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One Reason Why So Many Real Estate Agents Fail

Services for Real Estate Pros with Marte Cliff Copywriting

 If you stop and think about how many people become licensed and then wash out after short time, the numbers are pretty amazing.

Tom Ferry says he’s quoting NAR when he says 87% fail in the first 5 years. Here in our rubber stamped failuresmall town, I’ve lost count of the number who started and stopped within just a year or two.


Plenty of reasons, beginning with the expectation that real estate is “easy” and will give people plenty of free time to play while making an above average income. (That sounds just about like the hype about becoming a copywriter!)

Maybe it’s that false expectation that leads to what I believe is one of the primary reasons so many agents fail:

They don’t treat their business like a business.

Many have been employees all of their lives and have no idea what it takes to run a business. They don’t know about:

  • Paying self-employment taxes
  • Paying their own business expenses
  • Bookkeeping, especially to take advantage of deductions
  • Budgeting their money – both for business expenses and for their household expenses when they don't have a set monthly income
  • Budgeting their time
  • Working more than 40 hours a week
  • Self-motivation
  • Marketing and self-promotion

The money part is a huge issue, especially with people who have been used to getting a weekly or monthly paycheck with their taxes, etc. already deducted. They get a nice check and think they can spend it.

Then when Uncle Sam sticks his hand out in April, the money isn’t there.

And, when a month or two comes along with NO income, they have nothing to fall back on - except perhaps their credit cards.

Time is another issue. As you know, real estate offers dozens of distractions and ways to waste time. From office gossip to people who want to tell you all about the latest and greatest thing you should buy, empty talk can take a huge chunk out of a day.

Add that to a feeling that you “should” be able to take time to go to lunch with friends, get to work late, and go home early, and it’s easy to spend days without doing any work at all.

But… for some it doesn’t matter, because they don’t know what getting to work means beyond showing a house or meeting with a homeowner to ask for a listing.

In truth, only the self-motivated will survive in real estate.

A new agent may go to work where a broker or mentor will give them suggestions about what to do to get going. Some might even have quarterly performance reviews to see how an agent is doing and make suggestions for improvement.

But licensed agents are independent contractors. As such they are their own bosses. Some other boss isn't going to tell them they have to make ten phone calls today.

There may be a little help and guidance, but when the chips are down, each agent has to push himself or herself, set his or her own goals, and demand his or her own performance.

In order to succeed, they have to get out of bed and get going every morning, whether they feel like it or not. And, perhaps more often than they like, they have to keep right on working when other people are playing.

I suppose some can manage it, but I haven’t met any successful agents who only work 40 hours a week. Some of that work might be done at home early in the morning or late at night, but it's still work.

Marketing and Self-promotion are foreign concepts to many who have never before owned a business.

And, since real estate schools don’t generally teach these skills, they don’t even know what they don’t know. They don’t know where or how to begin.

But they need to learn quickly, because as small business owners, agents do need to market themselves.

I’ve read top agents here in the Rain who say it’s necessary to spend an hour every day on marketing.

If you’re not already a top agent in your area, perhaps it’s because you aren’t spending enough time and energy on marketing.

  • Maybe it’s time to start picking up the phone to call past clients or to connect with your sphere.
  • Maybe it’s time to write some useful blog posts – then share them on social media.
  • Maybe it's time to choose a set or two of my real estate prospecting letters and start mailing – or put a capture box on your website and start sending them by email to folks who opt in.
  • Maybe it’s time to add a client-attracting bio to your website.
  • Maybe it's time to get out in the neighborhood and meet people.
  • If you have no appointments this week and can't think of anything at all to do, click here for 14 ideas.

    Real estate is unlike any other career in so many ways.

One of those ways is that you are a small business person - but one without a store full of Your services are the package you sellmerchandise or a tangible product to sell. You sell homes, but you don't own them.

Your "product" is a package that includes your knowledge, your expertise, your personality, your friendship, your guidance, your time, your patience, your support, and even your comfort when things go wrong.

Marketing that package is a necessary task if you wish to treat your business like a business.



Failure stamp abd time to work images courtesy of Stuart Miles @freedigitalphotos.net

Gift Box Image courtesy of Master isolated images at FreeDigitalPhotos.net


Marte Cliff
Marte Cliff Copywriting - Priest River, ID
Your real estate writer

Endre Barath, Jr. - They probably "know" it's easy and that all agents are rich. So maybe they think you're just trying to discourage competition.

Nov 09, 2018 03:09 PM
Endre Barath, Jr.
Berkshire Hathaway HomeServices California Properties - Beverly Hills, CA
Realtor - Los Angeles Home Sales 310.486.1002

Marte you are so right on this, one of my neighbors saw how "easy" it was for me to list and sell the house across the street from her so she would not listen to me:)) now she is starting to "understand" after she got her license and is trying to get  listings and buyers....Endre

Nov 09, 2018 03:12 PM
Marte Cliff
Marte Cliff Copywriting - Priest River, ID
Your real estate writer

Endre Barath, Jr. Those who refuse to listen are destined to attend the School of Hard Knocks.

Nov 09, 2018 03:32 PM
Debe Maxwell, CRS
Savvy + Company (704) 491-3310 - Charlotte, NC

Boy, I don't know which point I agree with more, Marte! I will say that it's probably the point you made that agents don't treat their business like a business. I've read over and over again in Q&A - agents do no planning - there is not even a written business plan each year. That just blows my mind!

Excellent post, Marte!

Nov 09, 2018 07:55 PM
Pat Starnes-Front Gate Realty
Front Gate Real Estate - Brandon, MS
601-991-2900 Office; 601-278-4513 Cell

Marte, this is a tremendous post that somehow was overlooked because we should see a gold star on it. There is always something we can work on to improve our business. I followed your link of 14 things to do and one of them was working on your database. That's what our broker suggested we do during the slow time(s). Everyone thinks being a Realtor is an easy job but it requires hard work, knowledge and research. Thanks for a great post!

Nov 10, 2018 09:55 AM
Marte Cliff
Marte Cliff Copywriting - Priest River, ID
Your real estate writer

Debe Maxwell, CRS - I think a lot of people just aren't equipped mentally or emotionally to run their own businesses. They don't even know what they don't know about it.

That's right Pat Starnes-Front Gate Realty - it is work. I've known people who made it easy work, but they didn't make much money and they sure didn't do their clients any favors. Right now I'm thinking about the coworker who read romance novels or crocheted when she was on floor time...

Nov 10, 2018 10:17 AM
Mory Sylla
Lion Dreams - Seattle, WA
Mory here,Seattle,on an education mission.

Great advice.

I am saving this article for future reference.

Nov 11, 2018 12:48 AM
Marte Cliff
Marte Cliff Copywriting - Priest River, ID
Your real estate writer

Thank you Mory Sylla - and welcome to Active Rain!

Nov 11, 2018 12:38 PM
Jan Green - Scottsdale, AZ
Value Added Service, 602-620-2699 - Scottsdale, AZ
HomeSmart Elite Group, REALTOR®, EcoBroker, GREEN

So true.  Any newbie reading this needs to take your advice.  Writing a business plan, naming an LLC or PC can help put that vision of creating a business into action.  Great post!

Nov 13, 2018 05:56 PM
Kat Palmiotti
eXp Commercial, Referral Divison - Kalispell, MT
Helping your Montana dreams take root

This is all so true. I actually found a sign-in sheet yesterday from my initial real estate courses in 2010. I looked up the names and found that 44% were still active agents (I don't know HOW active, but they are still registered w/active licenses). That seems higher than all the numbers I see elsewhere, but still, more than half are no longer in business. And the reasons are most likely what you list above.

Dec 01, 2018 04:12 AM
Sheila Anderson
Referral Group Incorporated - East Brunswick, NJ
The Real Estate Whisperer Who Listens 732-715-1133

Good morning Marte. I generally appreciate your posts and the specificity you share. Beautiful post.

Dec 01, 2018 05:21 AM
Marte Cliff
Marte Cliff Copywriting - Priest River, ID
Your real estate writer

Jan Green The first thing many need to do is shake off the "employee mindset." Not everyone can do it.

Kat Palmiotti - That was a fun find - and interesting. I've never kept track of numbers, but have sure known a lot of people who started in real estate and stopped within a couple of years. Have also met a lot of people who said "Oh, I used to sell real estate."


Dec 01, 2018 08:54 AM
Marte Cliff
Marte Cliff Copywriting - Priest River, ID
Your real estate writer

Thank you Sheila Anderson - I appreciate your kind words. Happy Saturday!


Dec 01, 2018 08:55 AM
Grant Schneider
Performance Development Strategies - Armonk, NY
Your Coach Helping You Create Successful Outcomes

Good morning Marte - these are excellent points.  It is different from owning a store for example.  I find that what you say about Real Estate rings true in the area of consulting as well.

Dec 01, 2018 09:16 AM
Dorie Dillard Austin TX
Coldwell Banker Realty ~ 512.750.6899 - Austin, TX
NW Austin ~ Canyon Creek and Spicewood/Balcones

Good evening Marte Cliff ,

I'm so glad that Carol Williams featured your post in her Second Chance Saturday series..excellent! The AR Gods are asleep..it should be featured!

Dec 01, 2018 07:08 PM
Mike Cooper, Broker VA,WV
Cornerstone Business Group Inc - Winchester, VA
Your Neighborhood Real Estate Sales Pro

Marte, there is a wealth of information in this post. I've noticed that new agents seem to come into the business assuming business will automatically fall in their lap. It doesn't. They need to learn how to work all over. It's a different animal beyond punching a clock. 

Dec 02, 2018 07:16 AM
Marte Cliff
Marte Cliff Copywriting - Priest River, ID
Your real estate writer

Grant Schneider You sell a totally different product, and the packaging and presentation are all up to you.

Thanks Dorie Dillard CRS GRI ABR - I appreciate your kind words.


Dec 02, 2018 11:54 AM
Marte Cliff
Marte Cliff Copywriting - Priest River, ID
Your real estate writer

Mike Cooper It sure is, and some agents never figure out how to deal with that. I really think marketing and business management should be part of the training people get before licensing.

Dec 02, 2018 11:55 AM
Jeff Dowler, CRS
eXp Realty of California, Inc. - Carlsbad, CA
The Southern California Relocation Dude

Hi Marte

I'm glad Carol featured this since it missed the gold star. This would be an excellent read for anyone getting started on real estate licensing and BEFORE they get started in the business. There are many who no doubt have unrealistic expectations and no clue about what is to come.


Dec 03, 2018 08:11 AM
Marte Cliff
Marte Cliff Copywriting - Priest River, ID
Your real estate writer

Jeff Dowler, CRS I do think potential agents should know things like this before they pay the money and take the courses. Becoming a small business person really isn't for everyone.

Dec 03, 2018 09:54 AM