Top 8 Reasons Why Real Estate Agents Fail (+ Tips to Overcome Them)

Are you a newly-licensed real estate agent looking to get your career off the ground? While the prospects of a prosperous and successful career in real estate can be exciting, it is important for you to know what pitfalls are out there. Understanding why some new agents often fail sets you up for success – by learning best practices from those who have come before, you can increase your chances of success right out of the gate. Here we’ll explain eight common reasons why many new real estate agents end up failing, along with concrete tips on how to avoid these mistakes in order to position yourself for long-term success!

What Percentage of Real Estate Agents Fail?

Becoming a professional real estate agent can be a challenging yet rewarding career path. However, many people in the industry warn against it, citing the high percentage of agents who fail in their first year. But is it really as discouraging as people say?

Firstly, let’s get to the numbers. According to a survey by the National Association of Realtors® (NAR), 87% of new real estate agents fail in the first five years of their career. It’s important to note that the first year is especially tough for new real estate agents. According to the same NAR survey, 80% of those who fail do so within the first year. That’s a startlingly high number. But before you start getting discouraged, it’s important to understand why so very many agents fail. That is what we will discuss in this blog post.

1. Getting a Real Estate License For the Wrong Reasons

rich woman in front of private plane

Entering the real estate industry with misguided motivations can often lead to disappointment and failure. While becoming a real estate agent may seem like a lucrative and glamorous career choice, it requires hard work, dedication, and perseverance to succeed. Pursuing a real estate professional license for the wrong reasons can result in unmet expectations, dissatisfaction, and ultimately, failure in the profession.

One common misconception that leads people to pursue a real estate license is the belief that it offers a quick path to wealth. While it’s true that successful agents can earn substantial incomes, this usually comes as a result of years of hard work, building a strong client base, and consistently delivering exceptional service. Those who enter the field solely for financial gain may lack the patience and commitment required to achieve long-term success. This can lead to frustration, burnout, and eventually, the decision to leave the industry.

Another misguided reason for obtaining a real estate license is the desire for a flexible and leisurely lifestyle. While being a real estate agent does offer some degree of flexibility, it also demands a significant amount of time and effort. Agents are expected to be available for their clients, often working evenings, weekends, and holidays to accommodate showings, negotiations, and other crucial aspects of the transaction process. Those who enter the field seeking a relaxed work schedule may quickly become overwhelmed by the demands of the job and struggle to maintain a balance between their professional and personal lives.

Some individuals may be attracted to the idea of becoming a real estate agent because they believe it requires minimal training and education. While obtaining a real estate license does not require an extensive academic background, it does necessitate a commitment to ongoing learning and professional development. The real estate industry is constantly evolving, with new regulations, technologies, and market trends emerging regularly. Real estate professionals who fail to stay current on these changes risk falling behind their competitors and losing the trust of their clients.

2. Working Part-Time

part time vs. full time

Working part-time as a real estate agent may seem like an appealing and flexible option for those looking to balance their professional and personal lives. However, this decision can often lead to failure in the highly competitive and demanding world of real estate. There are several reasons why working part-time in this field can hinder your chances of success, and understanding these factors is crucial for anyone considering taking the plunge into a real estate career.

Firstly, the real estate industry requires a significant amount of dedication and time commitment to excel. As a part-time agent, you may not be able to devote enough hours to building relationships with clients, conducting market research, and staying updated on industry trends. This lack of availability can lead to missed opportunities and a weak professional network, which are essential for generating leads and closing deals as a successful real estate agent. Consequently, your chances of thriving in the industry are greatly diminished.

Moreover, part-time agents often struggle to provide the same level of service and expertise as their full-time counterparts. Real estate transactions can be complex and time-sensitive, requiring agents to be accessible and responsive at all times. Part-time agents may find it difficult to manage their schedules and prioritize their clients’ needs, resulting in a less satisfactory experience for both buyers and sellers. This can damage your reputation and make it challenging to acquire new clients or retain existing ones.

Another pitfall of working part-time as a real estate agent is the potential for financial instability. A successful career in real estate largely depends on commission-based income, which can fluctuate depending on market conditions and the number of transactions completed. Part-time agents, who are likely to close fewer deals due to their limited availability, may struggle to maintain a steady income and cover their expenses, such as marketing costs, licensing fees, and continuing education requirements.

Furthermore, part-time real estate agents may find it difficult to stay competitive in the ever-evolving world of real estate. With constant changes in technology, marketing strategies, and industry regulations, it’s crucial for agents to continually invest time and effort into their professional development. As a part-time agent, you may not have the bandwidth to keep up with these changes, leaving you at a disadvantage compared to your full-time peers.

3. Lack of Training


The real estate industry is a complex and ever-changing landscape that requires ongoing education and guidance to navigate successfully. A lack of proper training as a real estate agent can significantly hinder your ability to thrive in this competitive field, leading to potential failure.

One of the primary reasons a lack of training can lead to failure is that it leaves agents ill-equipped to handle the various aspects of real estate transactions. From understanding local market trends to mastering negotiation tactics, agents must possess a wide range of skills to succeed. Without adequate training, you may struggle to meet your clients’ needs effectively, resulting in lost opportunities and a damaged reputation.

This is where Bernie Gallerani Real Estate stands out from the competition. Recognizing the importance of ongoing training and mentorship, we provide a nurturing environment for our agents at all stages of their careers. With access to a wealth of resources, including one-on-one coaching, agents within our brokerage are empowered to develop their skills and knowledge continually.

4. Running Out of Money

no money

Running out of money is a significant concern for many real estate agents, especially those who are just starting in the industry. A career in real estate often requires substantial upfront and ongoing expenses, which can put considerable financial strain on agents, particularly during the initial stages of building their business. Failing to manage finances effectively or encountering unforeseen costs can lead to failure in the competitive world of real estate.

The primary reason that running out of money can cause failure is the commission-based nature of a real estate agent’s income. It can take several months to close deals and receive commissions, which means most real estate agents must be prepared to cover their personal and professional expenses during this time. Those who fail to plan for these initial lean periods may find themselves unable to meet their financial obligations, which can result in mounting debts and an inability to focus on growing their business.

Additionally, real estate agents face numerous ongoing expenses, including marketing costs, licensing fees, continuing education, and membership dues for professional organizations. These expenses are essential for maintaining visibility in the market, staying updated on industry trends, and complying with regulations. Agents who run out of money may be forced to cut corners in these areas, which can negatively impact their professional reputation and hinder their ability to attract and retain clients.

Another factor that can contribute to financial difficulties is the lack of a consistent income. Real estate markets can be volatile, and agents may experience periods of low sales activity. During these times, it can be challenging to cover expenses and maintain a positive cash flow. Agents who run out of money during these slow periods may find themselves unable to bounce back when the market picks up, ultimately leading to failure.

Moreover, the pressure of financial struggles can take a toll on an agent’s mental and emotional well-being. The stress of worrying about money can distract from the essential tasks of prospecting, nurturing client relationships, and closing deals. This can lead to decreased productivity, poor decision-making, and a reduced ability to provide exceptional service to clients, further exacerbating financial difficulties.

5. Poor Time Management Skills

bad time management

Poor time management skills can be a significant obstacle to success in the fast-paced and demanding world of real estate. As an agent, you are often juggling multiple responsibilities, including prospecting for new clients, managing existing relationships, attending showings, negotiating contracts, and staying updated on industry trends. Failing to manage your time effectively can lead to missed opportunities, dissatisfied clients, and ultimately, failure as a real estate agent.

One of the primary ways poor time management can hinder your success is by limiting your ability to generate new leads and grow your client base. Prospecting for new business is a crucial aspect of a real estate agent’s job, but it requires consistent effort and dedication. Agents who struggle with time management may find it challenging to allocate sufficient time to this essential task, leading to a stagnant pipeline and reduced income potential.

Additionally, real estate transactions often involve tight deadlines and time-sensitive tasks, such as submitting offers, coordinating inspections, and closing deals. An agent with poor time management skills may struggle to keep track of these deadlines and prioritize their workload effectively. This can result in delays, errors, and even the loss of clients who become frustrated with the lack of responsiveness and professionalism.

6. No Business Plan

business plan

Not having a business plan can be a significant cause of failure for real estate agents, as it leaves them without a clear roadmap to achieve their professional goals. A well-crafted business plan serves as a guide for successful real estate agents everywhere, outlining their objectives, strategies, and action steps necessary for success in the competitive real estate industry. Operating without a plan can result in a lack of direction, inefficient use of resources, and missed opportunities, ultimately leading to failure.

One of the primary consequences of not having a successful business plan is the inability to set clear goals and objectives. Real estate agents need to have a vision of what they want to achieve, both in the short term and long term. Without a business plan, agents may struggle to define their targets, measure their progress, and adjust their strategies accordingly. This lack of clarity can lead to stagnation and a reduced sense of purpose, making it difficult for agents to stay motivated and focused on their objectives.

Another issue that arises from not having a business plan is the inefficient use of resources, including time, money, and effort. A business plan helps agents allocate their resources strategically, ensuring that they are investing in the most promising opportunities and prioritizing activities that will yield the highest return on investment. Without a plan, agents may find themselves spreading their resources too thin or focusing on less profitable activities, which can hinder their ability to grow their business and achieve financial success.

7. Failing to Follow Up With Clients

man on the phone

In an industry where building and maintaining strong relationships is essential for success, neglecting client communication can have severe consequences. Effective follow-up demonstrates professionalism, attentiveness, and genuine concern for the client’s needs – all attributes that clients look for in a trustworthy agent.

One of the primary ways that failing to follow up with clients can hinder your success is by creating the impression of disinterest or neglect. Clients entrust real estate agents with one of the most significant financial decisions of their lives, and they expect their agent to be fully engaged and responsive throughout the process. When agents fail to follow up promptly or consistently, clients may feel undervalued and question the agent’s commitment to their best interests. This can result in clients seeking out alternative agents who are more attentive to their needs, leading to lost business and potential damage to your professional reputation.

Another consequence of poor follow-up is missed opportunities to address concerns or provide valuable information. Real estate transactions can be complex and confusing for clients, and they often have questions or concerns that require timely attention. Failing to follow up on these issues can leave clients feeling frustrated, overwhelmed, and unsupported, which can ultimately jeopardize the success of the transaction. By proactively addressing client concerns and providing regular updates, agents can build trust and demonstrate their expertise – factors that contribute significantly to client satisfaction and long-term loyalty.

Moreover, failing to follow up with clients can negatively impact the potential for referrals and repeat business. Satisfied clients are more likely to refer friends and family members to their agent and return for future transactions. However, without consistent follow-up, past clients may not feel a strong connection to their agent and may be less inclined to recommend their services to others. In an industry where word-of-mouth referrals are a crucial source of new business, this can significantly limit an agent’s ability to grow their client base and achieve long-term success.

8. Now Knowing How To Lead Generate (or Qualify Leads)


In an industry where building a robust client base is essential for success, real estate agents must possess the skills and strategies necessary to identify potential clients and assess their readiness to engage in real estate transactions. Failure to do so can result in wasted time and resources, and ultimately, hinder a real estate agent’s ability to succeed in the competitive real estate market.

One primary consequence of not knowing how to generate leads is a limited pipeline of potential clients. Real estate agents who struggle to generate leads may find themselves relying solely on referrals or waiting for clients to come to them, which can significantly restrict their opportunities for growth. Without a consistent stream of new leads, real estate agents may have difficulty sustaining their business and achieving their financial goals. Developing effective lead-generation strategies is crucial for agents looking to build a thriving real estate practice.

In addition to generating real estate leads, agents must also know how to qualify them effectively. Qualifying leads involves assessing a potential client’s readiness, motivation, and ability to buy or sell property. Real Estate agents who fail to qualify leads properly may end up investing their valuable time and resources in clients who are not serious about engaging in a transaction or who may not be financially prepared to do so. This can result in lost opportunities, as real estate agents may miss out on working with more motivated and qualified clients.

Lastly, the inability to generate and qualify leads can contribute to burnout and frustration for real estate agents. Spending time and effort on unproductive leads can be demoralizing and exhausting, leading real estate agents to question their capabilities and potentially consider leaving the industry altogether. By developing effective lead generation and qualification strategies, agents can increase their chances of working with motivated, qualified clients, ultimately enhancing their job satisfaction and long-term success.

Working as a real estate agent can be an incredibly rewarding experience. Not only do you get to help your buyers and sellers make arguably one of the biggest investments of their life, but you also have the opportunity to create a lucrative business. However, it’s important to know what common pitfalls you may face when selling real estate, when starting out, and how to overcome them.

At Bernie Gallerani Real Estate, we are dedicated to providing our real estate agents with training, resources, and professional support so they can succeed in the long run. Our real estate agents have the high-quality tools and strategies necessary for creating a thriving career that continues to expand into more areas of success. If this sounds like something you would be interested in, join our real estate team and start reaching higher heights today!

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