What is the real reason why 90% of agents fail? Technically the statistic says that 87% of agents fail within the first five years in the industry.
According to the National Bureau Statistics of Labor, on average, 50% of all businesses will fail after five years. So you have a 37% higher chance of failing in real estate than in any other profession. Why is that? One reason I believe is that the barrier to entry to get into real estate is almost nothing. In other words, it takes 600 hours to get your cosmetology license, but only 135 hours to get your real estate license. On top of that, the test itself is not very difficult to pass. These things make the industry extremely competitive because it gets over-saturated.
Meanwhile, if you think about doctors, attorneys, and lawyers, they go to school for years. They incur hundreds of thousands of dollars of debt for their degree. They do end up with a decent paycheck, but they cap out. When I sold real estate full time, I made more money than any doctor or lawyer that I knew. However, it was because I was specialized in what I was doing. So the reason why most agents fail is they do not take their industry seriously.
You have to treat real estate like a doctor treats medicine. Just because there are a plethora of agents doesn’t mean you can’t stand out. You just need to put more work in to be different. The thing about real estate is that you are valued as a commodity. If you act like all of the other realtors, you can be replaced by any of them. When you are a commodity, the only thing that you have to differentiate yourself is to lower your commission.
The problem with that is, you are always going to have somebody that's going to drop their prices even lower than what you're able to do. That means that you're in this never ending battle of commission wars. So that solution doesn’t work. The other option is doing things completely differently than everyone else is doing. For example, I've gone on listing appointments and somebody says, “Krista, the last agent said that marketing's not important at all”. To that I say, “I really appreciate that they said that to you. But the bottom line is, Mr. And Mrs. Seller, that is just not true. And here is why.” I talk about it and then show them.
In 2021, I took all the houses in Brentwood that were under one acre and showed both the average and median list price. And then I compared what mine were. I found that I sold my properties between 16 and 18% higher than my competitors, around $166,000. And mind you, there were over 20 properties just that met that criteria in that one city. Showing data like this to clients is crucial to demonstrating how you stand out, and why you earn your commission.
Another way I demonstrate that I’m worth my commission is by talking about things that most agents are not talking about. Most agents talk about things like brokers’ tours and open houses. Meanwhile, I'm discrediting that and saying why brokers’ tours and open houses are ineffective, as well as why my marketing strategies are far superior.
I’ll tell clients how I utilize video and social media to get thousands of eyes on their property. I also explain that I know how to increase engagement and watch time, as well as how that affects the seller. I let them know that according to the National Association of Realtors, 67% of buyers will walk through a home that they see online. Meanwhile, it’s common for open houses to have zero attendees. That doesn’t mean you shouldn’t ever do open houses, it just means you should also market your property online. Most people start their home search online, so if your property is listed there and in traditional ways, you put out a larger net of potential buyers.
98% of people start their search online, and an average of three to six months before they're ready to take action. That makes it the realtor’s job to get homes online, where people are looking. Then you can target and re-target people that were looking at properties matching certain criteria three to six months ago, because now they're actually ready. The bottom line is, we all know it, that if you're holding an open house, it doesn’t really serve the seller. You're doing it for you.
To not be a commodity, you need to have a unique selling proposition. I’ll break down what mine is. Last year, my real estate company did $1,560,000 of gross real estate commissions that we took in. I am a full-time coach now, so I don't talk to any sellers or any buyers. I've taught my brother to be me. He's my representation. We utilize my system and strategies to market properties. Our content is helping us before we arrive. What does that mean? That means we're creating content.
We're showing, not telling what we do with our properties, how we market ourselves, how we are so different, and how that difference actually affects their bottom line. They they know about that before I even show up to the door, meaning I am winning before I arrive. I'm positioning myself as the expert and developing a relationship with them. They know my value, so commission doesn’t even come up. My company made that kind of commission without me ever going on a listing appointment because what we offer is so unique and so different.
The reason so many agents fail is because they are not willing to increase their value, or to serve more. If you are willing to invest in this skill and knowledge to truly position yourself as different, you can make a significant amount of money in real estate. You can make more than any doctor or attorney.
Do not let reducing your commission be the only thing you can do. Increase your value, increase your education, increase your knowledge, increase your skill. That is how you can become one of the 13% that make it. You’ll even reach the top 1% of agents that do 99% of the business in real estate. That's how you do it.
