Special Report
From a Special Inman Report on Newbie Agents and Why they fail by Gill South on April 27, 2016
This report is the result of a survey of real estate agents across the country, how they feel about being a new agent. I have addressed these issues inline in bold and italics.
Key Takeaways
- The area where new agents seem to struggle most is lead generation: 47 percent of respondents said including lead generation is critical in initial training, and 37.55 percent said lead generation was the most important area to work on in ongoing training.
- The best thing a new agent can do is find an excellent and generous agent mentor or coach to whom they should make themselves indispensable.
- More than three-quarters of respondents (77.39 percent) said that new agents fail at least in part because they are unprepared for the realities of working as an independent contractor.
- New agents spend too much time on marketing and too little time on lead generation, said respondents.
Even the most highly rated training-centric franchises are too busy or don’t feel it’s in their best interests to give rookies the one-on-one hand-holding experience that these beginners really need in the first year. The Force Realty gives agents the mentorship and coaching of it’s owner, a 30 year veteran of real estate, both residential, commercial and investments. See next…..
In order to help new agents thrive, brokers need to step up and give their new agents more help with lead generation, our research found, with 37.55 percent of respondents believing this was the most important area to work on for ongoing training and 47 percent believing it was a priority in initial training. At The Force Realty we first provide leads and then we teach how to self create them.
For their part, newcomers to the industry have to switch off the real estate reality television and be ready to hit the ground running with a wide sphere of influence. Before entering the industry, they should do their research on the brokerages in the local area that suit them best and make sure those brokerages can substantiate their training claims, said respondents. At The Force Realty, we encourage you to research all firms and then challenge you to find one that offers more to the success of the broker. The low fees are just a bonus!
According to experienced agents in the survey, real estate newbies should also make sure they have a barrelful of money at the ready for the first year in the business, when their focus should be on education, learning the ropes of every part of the transaction and getting to know their market in-depth rather than making their first million. At The Force Realty we can show you how to kick start your business so your barrelful of money isn’t so large. Eileen, herself, sold 2 houses and listed 1 on her first day in real estate, so she doesn’t believe that you have to be rich to begin a new practice in real estate nor do you need a slow ramp up time.
Two pieces of advice stand out in our research. The best thing a new agent can do is find an excellent and generous agent mentor or coach to whom they should make themselves indispensable (if they are wise). We’ve got that covered!
As one successful second year agent put it: “Find an experienced agent and cling to their ankles and don’t let them shake you off. Learn everything they will teach you.”
And if agents are to survive after two years — and only 10 to 20 percent will, according to Jay Niblick of WizeHire — these beginner agents need to get on top of lead generation as soon as they can. This can be done in a variety of ways, whether it is by joining an inclusive team, buying a book of business or just grinding out the work and making calls every day. OR, most importantly, JOIN THE FORCE REALTY!
The initial training doesn’t prepare agents for the real job.
Balancing budgets can be a real problem for agents who aren’t used to the costs associated with their new job. When respondents ranked different failure-rate factors in order of importance (1 being most important and 5 being least), “agents don’t understand how to manage their finances” was ranked the fifth most-important failure-rate factor.
The public’s perception of real estate erroneously drives a new agent’s expectations, added a marketing and tech executive in the industry.
“Many see real estate as a way to have a part-time job with big pay. They do not understand the complexities of the business. Let alone understand that it is a business.”
The CEO of a local Realtor association said he regularly meets new agents who need a reality check.
“New agents I see have stars in their eyes about making a lot of money. Many do not understand the time commitment involved to succeed, and many do not have good sales skills.”
He was not happy with the current broker training or supervision on offer in the industry.
“Brokers are falling down on the job by not training and supervising new agents enough,” he added. “When a broker hires a new IC [independent contractor], he or she should take a ‘hands on’ approach to the training and supervision to ensure the opportunity for the new hire to become successful.”
Real estate reality TV is not doing the industry any favors, added a number of participants.
Said one agent of three years: “I think most people getting into real estate see reality TV shows that show these superstar agents making huge amounts of money. They think it is easy based on that. Actually, it takes a lot of self-discipline that most people do not have.”
The low barriers to entry remain part of the equation — and the new agents agree with this.
“It takes 30 hours and a GED in Kansas to license. I could do it on a whim. I am entrusted with my clients’ most expensive asset — I should have more than a coffeeshop education,” said one.
Added another new agent with a business background: “More extensive business training, including prospecting training, and mentoring will allow agents to truly learn the business before being thrown to the wolves. Too many new agents don’t have any business training and don’t know the transaction details and legal ramifications.
“Those with little formal education can seriously falter. It’s like being thrown into the deep end without the slightest notion of how to swim, or even float!”