5. Missing a Business Plan
Without a business plan in place, you won’t have a path that can lead you in the direction you’re trying to go. 87% of real estate agents fail because they’re missing a business plan that outlines the steps they need to take in order to reach their goals.
To prevent this, use a business plan template, such as one offered by the U.S. Small Business Administration. In your plan, outline your executive summary, conduct a market analysis, detail your marketing efforts, and more. If you ever find yourself stuck, you can revisit and review your business plan to get back on track and make any necessary changes to keep moving forward.
How to Succeed As a Real Estate Agent
Now that you know why 87% of real estate agents fail, it’s time to look at how you can beat these odds and grow a successful business. Below, you’ll find tips that can help you perfect your craft and become a leader in the real estate industry.
1. Get Your Finances in Order
As you know, one of the top reasons why real estate agents fail is because they run out of money. To be a successful real estate agent, having a firm grasp on your financial situation is a must.
With that said, you need to understand your internal motive in order to act. What are your expectations? What do you need to produce vs. your goals? Oftentimes, the gap between what we need and our goals creates a lot of unhealthy tension for people. So, I say, determine what you absolutely need financially and cover that, then set some goals.
For example, what is your monthly cost to run your household? Rent, mortgage payment, kids, dogs, food, dry cleaning, everything you spend money on – get that number. Let’s say it’s $24,000 a year. Then, what about your work? Let’s say it’s $8,000 a year, bringing you up to a total of $32,000 a year needed to survive. Next, how much outside monthly income do you have? Include spousal income, rental unit income, and other revenue streams.
Once calculated, subtract this number from your total. However, for now, let’s say this is $0. Also, let’s say your average real estate commission check is $8,000. Well, you might be saying, “Gosh, I only need to sell one house every four months to survive and sustain my business.” Feel good about it. So know exactly what your costs are and then set your goals on top of that.
2. Create a Morning Routine
First, it’s important to start your day by waking up on the right side of the bed. Creating a morning routine is a great way to set the tone for the day to ensure it’s going to go smoothly. Implement these steps into your morning routine, and you’re sure to see positive results in no time:
- Repeat affirmations: Every day, write this affirmation 30 times: “I earn X amount of dollars or more.” Your reticular activating system will locate and focus on whatever you think about the most, and you will begin to see it everywhere.
- Create a daily action checklist: These are things that you know you have to do that day that would make you money. Prospect for leads, set appointments, take listings, get offers, close deals!
- Listen to something motivational or something that makes you feel good: It’s not Howard Stern, not Constant Negative News, and not Fox Fair and Balance. None of that stuff. Get your mindset right. Watch some videos that will get you fired up!
3. Focus on Lead Generation
Once you’ve started your day on the right foot, it’s time to get to business. In order to grow your real estate business, you need to focus on generating leads. Failing to focus on leads is one of the many reasons why real estate agents fail. Below are some real estate lead generation ideas that can help you find new potential clients:
- Role-play: Practice your scripts 15 to 20 minutes a day, so when you speak with real clients, you know what to say, how to say it, and ultimately get you more business.
- Call every new Expired Listing, FSBO, and Make Me Move property: Don’t be afraid to screw up. Make every mistake. You’re brand new, who cares? You’ll learn the mistakes that agents make when they list these properties when they’re not really clear to the seller what it takes to get it sold. Or find out if sellers are motivated at all.
- Call/contact five people that you know and say. “Would you like a free home valuation?”: Who do you know that’s thinking about buying or selling? All the important questions you can ask to your existing database for lead generation.
- Lead follow-up: Follow up on all your generated leads and ensure no leads slip through the cracks.
4. Be the Knowledge Broker
Lastly, if you don’t want to join the 87% of real estate agents that fail, it’s essential you become an expert in the field. This means learning how to find a real estate mentor who can teach you the ropes, attending conferences and networking events to gain first-hand knowledge, and taking time to stay up to date on industry trends.
In addition to these tips, implement these habits into your daily routine, and you’ll become the knowledge broker you dream of being before you know it:
- Read Keeping Current Matters every day: Be up-to-date with the latest real estate analytics and trends of the market so you can speak powerfully to customers about why now is the best time to buy and sell.
- Study the daily hot sheets: There’s nothing more important than knowing every day what’s listed, what’s sold, what’s canceled, what’s expired, and what’s closed. What were the numbers? What were the prices? Know the market inside and out.
- Host open houses every weekend: You do all of this for nine months as a brand new agent, a rebounding agent, or a fading winner, and you will become a rising star. What do we know will happen? You will talk to a lot of people. You’re going to have some upsets. You’re going to have some tremendous wins. You’re going to create a lot of momentum, and you’re going to be that 13% that succeeds in real estate!
Wrapping Up: Why Do Most Realtors Fail?
Being a successful real estate agent is easier said than done. After all, there’s a reason 87% of real estate agents fail. However, knowing the mistakes these realtors make, such as failing to follow up with clients or not having adequate funding, can help you prepare and grow a successful real estate business.
At Tom Ferry, we can help you become the best real estate agent you can be. Whether you’re wondering how to build your brand as a real estate agent or are interested in a real estate agent coaching program, we have the tools and expertise to help you succeed.
