What It REALLY Takes to Succeed in Real Estate

Well folks, here we are again. There are all kinds of indications that we might be in for a correction when it comes to real estate values, and one such indicator is the excessive number of real estate agents. In fact, the chart below shows that Massachusetts has more agents now than prior to the last recession. Many agents tend to exit the business when the going gets tough, like when the market begins to slow down. The good news is that well trained career professionals typically love recessions because they are no longer compared to agents who jump into the business for a quick one or two sales a year and because agents dropping out means more business for the ones who stick around.

The thing that has always bothered me about our business is that being a real estate agent is hard work, even when the market is hot. There are competing interests, potential liabilities/lawsuits galore, and lots of contracts, inspections, and financing issues that muddy the waters. Great real estate agents are skilled at overcoming hundreds of possible obstacles on every deal. Many are juggling multiple obstructions on several deals at once. And they do it with finesse! Most buyers and sellers have no idea of the marathon of hurdles their agent must jump through to ensure that each deal closes.

As I hear of some big brands purging tens of thousands of "ghost" agents from their rosters, I wonder to myself, why are there so many agents? Why do millions of people line up to become part of an industry that requires a great deal of work for a relatively low return. Sure, agents may get paid a few percentage points of the sale price to get it closed, but that doesn't account for the fact that for every one deal that closes, there may be three others that didn't get to closing. Why do so many people want to give away the better parts of their nights and weekends to this business? Why do millions want to work in an industry that is truly feast or famine, and so very much dependent on unemployment rates, mortgage interest rates, the stock market and to local housing trends?

Well, I think I figured it out.

The reason there are so many agents who do no business is that there are too many brokerages setting very high expectations for people coming into our business.

In 1914, when British explorer Ernest Shackleton decided to embark on an expedition to traverse Antarctica, he placed a recruiting ad in The London Times. His recruiting ad was as follows:

Men wanted: For hazardous journey. Small wages, bitter cold, long months of complete darkness, constant danger, safe return doubtful. Honour and recognition in case of success.

When I read this passage about Ernest Shackleton, it changed the way I described our industry to new agents.

First, it's important to note, that 90% of the agents who join our brokerage come from other real estate companies. YES, recruiting talent is hard, but it's not as hard as figuring out who will make it in this business and who won't. Every once in a while I sit with new agents who want to join our brokerage, and rather than tell them that we have many high performing agents making great money with little effort, I tell them the truth. I tell them that our six and seven figure income agents spend every waking moment working on their business. I tell them that many agents do go months without pay at times, including the high performing agents. I tell them that even though it only takes 40 hours of class time to get a license, it takes hundreds, maybe thousands of hours of class time to market, negotiate, and sell well . I tell them that for every smooth, easy, effortless sale they may have in this business, there will be ten that that they will have to drag to the finish line with every single ounce of their energy.

The reason there are too many agents is because there are lots of great agents who hide all the blood, sweat, and tears of a transaction behind the scenes. They make a very difficult job look simple. Trust me, it's anything but simple. These agents are on call 24/7. These agents are experts at untangling complicated transactions. These agents are phenomenal at being the middleman between several competing interests. These agents invest heavily into their businesses and themselves. These agents are rock stars at asking everyone they meet for business. These agents are absolute fighters who get knocked down day in and day out, only to get back up again the next day to get back in the ring. These agents make it look easy, because they consider it part of their job to harness the stress of each transaction, so their clients don't have to.

The bigger reason why there are too many agents in the business is that brokerages are less than candid about what it takes to succeed.

Now, when I sit with brand new agents who are so excited to get started in their business, I say this to them....

Men and women wanted: For hazardous journey. Small wages, bitter cold, long months of complete darkness, constant danger, safe return doubtful. Honour and recognition in case of success.

By the way, many turn away and run to other brokerages. They run to someone who will tell them this business is easy, that anyone can do it, and that they will be making millions of dollars in no time.

But the ones I really want, the ones who might just make it in this business, they read my passage and then raise their hand to say, "Im in!" A keen knowledge of what you are in for, and still enthusiastically going for it, is a good start to building a successful real estate business.