Why Do New Sales Associates Fail?

When you’re starting out as a new agent, your career possibilities seem endless. But that excitement can quickly fade and be replaced with frustration, money woes, and self-doubt. Reality hits hard when rookie agents realize how much they have to do in order to succeed in this complicated business.

“A new agent has many things to think about, and that can be tough,” says Kim Novak, principal broker and owner of Novak Advantage Real Estate in Layton, Utah. She and other brokers have witnessed some of the best and brightest people end their real estate careers before they could experience any measurable success. But brokerage leaders can use the following insights to help new agents turn their failures around and guide them toward a path of business growth.

Embracing the role of entrepreneur, mentally and financially. If a salesperson is strictly focused on that next commission check, they can’t put their heart and soul into building relationships with clients. “They need to move from thinking like an employee to embracing the fact that they are now a small-business entrepreneur,” Novak says. “I don’t believe any of that is taught in real estate school. You have to understand that upfront.”

She recommends that new agents take a small-business training seminar or webinar to help them begin thinking like business owners, especially when it comes to finances. Commission checks aren’t the same as a salary, she says. Checks can be large but sporadic, so new agents must be careful with their money, making good budgetary choices. This includes paying taxes and organizational dues and investing back into their business.

Working part-time vs. full-time. Clients want an agent who can show them a house at any time and who they can call with questions throughout the day, Novak explains. An agent who is doing real estate on the side while working another full-time job will frustrate clients and themselves. They won’t have enough hours in the day to make calls, find homes, market themselves, plan open houses, or do anything else that will make an agent successful, she says.

Valuing ethics. “My word is my bond,” says Tiffiney Welles, broker-owner of Tenax Real Estate and Investment Properties in San Diego. “I wish everyone worked that way in this industry. It could give us better credibility.” Members of the National Association of REALTORS® must adhere to the Code of Ethics. Welles suggests that new agents must make this part of their core values or mission statement. Write it down, add it to your website, and share your values with clients. 

Choosing the right brokerage. Novak says new sales associates are often flattered that every brokerage—from the smallest to the largest—courts them to come on board once they get their license. However, in order to find a company that complements who they are and how they want to position their business, the agent must interview the broker as much as the broker interviews the agent. Wouldn’t you rather have dedicated practitioners and less turnover instead of always trying to work with agents who aren’t the right fit for your office?

Lacking sufficient start-up money. Unless an agent has a partner or spouse who will help support them, they’ll need to have money stored away. Novak suggests that agents stash away at last six months of savings to pay bills, taxes, health insurance, food, and transportation before they can realistically plan on receiving commissions. According to the Bureau of Labor Statistics, real estate agents’ median annual wage is $44,090, and 35 percent of all agents make less than $29,940 in a year. Only 10 percent of all agents make more than $112,570 yearly.

Many new agents mistakenly believe this is a low overhead business, Novak says. They think that if they have a license and a computer, they’re in business. Many new agents also believe it's the company's job to supply them with leads, not truly understanding what "being in business for yourself" means, she explains.

Choosing training programs wisely. “Every new class or program in real estate seems to cost $500,” Novak says. “And most of the people giving the classes claim that you will make that money back in one transaction.” She adds that all the ZIP code buying deals on listing sites can truly hurt new associates’ bottom lines. “You don’t need these, especially in the beginning,” she says. If an agent shows up every day, takes the training available at their firm, and works their target market, it will pay off. There will be droughts in business, she says, but agents have to keep moving forward.

Finding a mentor. As a broker, Welles has mentored many new agents, and sometimes she helps those she meets in the field. Every practitioner needs someone to guide them, to take an interest in who they are and what their goals are, she says. Brokers could set up formal mentorship programs at their firm or facilitate ways to connect new agents with seasoned pros.

Ineffective marketing strategies. An agent must choose their market—whether it’s high-end, downtown, or beachfront properties—and learn about it inside and out. Then, get out there, Welles says. From face-to-face daily interactions to social media conversations, new agents must communicate that they’re in real estate now and start demonstrating their expertise. They can share market insights and trends or buying and selling advice. Welles also suggests that new agents get out in their community and join organizations such as Rotary clubs, women’s councils, and other places where their skills are needed. The point is to be as engaged as possible, she says.

Lacking self-motivation. To be successful in real estate, it will take work, time, and a willingness to get out of your comfort zone. Welles had an agent in her office who was there every day. He had all the knowledge, he knew what he had to do, but he couldn’t embrace talking to people. She understands how hard it can be starting out, but she believes that if an agent hasn’t found their groove in the first three to six months, they probably won’t make it. It’s OK for brokers to suggest that this field isn’t right for everyone, she says. “You cannot help someone who won’t help themselves.”