Some people indeed make money as realtors, but most fail. Working for a realtor can be more profitable than going into business yourself if you have an edge.
But why do so many fail?
I believe that this happens for many reasons. If you are aware of these, you’ll have a better chance of succeeding.
They Don’t Work Hard Enough
It’s a competitive business, and you need to work diligently to be involved with successful real estate investments. To succeed requires lots of work and many hours per week.
The top producers in the world spend at least 40 hours a week working on their real estate business. That means just about every weekday, and all day Saturday and sometimes Sunday morning too.
They take time during the middle of the day to eat lunch and run errands. They work evenings and sometimes even all night too.
They Don’t Handle Their Money Well
One of the biggest reasons real estate agents fail is that they don’t manage their money well enough to support themselves and their families until the next paycheck comes in. Many end up spending every dime, or borrow from friends and family, or buy on credit and go further and further in debt.
The only way to succeed is to learn how to handle your money so you can survive until the next paycheck comes. The process to become a real estate agent is an arduous one.
Money management will be one of the most valuable skills you can have. Real estate agents need a written plan that tells them how much they must earn each month, or week, or even every day.
They must know exactly how much they will need to survive until their next paycheck comes in. Agents who don’t have a written plan and a set of rules that tells them how to live without an income usually end up filing bankruptcy within three years.
They Don’t Market Efficiently
Not everyone can be a top realtor, but it’s possible for almost anyone willing to invest the time and work hard to be an average marketer. The top 1% of real estate agents produce about 40% of all commissions generated by realtors.
They work very hard to do that and should be rewarded because they bring in so much business. Successful marketing for real estate agents requires innovation and hard work.
There are many ways to market effectively, even by the small percentage of agents who don’t have an advertising budget. The most important thing they do is learn how to use the available tools for free.
They Overcharge
By charging too much commission per deal, real estate agents rob themselves of the opportunity to find more real estate volume and make more money.
They can often be out-priced by other agents who charge less or get paid nothing at all for some transactions such as FSBOs (For Sale By Owners). Many areas require a minimum commission, so you get paid no matter the price at which you list your properties.
They Don’t Have a System
In business, it’s risky to have no system in place for anything you do. There are systems available everywhere. Even if you dislike computers, you can hire someone to handle that for you at a very reasonable price.
Having the right system in place will put your real estate business on autopilot and free up much of your time to run it better. Every task must be able to be done by anyone who knows how it’s supposed to be done.
Any realtor who does a few of these things will see a difference in their results. Most agents fail because they do them all, or at least most of them.
The best chance you have to succeed is to avoid making the same mistakes made by most other realtors.
