In 2017, over 10,000 real estate agents quit the industry. Why could this be?
If selling houses is ‘easy’, what’s the reason behind the departure of so many agents? Are real estate agents rich, or struggling? From my observations, I believe that, for many real estate agents, it’s a combination of reasons, including all or some of the following:
Meet, sell, repeat… the life of a real estate agent is a busy one and there’s never a guarantee of the next vendor walking through the door. Even in the good times, when it is a sellers’ market and buyers are motivated to purchase, the challenge comes from the surplus of other agents vying for business.
Being part of this competitive industry means you have a fluctuating income and it can be difficult to stay on top of finances. It is essential to budget for a rainy day but if you’re not making a great deal of money in the first place this might not be possible.
Lack of skill or training
When done the right way, real estate has the potential to be one of the most profitable careers you can have without extensive formal qualifications.
However, nothing compensates for experience. While it’s not currently possible to be a Professor of Real Estate, the agents who have put the time in are the ones who know how to navigate the challenges of the industry.
The first few years can be “make or break”. Real estate ‘newbies’ lose confidence when the going gets tough and sales begin to take longer due to a slower market.
Low incomes in real estate
As with most industries, there are those turning over a fortune, those making a decent living and those who are finding it difficult to make ends meet.
Many people believe agents pocket the entire commission earned on a home sale but as an employee you’d know this is definitely not the case. Even as a sole operator or Principal, you’ll have a lot of expenses that you need to cover. Office rental, marketing transport, software licensing and insurance all add up. There’s also the cost of looking good, which is important if you want to present yourself as successful and professional.
And from what I’ve observed after over 40 years in the real estate industry, it’s for all or some of the above reasons there are many real estate agents quitting flat-fee operations, which offer low-cost services to home sellers and only give agents a small commission.
Even as an established agent, if you work for a business you will find yourself answering to someone. It can happen that more senior agents, while they enjoy selling, don’t appreciate being micro-managed by an increasingly younger person who might have less experience and know-how.
Those who are drawn to the real estate industry because of the promise of flexible working hours soon find this is a double-edged sword.
To really come out on top, you need to be available on weekends and after hours. You also have to live and breathe your job, being obsessed by market conditions and building your contact base of clients and partners.
Not everyone is suited to the industry. If you don’t naturally have good customer service skills or don’t have a desperate drive to help others, it’s a tough gig. And if you haven’t taken advantage of training to understand the finer points of the sales process, you’re less qualified to offer advice to clients and continue to engage with them.
A recent report from the Real Estate Institute of New South Wales shared that up to 65 per cent of real estate agents admit to feeling stressed. Over 40 per cent suffer from the physical symptoms of anxiety and a similar amount said work has a negative impact on their personal relationships.
When I’m out in the field, I hear of many real estate agents who report feeling overwhelmed and many say they’ve sought medical advice for stress. With this kind of evidence, it’s no wonder so many seek out alternative careers.
Don’t become an industry statistic
Of course, if you work in real estate and hate every moment, you should find another career. However, if you love your job and enjoy helping your clients find the perfect property, it’s a shame to reach a point where you have to leave because you can’t support your family or the stress is getting to you.
If you’re considering quitting, take a step back first to identify what’s causing your discontent. If it’s simply real estate stress, you could schedule some time off or speak to your boss about better managing your workload.
Alternatively, you might be tired of working for someone else and ready to step out on your own. Making this change can breathe new life into your career.
If this is the case and you have some money behind you, you could launch your own business and open a new agency. And while One Agency isn’t the only game in town, it makes a lot of sense to seek out the One Agency model. It’s a proven model, with an attractive set monthly fee under $1,000, that we know works as long as you follow our guidelines for managing your costs. And to help with any stress, we provide a supportive environment and a great deal of ready-made marketing collateral, giving you the opportunity to keep more profits in your own pocket.
To have a long-term career and generate the profits you deserve, it does take hard work. However, with the right business model and support behind you, it’s more than possible to love what you do and be paid well for it.