13 Reasons Why 90% of Real Estate Agents Fail

Compared to other rewarding professions, entering the real estate industry is easier. However, surviving in the industry is an entirely different thing. According to research, nearly 9 of 10 new agents fail within their first five years. Why is there such a high failure rate?

Some of the most common factors why many real estate agents fail are unrealistic expectations, lack of budget, and not letting go of the employee mindset. Your reasons for joining the industry and how you generate leads also affect your chances of being successful.

In this article, you’ll learn why most agents call it quits after a few years and the steps you must take to succeed.

Reason 1: Having Unrealistic Expectations

having unrealistic expectations

Many real estate agents assume that once they obtain their license, they will immediately earn boatloads of money. They think being successful is as easy as they portray on TV shows. But here’s the truth: most won’t make million-dollar transactions during their first year in the biz. According to a study, the average income of new agents in their first year is just around $55,000.

Of course, earning tons of money is really possible. There are many multi-million producers in the industry. However, these top agents work intensely to get where they are. They invested many years in perfecting their skills and talents.

Clearly, being a successful agent is not easy and doesn’t happen overnight. You need to be a goal-driven people person to succeed. Real estate is not easy money – it is a long game with a steep learning curve.

Hence, it’s essential to adjust your earning expectations so you won't feel disappointed six months from now. But don’t worry. If you’re persistent, you will achieve your dream income, but not in your first month. It takes time to build up your client base and become a power seller.

With that in mind, becoming a real estate agent for the sake of money may put you on the path to failure. Before getting your real estate license, ask yourself, “why do I want to be an agent?” If your main reason is to help people with one of the biggest moments of their lives, then a career in real estate might be great for you.

Reason 2: Failure to Generate Leads

real estate agent doing lead generation

Many agents fail because they don’t know how to generate leads or wait for clients to reach out to them. However, you should initiate contact with your potential clients if you want to earn leads and keep your business running. How you generate leads also plays a crucial role in your success.

For instance, other agents see open houses as an effective strategy. On the other hand, others prefer to get leads through online marketing or social media. Whatever method you choose, commit to it instead of jumping ship after a few months. Allow yourself to be an expert in that strategy.

Once you’ve determined your strategy, block out a particular portion of your day for lead generation. In addition, consider investing in digital solutions to ease the process of prospecting. These solutions usually offer data on insights such as owner demographics and local amenities. Other software features automatic calling and emailing to streamline your lead generation. 

A Common Mistake In Using Social Media 

Many agents use their social media as a “look at me” venue. They often post content that features their latest listings or the number of homes they sold in a week. Such agents think that these self-centered posts will help them attract more clients. However, the result is far from that.

Most of your connections aren't on the internet to see your new listing or how many houses you’ve sold in a week. But if you post valuable content related to real estate, your connections might take the time to read it.

In addition, chances are they will share your post even if you don’t ask them to. If you consistently post valuable content, they will view your brand as a gold mine of information. Of course, self-promotional posts are also helpful, but only if you’ll use them sparingly.

Reason 3: Lack of Follow-Up

following up on a lead

There is a popular saying in business that goes, “the fortune is in the follow-up.” This is true, especially in real estate. You might need to follow up with your leads 3 to 6 times before you spark an interest (Note: be persistent but not pushy). Doing so will build a sense of trust in your relationship, which is critical in the real estate industry.

Furthermore, the work doesn’t stop once you close a deal with a client. Hence, it is crucial to stay in contact with your past clients too. This will make them realize that you’re sincere about helping others. As a result, your past clients may refer people they know to you. Or they may even work with you again should they look to enter the real estate market in the future. 

Reason 4: Running Out of Budget

running out of budget

One of the main reasons why agents fail is running out of money. At the earliest, it typically takes around 90 days to get a client (assuming you’re giving your best in lead generation). On top of that, it might take 4 to 6 months before you can close the deal and get your first commission check. How will you financially support yourself until then?

Industry experts recommend that you need at least six months of savings to be afloat until your first sale. If you don’t have any savings, you could work part-time until you start making the minimum income you need to shift to full-time. Applying for a bank loan may be an option, but it’s definitely not the best one. Plan to support your real estate business with your own money instead.

To determine how much savings you need, add up all your current monthly bills, such as food and utilities, and projected business expenses. It’s important to include even small expenses as these can quickly add up. Afterward, multiply the sum by 6 to estimate how much you’ll need to save before jumping into the real estate business.

Moreover, you’ll never know when the next paycheck will arrive. Thus, you need to learn to manage money wisely to avoid failure. 

Reason 5: Not Working Hard Enough

working long and odd hours

Many new agents fail because they struggle to let go of the employee mindset. They think that the real estate business is also confined to the working hours of 8 AM – 5 PM, Monday through Friday.

However, being a real estate agent is not a job – it is a business. While setting boundaries is important, you might need to work odd and long hours to achieve success. This could mean working many nights and weekends and being reachable by clients nearly 24/7. Weekends are usually a convenient time for clients to view properties.

Tip: Find out the daily habits of top real estate agents in your market. Copying their business strategies won’t guarantee success, but learning their work ethic goes a long way.

Reason 6: Not Having a Business Plan

creating a business plan

When you fail to plan, you plan to fail.

Many new agents don’t have a business plan. They jump into the business without specifically knowing how to reach their goal. But if you want to grow, you must have a road map to your goal. A recent study revealed that entrepreneurs with business plans are 75% more likely to succeed.

Your business plan must contain the specific steps, marketing strategies, and budget needed to reach your goals. 

Here are nine essential steps to take when mapping out your strategy:

  1. Identify who you are as a real estate agent. Understand your strengths, weaknesses, and goals.
  2. Know the ins and outs of your target market. Some metrics to watch for are the typical listing commission rate and the average days a property lasts on the market.
  3. Analyze your local competition. Point out where the market is underserved to know how you’ll fulfill a need.
  4. Decide what services you’ll provide. What is your niche?
  5. Identify your ideal customers. Deeply understanding them will pay off. For instance, are they more reachable via mailbox or social media?
  6. Conduct a SWOT analysis. Strengths, Weaknesses, Opportunities, and Threats are a common yet essential part of a business plan. Identifying these four aspects will help you determine the best approach.
  7. Determine your goals. Goals you might want to think about include a specific number of transactions and specific gross commission income you want to achieve.
  8. Analyze your starting and ongoing financial needs. Take into account all of your operating expenses.
  9. Make a plan to revisit the document. You need to know when to review your strategy. Do a quarterly check-in to see if your chosen strategies advance you toward your goals.

Want to have a roadmap to building a six-figure real estate business? Click here.

Reason 7: Having No Goals or Action Plans

achieving business goals

Another common reason why agents fail is that they don’t understand how to set goals or create action plans. Goals and action plans are critical to success as these can make you more accountable, which leads to better results.

It’s not enough to just set a yearly goal and not revisit it until the end of the year. You need to constantly set goals and review them. Moreover, ensure that your goals are measurable. Crucial goals include the number of sales and the number of weekly prospecting calls you aim to conduct.

Reason 8: Never Transitioning to Full-time

part-time agent showing property

It’s possible to work part-time as a real estate agent. However, the amount of time commitment equates directly to money earned. So if you want real estate to pay you a full-time income, it has to become your full-time job. Unfortunately, many part-time agents fail to realize this and quit because they are not making the money they hope for.

To overcome this challenge, start by deciding the salary you are comfortable with. Afterward, determine whether working part-time or full-time is best suited for you.

Furthermore, most clients prefer to work with full-time agents because they are more available than part-timers. To jump this hurdle, be honest at all times. If you’re interviewing a client, explain to them that you’re a part-time agent so no problems will arise in the future.

If your full-time position allows you to answer calls and inquiries related to real estate, inform the client. But if not, be upfront about that as well. Remember that being honest with clients about your part-time position gives you more victories than defeats.  

Reason 9: Being Afraid to Make Mistakes

learning from mistakes

There is no person on earth who doesn’t screw up. Making mistakes doesn’t mean you’re a failure. Instead, view errors as your side and rearview mirrors. Learn by looking back at them to learn to create better decisions.

Reason 10: They’re Difficult to Work With

agent who is difficult to work with

Dealing with other people is the main part of a career in real estate. Hence, it’s critical that working with you is enjoyable. Always keep in mind that there are hundreds of thousands of agents out there. So if an agent is difficult to work with, a client can effortlessly hire another one who has a pleasing personality.  

Reason 11: Can’t Handle the Unpredictable Nature of the Industry 

struggling real estate agent

The road of real estate has peaks and valleys. Success isn’t guaranteed, and there’s no way of knowing if you will be successful in your entire career. Additionally, you will also face unpredictability in your schedule and when people contact you.

Hence, flexibility is a must-have trait in the industry. Before joining the league, make sure you are comfortable enough with unpredictability in your everyday life. And once you’re in the industry, don’t get complacent during a strong market. A tough market is certain, so always plan for tough times ahead.

Reason 12: Lack of Training and Mentorship


Pre-licensing courses focus on the rules and regulations of real estate. However, these courses won’t teach you how to actually be a real estate agent. Your brokerage is the one that will teach you the nitty-gritty knowledge you need to survive in the industry. Thus, the training program of the sponsoring broker you’ll choose must match your learning style. 

The training program, not the commission split, is the most important thing to consider when choosing a brokerage. When interviewing a potential broker, ask these questions:

  • What type of training do you offer?
  • How long is the program?
  • What teaching methods do you use?
  • What happens after training?

Once you’ve answered these questions, determine if the brokerage’s program aligns with your specific needs. You also need to know if it will contribute to your success. 

Reason 13: Burnout

real estate agent not setting boundaries

As mentioned earlier, you need to work more hours to earn more income. Many agents work more than 50 hours a week to achieve their desired salary. They hustle day- and year-round, being available to clients even past working hours.

However, you need to set boundaries to keep yourself on top of your real estate game. Plus, no amount of money can pay the worth of your health and relationship with your loved ones.

With that in mind, make sure to schedule at least one day off per week. In addition, set an hour a day to exercise, eat, and do other relaxing techniques. Avoid accessing certain work-related applications during specific hours.


87% of real estate agents fail within their first five years. But there’s no need to be afraid. Use the steps outlined in this article as an action plan to be successful in this worthwhile profession.

Need help in generating leads and ultimately converting them?
Click here.

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