Nine Reasons Why Many Real Estate Agents Fail

Nine Reasons Why Many Real Estate Agents Fail

The failure rate within the first five years in the real estate industry is pretty high. Statistics show that around 80% of real estate agents face the difficult decision of quitting the real estate profession. However, the reality is that to succeed in real estate you need to have a tremendous amount of self-motivation, clear business know-how, the ability to quickly adapt to the changes and to avoid mistakes.

The first three factors are aspects that most agents need to develop on their own with little external guidance, but what about the common reasons why new agents fail? We thought that this was an aspect that requires professional guidance and advice. So we went and asked our top real estate professionals, what mistakes should a new agent learn to overcome?

We have put together a list where we shall discuss each common mistake and the key to avoid the same. Your hard work combined with our advice is sure to lead you to success.

A. Reasons Why New Agents Have A High Failure Rate

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In this first section, we shall discuss some of the common mistakes that lead to problems for a new agent. These are foundational errors that any real estate agent must learn to overcome.

1. No Plan For The Real Estate Business

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One of the most common causes why real estate agents fail to succeed in the real estate industry is the fundamental lack of planning from their end. The truth is that real estate is more than selling real estate. There is a whole gamut of activities that a real estate agent has to keep track of in order to keep ahead.

As a real estate professional, you are actually a business owner. Many people who get into the real estate industry fail to mentally adapt to this change. They keep relying on their brokerage houses or mentor broker for each decision.

Solution To This

Start with a clear business plan. As a business owner, you need to clearly define who are your buyers and sellers? How will you find them, and what is your budget to get through the first year? How are you going to establish, run, and expand your business as an owner once you have received your real estate license? This is a crucial step that no real estate agent should skip.

2. No Career Goal Setting

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Related to the previous mistake, yet a distinct error is the lack of goals. The initial years can seem really challenging, and it is indeed overwhelming for many real estate agents. Therefore, a lot of agents decide to simply focus on clients who want to sell, and how they can make money?

The problem with this approach is that as long as the going is good, it lasts. But the moment they face any kind of trouble, the real estate agents are completely unprepared and have no idea how to handle the situation. They simply put in the required hours a day and hope that will be enough to earn the kind of money that they have seen other real estate agents do.

Solution To This

Having clearly identified goals is a necessary part to become a successful real estate agent. The more carefully thought and planned your professional goals are, the better your chances at joining the ranks of successful agents. Establish measurable goals. They should always give you an idea of where you are and where you want to be.

3. Not Having Enough Money

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Lack of proper money management is another common reason why real estate agents fail. Even when working for a brokerage, you are still classified as an independent contractor. That basically means that you may need to wait for more than a month or even a couple of months to actually get your income in hand.

Moreover, many people working as real estate agents fail to account for all of the expenses that they need to bear to keep their business running. The costs of the brokerage fee, marketing expenses, operational expenses and more can reduce the money that you actually do get. This results in your take-home pay being significantly smaller than what you expected.

Solution To This

Start with a financial budget and keep track of your professional and personal expenses. It is advised to all real estate professionals to have a financial cushion to help them tide over the initial months and also to meet the mandatory expenses when they are waiting for the money that they have earned. Creating a financial budget and setting goals for the expenses will help you keep your business running without any cash crunch.

4. Joining The Wrong Brokerage

A common reason that all our experts pointed out was making the mistake of joining the wrong brokerage. Many new agents make the choice of which brokerage to join solely on the basis of the commission split that they are offered. This leads them to work with realtors who do not have time to mentor the agents or be in an organization that does not match their work style or lacks the kind of clients whom they wish to work with.

This is the fundamental problem with this kind of thought process. Your initial years are going to be the foundation of your business. Most people quit after putting in all this hard work because they simply do not like to work in such a place.

Solution To This

Have a clear understanding of what sort of client base you wish to serve and what sort of assistance are you expecting from the broker and organization that you work with. Verify whether the target area of a particular real estate agency has adequate opportunities for all the real estate agents who work there.

5. Working As A Part-Time Agent

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Many Real estate agents fail as they continue to treat this profession as a part-time vocation. We can understand that it can be daunting for many people to switch to being a real estate agent without gaining a foothold in the industry first. They continue to work only a minimal number of hours a day and divide their time between two professions.

The problem with this is that in the real estate industry, there is a direct correlation between the hours worked and the income earned. Therefore, those real estate agents who are working full time tend to make more money. This income disparity leaves many part-time real estate professionals dissatisfied and leads to them deciding to quit the field.

Solution To This

Those who intend to work as part-time agents should have a realistic expectation of the money that you can expect to earn. Try to make a switch to full-time real estate selling if you think that you want to make money at the levels of other agents.

B. Reasons Why Even A Real Estate Agent With Experience Can Fail

In this section, we shall discuss why real estate agents fail even after making it through the first year and how to be overcome all of them.

6. Get Into Real Estate For The Wrong Reasons

A common reason real estate agents fail is also due to their motivations for becoming a part of the real estate industry. Unlike other professions, both the cost and the education barriers to enter the real estate profession are low. This leads to individuals thinking that they can quickly start earning stratospheric incomes.

They also believe that once real estate school and license requirements are completed, all they have to do is sell real estate, and they will be successful overnight. Yes, it is true that real estate agents can make six figures per year. However, these are motivated agents who are well prepared to face all the challenges that they face.

Solution To This

Spend adequate time gaining knowledge about all aspects of the profession. Learn how to conduct open houses, how to acquire new clients, and more. Make sure that you are familiar with everything that you need to know in terms of sales in this business. The harder you work, the faster you will become a successful real estate professional.

7. Lack Of Lead Generation Strategy

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Among the reasons why real estate agents fail is the lack of a proper lead generation strategy. There are two major issues with these. Leads are absolutely crucial to keep your business afloat. Without new clients, your business is in no way going to run. Depending solely on your firm to allocate leads is also problematic.

Apart from this, most real estate agents do not strategize to ramp up their lead generation as their business starts growing. Scale is a crucial component for the long-term success of your business. It is difficult to sustain a business without an adequate number of buyers and sellers.

Solution To This

Opt for an online seller lead generation platform like Dorrmat that is trusted by real estate agents across the US. You will be provided with a continuous flow of quality seller leads by Dorrmat. This will ensure that there is no down period in your business, and you never have a gap between clients. Moreover, the additional features and perks offered by Dorrmat, such as CRM, vendor inclusion, personal landing page, and others can also help you save some money for other expenses.

8. Inadequate Social Media Plan

Social media has become a buzzword in the field of real estate. It always played a significant role, however, the events of the past year have made it a virtually mandatory component for real estate success. A real estate agent's career at times does not progress simply because they failed to factor in this aspect.

Real estate professionals tend to lose out on all the clients and businesses that they can gain from such platforms. There is a growing trend of Facebook, Instagram, LinkedIn, and other similar platforms becoming the first stop for those looking to obtain the services of a real estate agent.

Solution To This

Have a clearly planned social media marketing strategy in place with a vision to scale it up as your business grows. Utilize these platforms with a two-pronged approach. Your primary motive is to widen your social circle and find new clients to increase your sales.

Another reason for utilizing the platform is to build and expand your professional sphere. Use it to network and build connections with fellow professionals in the field of real estate. These connections are an excellent source to gain referrals and also to provide better service to each client of yours.

9. Lack Of Marketing Of The Real Estate Business

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It is not enough to set up shop, you also need to let clients know that you are open for business. Similarly, in real estate, there is a need to market your brand, services, and business in your target location so that you can attract new clients.

However, most real estate agents are a bit lax about the marketing efforts in the initial period. It is both due to a lack of awareness about its importance and also due to budgetary constraints.

Solution To This

It is important to make sure that any potential client is aware of your business and also how it differs from others. Plan and spend wisely on online, offline, and in-person marketing efforts. Money spent on aspects like search engine optimization can bring more visitors to your real estate website. Utilizing both paid ads and free marketing tactics can boost your business and help you become one of the successful real estate agents.


Successful real estate agents are those who have the tenacity and work ethic to get ahead in this industry. Many agents struggle during the first year, but those realtors spend time learning and unlearning habits that are keeping them from meeting their goals.

Getting your real estate license is merely the first step. Real estate agents fail when they are unwilling to change or adopt new strategies. Therefore, it is vital to constantly evaluate your progress as a real estate agent and remember that there is always more to learn even after you obtain your license. So do follow our suggested strategies to take your real estate career to new heights.

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