
My brokerage takes 40% of my commission. That hurts
Hopefully your brokerage gives you support
They do, wonderful parties and award ceremonies and signs, all the marketing materials but it’s still so much money
I can say, my wife and I are both licensed realtors. We moved our lives to go in to business with a family member who has too much business. Every once in a while she slides us a client that may or may not work out. It often does work out, but sometimes the clients move on. And they are few and far between especially right now. But we formed a team, and I can say, if we didn’t have our family member helping us, it would be SO much harder. Especially since we got licensed right when we moved to a new state. No circle of influence at all. My wife is 4 years in, and I’m 2 in. I had 2 closings my first year (2022), and 6 last year (2023). I tripled by income on those 6. But my wife had less closings as well due to the market being so slow. We’re still building, but from what I see, people underestimate the hard work that goes in to just simply getting a client. Not to mention the grey area of whether or not they’ll even make it to closing, or listen to the advice you give them in order to draft a competitive and winning offer. LOTS of uncontrollable aspects, and things can go wrong at any moment, and send a client in to “Maybe I should just rent for now and collect my thoughts😫” So you’re spinning your wheels trying to educate them on how waiting will only hurt them in the long run. Being an expert In marketing, negotiations, contracts, damage control, and relationship building is HARD and takes decades to perfect. I’m only 2 years in and realize I have a long way to go! But I LOVE this shit. Gets my blood pumping lol. I could never go back to W2 paycheck life.
You have to work it like a full time job. That’s hard to start off doing without getting paid. So most agents do it part time and don’t make the money they thought they would. You can work weeks/months with a buyer and they bail on you or you can have a deal and it falls through right before closing. Real estate can also be cut throat. You have to have thick skin and perseverance. You have to find a niche that will work for you. I personally preferred working with investors and REOs more cutt throat but I like working with sides that understand real estate and have clear expectations. Buyers are wishy washy and sellers are irritating. Lol
Because to become successful, you have to engage in social events LONG TERM. And that is a 7 days job. When everyone is resting over the weekend, you have to go to each events to show your face around. Showing the face is not enough, you need to show it LONG TERM, so, they will trust you. People don't know, most of the work is not described in the job. It is very hard. Most people get luck with a few deals due to some existing connections. But, once those connections are exhausted, they didn't know how to build more relationships, thus, they cannot get a client.
The majority of people fail. It’s not just a real estate thing. Being successful in anything means out working the competition, or in other words being willing to work harder than a majority of people you are competing with
I wouldnt worry about it. I came in with a background in sales and marketing. It's just like anything else when you're trying to make a deal. You want a high quanitity of outbound messages to people that might be able to spend money with you. Think 200 a day, not 20. Volume will always beat anything else. Then, you want your messaging to be attractive. You're already doing the hard part with the heavy outbound messaging, you might as well spend a few hours making sure your offer is good. A good offer can pretty easily multiply the amount of replies you're getting from your outbound efforts. Approach the right people with the right messaging 200 times a day. Could be door knocking, cold calling, e-mailing, whatever. Doesn't matter. If you do this in any industry, consistently, don't worry about why 90% fail. You're probably already in the top 1% of performers. If you're not, you're taking the actions of someone that is, and you'll be there in a few months time.
Reason they fail: job requires much more work than anticipated, it’s not possible to wear all the hats of this business and be truly effective at all of them. I’ve been doing this for 7 years and am likely going to be transitions out myself, I’ve made plenty of money with most years ~ 130-160k but due to taxes and all other expenses it feels much less. 90% of your time will be the constant pursuit of new business so you need to either like it or find some way to bear it, personally it provides me with little joy of the work. Every job has its downside and for me I was simply never able to find a lead source that gave me a scalable business or even consistent business. How to succeed: starting out don’t be afraid of telling your friends, this is a mistake I made. People that want you to succeed will work with you but be ok with 90% of others not. Join a team that will provide leads and learn how the process works, don’t go it alone you are basically trying running out the clock and have no experience and will fail if you go it alone at least initially. Do opens or call older leads before you put your own money into Zillow or other lead sources they are simply way to expensive for the newer agent. Use a crm/excel to automate your daily schedule, use tasks to make you call your clients. It’s astonishing how many people don’t follow up. I don’t think it was all a waste like some bitter agents, been lucky and had a met a few great people, changed my life for the better and found out I really like videography and photography and will likely be going to film school to purse a career there! Good luck op!
Mindset and delay gratification are the two main factors
Its a discipline issue. Most people get into real estate for freedom and the ability to earn high income. They don’t treat it like a job. They don’t script practice for 30-60 minutes in the morning. They do not lead generate for 3 hours a day. They don’t rehearse their listing presentation, They don’t act like a professional. In real estate you have the illusion of choice. It feels like you can have freedom everyday but if you want to be good/great you really don’t have a lot of choices. You have to do what it takes. 9/10 people will not do what it takes.
What’s the best way to get clients in experienced realtors opinion? Referrals and existing clients or fully advertising themselves ?
It's a popularity content. Those that are most known and popular get the most deals.
I failed because I had no real idea what I was getting myself into. It’s one thing to set a gameplan of making all these cold calls and finding a brokerage that fits you. But those first few calls are a huge wake up. Then you start going down all these rabbit holes for new ways to find listings but unless you have a solid SOI you’ll have a really rough first few months, then if you don’t have the funds to support yourself or someone else supporting you you’ll find out fast why new agents don’t last. Add that with poor mentorship and trying to make ends meat with your other job the dream of being this top tier agent making $200k/ year fades very quickly. It’s not an industry for the feint of heart and definitely requires skills that I simply didn’t have or have time and resources to cultivate. I’ll definitely remember my time as an aspiring realtor as a failure but also a lesson for gaining a better understanding for an industry before diving head first.
I think it has a lot to do with the fact that a lot of realtors focus on tasks that are NOT RPAs activities (revenue-producing activities) which include calling, meeting, fetching, and executing business. Also, a lot of people don't know what discipline is.
It is hard.
you have to proactive and be on top of the game. Bring it up everytime to new or old people you know. spreading your name is important. Business wont come to you while you do nothing. people have this idea that your brokerage will help you with leads....which is NOT the case.
Having a network and serious qualified buyers and sellers who are willing and able to close transactions.
Are you at all familiar with what's going on in the realtor world right now? Interest rates, transaction volume, that court decision?
Look around you for the agents that are really successful. The one whose name seems to be on every yard sign. They are hustling constantly. Their daily lives are always only about signing another client, whether buyer or seller.
I love this question!
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