The Agent Playbook

A Real Estate Newsletter

Volume 1

The 87%

Why So Many Agents Fail In Their First Year

A career in real estate is an exciting new endeavor that thousands decide to embark on each year. Despite what you've seen on TV, chances are you will not be selling million dollar listings in front of a camera or wearing designer gowns to 1pm open houses anytime soon (or ever).

At the beginning, you will be starting at the very bottom, and if you do it right, your days will be filled with long work hours, numerous hurdles, and steep learning curves. The truth is,?87% of newly licensed agents will not survive their first year in the industry.?Why you might ask? The most honest answer is; because most do not realize how hard it is or what it takes to be successful before diving in.

As someone who has been interviewing and mentoring real estate agents for over a decade, there are certain traits we tend to see and know a person is going to succeed. There is an energy and spark in them. They don't care about the hours or the hurdles, because they often thrive from facing challenges and figuring things out on their own. Statistically they often (but not always) come from client-facing industries (there's a reason we've all seen the bottle service meme) versus sitting behind a computer all day.

It is important to be aware of the reality of the business and challenges you will encounter as a new agent. Below is a list of the most common hurdles that one will face in their first year. If you are a new agent or considering getting your license, this list will help you to better equip yourself with the knowledge and perseverance to overcome some of these challenges. It will also give you a moment to internally reflect and ask yourself,?“do I really have what it takes to succeed in this industry?"

1. Building a client base:?It will often take years to build a full book of business. According to industry data, approximately 80% of real estate agents struggle to build a reliable client base. Without a well-established network or existing clientele, agents must invest significant time and effort into prospecting, networking, and marketing. This can be an arduous task, requiring patience and perseverance.

2. Competing with experienced agents:?The real estate industry is highly competitive, and new agents often find themselves competing against seasoned professionals with established reputations. It shouldn’t be a surprise that nearly 90% of clients prefer to work with experienced agents. It takes time and hours of hard work to build credibility and demonstrate expertise.

3. Financial uncertainty:?The first year in real estate can be financially challenging. According to a survey conducted by the National Association of Realtors,?nearly 65% of new agents earn less than $20,000 in their first year. Agents work on commission, meaning they only earn income when a transaction is successfully closed. This financial uncertainty can add pressure and stress, making it crucial for agents to have a solid financial plan in place. In cities such as NYC, new agents will often begin in rentals, which can bring in a paycheck much more quickly, however they are still starting at the bottom and putting in countless hours to acquire those leads, listings and clients.

4. Learning the ropes:?You made it out of school, congratulations! Sadly, most of what you learned in those 77 hours, you will never use again (sorry). Real estate is a complex and ever-changing industry, with a multitude of laws, regulations, and processes to understand. New agents must also now navigate through an even steeper learning curve with market trends, negotiation techniques, generating leads and more. Continuous support, education and mentorship from your brokerage play a vital role in ensuring success during this crucial period.

5. Balancing work and personal life:?You hated your 9-5 so you decided to get into real estate so that you could “work when you want”. If this is the case then turn around now. The demands of the real estate industry can be all-consuming, making it challenging for new agents to find a work-life balance. According to a survey by Inman,?90% of real estate agents work more than 40 hours per week. The first year often requires long hours and weekends dedicated to showings, open houses, and client meetings.

With the right mindset, mentorship, and a strong support system, new agents can overcome these obstacles and establish a thriving career in the industry. This is why it is vital to pick a brokerage that will properly support you during the beginning of your career. If you are putting in 110% and the brokerage is putting in 10%, then it’s time to find a new brokerage. However, if your broker sees you aren’t putting in the work and time, don’t be surprised when they don’t put it in as well. A good coach or mentor will match what you give. While the first year of being a real estate agent can be incredibly challenging, it's important to remember that perseverance and dedication can lead to remarkable success.

Need help navigating the industry? Reach out below.

Favorite New Listings

The Oskar

572 Eleventh Ave, New York, NY

Represented by?RealNY

21 Meserole St

Brooklyn NY 11206

Represented by?Abode By Reside

Across the US

3543 Scadlock Ln

Sherman Oaks, CA 91403

Represent by?The Rental Girl

1900 Strathcona Dr

Highland Park, Mi

Listed By:?Austin Black II?of Christie's International