I think alot of them just think the money will start dropping in out of the sky with no effort on there part.

You had a lot of great insight to what agents need to do, many try to start this business on a shoe string and think brokers can just hand them business.

I think a lot is attitude towards other agents which passes to people. Money...absolutely but there are so many things you can do for next to nothing (floor time, open houses, phone calls...). I think attitude is a huge one. Nice blog.

Time management is a big one.  Without a boss standing over us, it takes a lot of discipline to stay on track.

I've got to admit that I've been feeling 'burn out' lately.  I've been in the business for 20 years (this August)....i've seen tough markets and rode the waves.  But this one is different.  Maybe it's my age.  Who knows? 

Most agents leave because they never are able to see the big picture and fit themselves into the scheme of things.  They are unrealistic, and have not figured out a way to develop recurring leads.  Survival is all about leads generation.

I think many who fail don't know how to run their business LIKE a business. It's not a hobby! We cannot return calls when we feel like it. We have to plan for success, and budget.

great points to everyone...this is a business and we must run it that way.

Who cares let them fail, we are entrepreneurs and 50% of all businesses fail in the first year, from restaurants to retail why should we be any different. I don't want to compete with agents not serious about their careers, or looking for the easy or fast buck.

Great Post!  I agree with all your points, although I have to admit, I struggle with the scheduling out your day and sticking to that schedule.  I'm getting better.  But of course I'm still here and don't plan on jumping ship.  

 I also agree new Realtors need an income source (preferably 6 months savings).  I did it the other way around.  I had about 3 months savings, but my husband helped carry me till I started closing some deals, which happened after being in the business and working my tail off for 9 months.

EXCELLENT POST ! Hope you guys have a wonderful Easter !

  I am a Principal Broker in Oregon and I have been in this business for over 25 years and I could not explain this story any better than you have here. Great Job, Your perceptions are right on !

      Doug

In my opinion, a lot of people get into real estate thinking the money is going to be like the California gold rush. Unfortunately they forgot about the expense to get to California, the money spent on tools, and the many many hours spent prospecting. Real estate is no different. Its a difficult industry that takes persistence and determination in order to excel.

This is great stuff!  Thanks for sharing it with us.

You boiled it down so well!

Some folks don't really want to work. Others confuse activity with productivity.  An astute agent will distinguish business from charity early on, and then perform each, only when appropriate.

I would also add one more....unrealistic expectations (ie. easy money, quick wealth, etc.)  They see some agents driving luxury vehicles, living in expensive homes and think they too can have this in a year or so after being licensed.

I think money is the overiding factor.  First thing you do to get into this business is fork over a good amount of cash.  Cash for required classes, cash for the test, cash for the local board dues, cash for the MLS dues, cash for the NATIONAL dues, cash for a laptop, cash for a camera, and cash for your initial marketing expenses and web presence once you actually pick a broker to work for.

Then...after all that...you have to PROSPECT like crazy or get lucky on phone duty.  Even then, there is no guarantee you'll get any type of pay day soon.  Customers walk and any deal you may THINK you have, may fall apart.

Without a supporting spouse or a 8-10 month supply of money in your bank, it's extremely hard to stay motivated if you don't do any business initially or if you can't close a deal for a few months.  I've watched new agents go gung-ho for a month or maybe two....and still not get any business.

Meanwhile they have to eat, pay bills, support a family, etc.  Shortly after, Real Estate takes a back seat because even a few weeks is too long to not get paid, especially for most of them.  So what happens? They start working part time again....and out the door they go within 6 months.

Seen it numerous times over the past 5 years working in the business and I don't see that changing.  No amount of training or motivation can substitute the lack of income.

Reason #1 -- Agents don't treat it like their own business.

Reason #2 -- Agents aren't realistic about expenses

Reason #3 -- Agents don't have a business plan

Reason #4-- Agents think it will be easy money 

Reason #5-- Attitude.  You have to believe

Reason # 6 through 10 -- Prospecting, prospecting, prospecting, prospecting, and more prospecting

Very good explanations also I dont think some new agents put forth much effort---Bart

Like any self employed person you have to have a business plan and implement it.  Most do not know what it takes to be in this business.

Very good points here. I think no matter what business you are in, you have to be realistic about all of the points you mentioned. Usually when you here someone speaking at an event, about there business, they usually have been at the business for a long time, they have invested a lot of time, money and education to their craft. That is what makes them successful. You can't get into the real estate business and be successful overnight. It takes work. 

I have to agree with Dwayne.  It seems like such easy money and atleast in Texas you can get your license in a few weeks.  That is a bad mix.

J.

I would suggest that there is another very crucial item.

#5 should read "Failure to prospect. Lead generation activities should be performed EVERY day."

I think new agents in many cases just do not have enough money to live on until the first check comes in and many people do think this is an easy business.

I think new agents in many cases just do not have enough money to live on until the first check comes in and many people do think this is an easy business.

I think new agents in many cases just do not have enough money to live on until the first check comes in and many people do think this is an easy business.

Folks -

You've got the big ones right.

Also, you do have to treat RE like a business - not like you're just an employee doing a job.

Most people, unfornately, have an employee-type job before they get into RE - and this is what they know.

In business, you need a PLAN, and you need to be able to ride the high waves as well as the low troughs!  Indeed, many saw EASY MONEY in this business a few years ago - these folks are mostly out of the business.

Call or drop in anytime - because we could go on forever with this stuff!

DEAN & DEAN'S TEAM CHICAGO

This is a great post. I agree, "the benefits are down the road." You can't plant seeds today, then expect them to grow by tomorrow. You have to have time & patients in this business and keep planting seeds.

So true, the message should almost be mandatory for newbees because many don't realize what they have 'gotten themselves into'.

Sonja in Olympia WA 

Great post, and right on every point. It's these down markets that really teach you how to run your business and succeed

Great points. I have seen a lot of agents who really thought it was just about looking at houses. How many times have you heard someone say "oh, I love looking at houses" and they have no clue about what it takes to run a business. Why so many think this is so easy? It's not a quick buck like some think!

Very good blog.  I personally seen a few of my friends drop off because they lack committment and they assume that money would come pouring out of the sky. 

Keeping a schedule is very important. We all know how easy it is to get off track when the phone is ringing off the hook. I think the most important thing to stress to new agents is that they need to spend time in the office. It seems that most agents that I have met in my lifetime spend less than 10 hours a week in the office. While the top producers spend 10+ hours in the office.  That has got to tell you something - 10+ hours per day = top producer, less than 10 hours per week = broke.

Mary (above) mentioned burn out and I am in the same boat as her and we are in different stages of our careers and ages but in the same market.  Just when I thought I had this thing licked and figured out, our market changed and had to change my business plan.  Now I am trying to take everything good that comes my way and may be overdoing it.

Real Estate Agents are independent business owners and without the understanding that you are now an entrepreneur and that you need to act like one, failure is all but assured.  You are not an employee, you are a business owner and as such you must plan,budget,advertise,determine what your target market is and who your competitors are, as well as putting in the long hours necessary to get your business to a profitable level.  Most businesses never see a profit until their second or third year!!  You can be profitable in this business during your first year if you work at it.  I know a young woman who quit her job as a waitress and went to work as an agent with no cash reserves or no experience or formal education.  She worked her tail off and is now the top agent in her company, In less than three years!! I have a 19 year old kid in my office who has been with us for less than a year and has 18 listings! He was recognized last month as one of our top listing agents.  This kid pounds the expired listings relentlessly.  The number one activity for a real estate agent, whether a rookie or a seasoned pro is lead generation, and if you are not spending time daily, generating leads and processing them to build a database of potential clients, you are certain to be heading back to traditional employment.  You cannot hang around the coffee pot complaining about how slow things are or sit at the computer during floor time and play solitaire!  That's what employees do and that is why they are employees!  How many calls have you made? How many doors have you knocked on? How many professional networking events have you attended?  How many For Sale By Owner signs or ads have you called on?  None? Update your resume and start searching on Monster.com for your next job.  To be successful in this business you have to be passionate about what you are doing.

I think I'm posting somewhat anonymously:-) 

I've been in the business eight years.  I basically new what I was getting into - nothing came along that I was really surprised with nor that I objected to.  I knew "sales" was going to be difficult - I didn't have much of that background and I knew that part wasn't going to come easy.  Yes, I said I liked looking at houses but I also like the process of getting people into them.  Or finding buyers for sellers. I also knew that I would have to keep check on my emotions and anxeity -- I was doing great until some personal issues kicked in a few years back - plus leaving the place I was doing good (darn integrity).   I haven't gotten back on track since. So I'm seriously thinking of going back to something I am good at, feel comfortable in doing AND comes with a (nice) weekly paycheck.   I'm actually looking forward to it!  In my case, the market little to do with it - I know the business is there - but I'm not grasping it.  The drive isn't there (that is somewhat where the market is effecting me, it is harder and more emotional today than it was 3 years ago).  I haven't stopped completely as it will take me a while to find a job in my previous sector after 7 years absense. 

All good points here.  As the broker owner of our company - I require the new agents to create a business plan and really understand how hard the business is.  This hurts me at times, as some agents go to other companies because they think I'm crazy for making them do all the up front work.  Eventually they come to appreciate that I was just trying to help them launch a successful career.  Brokers owners and managers  take on to many agents that really are not ready.  Thanks for the post.

Bruce Garber

Sheridan, Wyoming

Most agents - and most people in general - have never really learned to save. They never learn the Pay Yourself (Savings) First - then find the money for bills.

Good post, I think even  the seasoned agents still lack the time management skills. Some people are always working. Your right it is a tough business, especially when new.

WOW! right on target!!! Can't add anything more to the great comments and thoughts on prior comments...

Good point about time mgmt skills at whatever level of experience.  I see a general lack of basic sales skills as the biggest obstacle to success.

I think a lot of newbies to real estate think it is a glorified get rich profession. 

good points, each of them. just to balance the scale......many of those that survive are still lousy at time management, money management, and planning. there is one asset that is god given and some have it and some don't. it has to do with people either like you or they don't. people that seem to be likeable overcome all the obstacles and succeed in spite of their failings. on the other hand, if you do everything laid before you, you still might fail because...........not to be mean spirited.........folks just don't warm up to you.

i can't really put my finger on it, what ever it is............but is the key ingredient...folks with it survive...those without it, move on.

Undercapitalization and budget management are challenges many agents face. It can be difficult managing spending when you're not exactly sure when the next income is coming in. And sometimes the situation is compounded when agents choose short-term solutions (part-time jobs, etc.) over building their business for the long-term.

I'm glad to see Time Management #1.  How true.  The first piece of advice I give new and agents who ask about how to succeed in real estate is:

"Get up in the morning and go to work, even if it's only 20 feed from your bed to your computer."

Income was my biggest obstacle. I knew the costs going into it but to sustain a living after all the initial capital expenditure was most important for me. I needed to make sure I had a budget to pay my bills before my first close. Ecellent post!

I would like to suggest have a business plan, it is essential. The other is having an accountability partner, someone who will keep you honest about how hard you are working. Last mind-set, if you think you will succeed you will.

Excellent Post!I would have to also say,alot of these people do not know how to run a business...I don't think some realtors understand this...they are not paid employees...it is their business.

I enjoyed your blog. New agents ask me all the time for "the secret" on being successful. I tell them that  they need to network, prospect and preview, preview, preview to know the inventory and learn the market so that people think they are an expert! Most of them don't listen to me though-I guess they aren't willing to work. I always wonder why most of them even ask? 

Great post!  But I have to add that new agents really need a mentor of some sort.  If not their broker, then someone who will 'coach' them through the first few months of being a real estate agent. It's tremendously helpful. 

Kathy Fisher Lexington TN Remax Realtor

This is an excellent post and being a realtor for only two years, i know that it takes hard work, determination and perserverance.  I was lucky and made a profit my first two years.  I do think the most important is time management because you can not get by only working 20 hours a week. Knowing your market and being sharp will take you far also. THanks for the post!

In any field, there is turn over. Real estate is no different. It's natural for people to try things and realize it's not for them. There's the old saying "if it were easy, everyone would do it." A lot of people sure try to do real estate, but few make it. And the things you list to be successful in real estate, well, you need them to be successful in anything. Nothing comes easy. If it does, it's generally not worth having.

Great post.... planning before you jump into the business really helps a lot.

Excellent post!  Very well written and full of wisdom.  Thanks for sharing and good luck.

I think people get hired too easily.  Maybe if agents (and Loan Officers for that matter)were required to have a business plan, etc. they would be more likely to succeed.

Get some training outside your office! Your office training is like high school. Get your master's. I would have quit too without learing dialogue from Floyd Wickman, getting referrals from Brian Buffini and reading inspirational books like Cherie Campbell's "The Wealthy Spirit."

Loads of great info. Thanks for all of the input.

Great post.  I am very new to the business, and I think I have a pretty clear understanding of what it takes.  But seeing the problems written down, has definitely stirred the pot a little and will help me to get even more focused on what I need to be doing to be successful.  Attitude is definitely a big one.  A teacher in my pre-licensing class asked everyone on the first night "How many people have heard that you should not expect to make any money in your first six months?" Most of the room raised their hands. "Well if you believe that, that is exactly what is going to happen.  If you believe you can make money in the first six months, and do the things that are required, then you can make money!"  I bought it, and I bring a positive attitude (that I believe is infectious) to the office every day.  I believe I will make money, I'm doing the things required to make money, and so I will make money.

Great post. I think most people don't realize how much money is involved in starting and owning your own business, no matter what business you are in. "It takes money to make money", right? Also time mgt, just a couple great points you mentioned. Thanks

Great post, I think a lot of them do not do the required networking or develop good lender relations

You definitely have to run it like a business. You need a written plan at the begining of every year, every month and every day. Whatever your plan stick to it, don't quit on the plan. There are some good Real Estate agent planning books out there. David Knox Productions has a DVD "Run it like a business"

Your right on the money. I will have been in Real Estate 1 year next week, and I have not done all that well. And the reasons why are axactly what you said! I know what i have to do to suceed, but the hard part is disciplining myself to do it.

I've got to disagree with #3...follow Gary Keller's rule of "Lead with Revenue" and the start up costs are nothing more than your MLS and NAR dues.  Replace advertising with prospecting and keep your costs down.  It may be harder, less comfortable, but it will pay off without requiring you to pay up.

This is a great post!..

can i just add a little...? i believe alot of new realtors get overwhelmed and then just get discouraged...

Many fail for the same reason most restaurants fail, under-capitalization to get through the first 3 years.

I think lots fail because they do continue to grow.  They don't take CRS classes, GRI classes, E-pro, to to conventions to learn things and become better agents.  Too much time is wasted in offices visiting with the other agents.....and not about real estate.

"Your attitude is your altitude".  Love that.  Agents have to treat it like a business and have written down goals, otherwise you are just floundering around!

Great post, I definitely agree Real Estate Agent, is the CEO and the clerk of our own business.

In the market anyone beginning should have more than a year's worth of money to fall back on-- money to live on and money to market themselves to get going. Otherwise they may not make it.

Many people do think this is an easy business. I think the only reason why most agents fail and quit the business is Money!

This is a great list.  I do need to work on my time management!  Hey, this is the place for transparency, so thanks for the kick in the rear!  Congrats on your feature.

I think the money issues is the biggest for most. They assume that if they don't make anything, they'll still be ok. They forget that they are still paying fees even when they aren't selling.

I have had EVERY ONE of these problems.  It is good to remind us all of the pitfalls we face... so we can NOT face them every month.

These are wise words that could apply to any profession. I have slipped in each area and then bounced back. The money factor is rising it's ugly head again.

Since I was a kid, my major issue is and always has been time management.  Now add a three year old and crutches to my list, and any time management skills I had just went right out the window.  I don't know if scheduling will help much, but I'm going to try to be more detailed with my scheduling.  And I'll double the amount of time I think everything will take!

Time Management is crucial for agents of all agents. If you take your weeks calendar and mark off time for prospecting every day and let that be most important, you will not give in to the phone calls, emails, and other distractions. I think people think by being in the office they are working............NOT. You have to be even more diligent there.

Congratulations on a well-deserved gold star.  This should be a disclosure that all new licensees should sign before affiliating with their first broker.  It really does lay out the reasons agents fail.  

I agree to what was said here.  Though I'm new almost 2yrs in the business. I was gun ho and ready to take it all on and suddenly no business.  I spent my way out the business. While out of the business I began asking for business. I worked my tail off to get back into the business. Overall I believe it's the mental attitude of the Realtor.  New Realtors who want to succeed in this business has to have a whatever it takes attitude!  One of the mistakes I made was failing to anticipate what was happening in the market. What I mean when and where to cut costs. Find other ways to have exposure without spending a lot of money or no money.  The Budget, Business Plan, and Attitude I feel are the most important. I follow that and continue to watch my business grow.

I can not agree with you more.  Each of the topics you touched upon make total sense.  Many people get in to the business b/c they think they can do it on the side.  This is no side job, especially in todays market.  I do agree that you need to have a structured time to work.  It's very difficult if you do not give yourself a schedule. 

 Great tips!

 Miriam Gilmore

Well said team Dimuria

Hi Jeffery & Mona, I see an increase of agents bowing out around tax time. Most agents don't even plan for taxes.  You are right on: it's a side business to these people!  So important to treat our business as a business, using planning & saving.

As a new agent, I now see why it is so hard to get going in this business. Besides the fact that it is a really tough market now, there are so many reasons why new agents just dont make it. So I plan to learn as much as I can now, work hard and not quit. Great post, by recognizing all these aspects I am going to try to work on all of these aspects.

Patience and good direction: If you want to be successful find some one else that has tried all the things that don't work and let them tell you the money making ideas that will work.