After a decade of training, coaching, and managing agents I’ve seen hundreds of agents leave the business broke. Sadly, many of them could have been — and should have been — successful had they done just a couple of things differently.
The fact is our industry turns over a third of its practitioners every single year. In other words, one out of three agents in business today, will be out of business a year from now. Try and think of another industry with that kind of failure rate.
The sad thing is that it doesn’t have to be that way. What’s worse is that we are even having seasoned veterans leaving the industry at an alarming rate because they are suddenly unable to make it. And to make matters worse, most of our industry leaders are just as lost as the agents they teach or manage.
But my purpose today is not to be depressing — actually far from it. I am very optimistic. I believe that there are only two primary reasons that agents fail today: time management and not enough business. If we solve those two problems we can reverse our industry’s high attrition rate. If you solve those two problems, you can be assured of a long and prosperous career. Okay, here they are:
Today most agents spend the bulk of their time in non-income-producing activities. Don’t get me wrong… they clock the hours, but they don’t close transactions. Last year the median Realtor work week was 40 hours and yet the bulk of that time is non-productive. From what I’ve seen it generally comes down to either the companies wasting their agents’ time or agents wasting their own time.
Many companies waste their agents’ time in a misguided attempt to help them be more productive. Some of the biggest offenders are floor duty, model home duty, sales meetings, caravan (a tour of new listings), and even many well intentioned training meetings.
I’m not against meetings, but productivity and the number of meetings is almost always inversely proportionate. The more meetings, the less productive. The more productive, the less meetings. Many times meetings are busy work subconsciously used to make unproductive people feel productive.
Training can be a waste of time as well. The number of letters after an agent’s name is generally inversely proportionate to the income level of the agent. It seems that the more agents train, the less productive they become. I’m not against training — I train agents for a living — but real training is that which increases productivity.
I’ve been forced to sit through hours of training while non-producing agents learned the latest changes in fill-in-the-blank forms. I think there is a much better way. The best way to learn to fill out those forms is to start doing real estate transactions and filling out forms for real. Same goes for listings. This is a field that can greatly benefit from on-the-job training.
What can you do to keep the company from wasting your time? Generally, if you sit down with your broker you can explain your need to make all your time productive and the broker will allow you to pass on much of the time-wasting activities. Of course, if you are not producing don’t expect to get the broker’s permission.
Besides the company wasting their agents’ time, however, is the more serious problem: the agent choosing to waste his or her own time. Think about it: If you want to earn $100,000 this year and work 50 weeks, your time is worth $50 per hour. If you waste an hour, you just robbed yourself of $50 in potential income.
Maybe it’s just honest time wasting, like blowing off the morning to go shopping, but more often it is the dishonest time wasting. Dishonest time wasting is when you lie to yourself. You make work to keep from focusing on productive work. I’ve been guilty of that very thing myself. I know that many times the last thing I want to do is prospect, so I’ve found anything under the sun to do instead.
That’s where discipline comes in. Block off your time, including your unpleasant tasks, and then when it’s time to do a certain activity, you make yourself do it. If your time is not structured, you will find yourself wasting much more of it. Be honest with yourself and structure your day so that you waste as little time as possible. That brings me to the other primary reason agents are failing today at an alarming rate.
Not Enough Business
Even though we are doing more real estate transactions than ever before, the average agent is doing half the number they did just ten years ago. Why is that? Because a small number of agents are doing extremely high volume while the rest are struggling just to get by.
Whether we like it or not, we need to be honest with ourselves as to why. Is it luck? No. Is it the broker playing favorites? No. It’s that customer shopping habits have shifted significantly over the last decade and we don’t get the luxury of picking where we want to get our customers. We have to go to where the customers are.
Sure, it would be nice to wish our customers all came from yard signs or referrals, like the good ol’ days, but as my grandfather used to say, “Boy, you can wish in one hand and spit in the other, and see which one gets full fastest.” In other words, wishing isn’t worth spit! We need to figure out where the customers are and go get them.
When I came in the business, the number one source of leads was yard signs. It was higher than nearly all other sources combined. That’s why it used to be so important to list. Because listings produced leads. If you had no listings, you had no yard signs. No yard signs, no sign calls. Listings were king.
Now twelve years later, only 8% of buyer leads come from yard signs. Take a wild guess what is today’s largest source of real estate customers? The internet. Over nine out of ten shoppers begin online and eight out of ten do most of their shopping online. And yet, the average agent only received four leads from his website last year resulting in not a single closed transaction.
Oddly enough, two-thirds of us have had a website for over five years. The problem is not our willingness to be online — it’s the effectiveness of what we are doing online. That’s like the busiest store in town having no sales. We are putting the information out there, and clearly the customers are using it to search. The disconnect is we are focusing on information when we should be focusing on sales.
And to have sales, you must first have customers. The problem is not the agent — it’s the technology. Most websites today are focused on giving out information, not on capturing leads. Giving out information is great, but there should be an exchange of value. The “price of admission” should be the customer’s contact information. We give it out for free.
But look at the most successful websites in our industry, like Trulia, Zillow, and Realtor.com. They all capture thousands of leads every week using our listings as “bait” and then sell those same leads to agents whose websites are ineffective. The customers are online and the technology is available to capture them, but most agents don’t have the right website to do it.
When I was a new agent, I had this very problem. So I was paying one major lead aggregator $1,300 per month for 50-60 low quality leads in my area. Most of the leads didn’t even have phone numbers so I had to try to turn an email address into a closing. That’s why I decided to build my own system for capturing leads — my LCM gateway.
Now a decade later, I’m licensing the latest version of my technology, the Ultimate Website to agents all over the US and Canada. Many of them have taken control of generating their own leads online and never have to worry about where that next transaction is coming from. The fact is that agents using my technology generate more inquiries in two days than the average agent does for an entire year.
So if you’re one of many agents who are worried about whether they will be able to make it in this business, don’t. You can easily succeed. In fact, you can thrive! You simply need to manage your time and start finding customers where the customers are shopping: online.