Why do most real estate agents struggle to stay in the business? The response lies in their failure to adhere to the fundamental principles embraced by all prosperous agents.
NAR's data reveals an alarming 87% failure rate among real estate agents within their initial five years, and those exiting beyond this period typically cite inadequate earnings as the primary reason.
If you don't make enough money, you won't be able to stay in the business.
Here are two easy ways to avoid being part of the 87% who fail and quit in real estate. Measure yourself against these and make sure your actions align with what's needed to thrive in the business.
Know what to do.
Know what not to do.
Utilizing The Pareto Principal.
In real estate, the 80/20 principle is at play—20% of our actions result in 80% of our income, while the remaining 80% of our actions contribute to just 20% of our income. It's crucial to recognize and excel in the activities that fall within this critical 20% to maximize your earnings. For instance, if a real estate agent avoids the 20% activities due to personal preferences, they're inadvertently avoiding success. Choosing to spend the majority of your time in the less impactful 80% consciously limits your potential for increased earnings.
Many realtors feel overwhelmed by the administrative tasks inherent in our business. However, by solely focusing on administrative duties, they miss out on crucial sales tasks like lead generation and conversion. It's a matter of prioritizing between administrative tasks, such as overseeing paperwork, and tasks directly related to sales and revenue generation.
To maximize success in real estate, realtors should dedicate their time to high-impact activities that directly contribute to revenue generation. This involves a strategic focus on making calls to potential clients, proactive prospecting, and engaging in face-to-face interactions, whether in person or through virtual platforms like Zoom. Door knocking, another effective approach, allows realtors to directly connect with potential clients in their local communities.
Engaging in messaging, whether through emails or other communication channels, is crucial for maintaining consistent contact with leads and clients. Additionally, realtors should invest time in honing their skills for compelling listing presentations. A well-crafted presentation not only showcases a property effectively but also reinforces the realtor's expertise, fostering trust with clients.
Furthermore, effective negotiation is a cornerstone of successful real estate transactions. Realtors should prioritize refining their negotiation skills to secure favorable outcomes for their clients. By concentrating on these high-impact activities, realtors can significantly enhance their chances of success in the competitive real estate industry.
Realtors should exercise caution and avoid excessive time investment in unproductive activities such as excessive social media use, constant email checking, or spending undue time on administrative tasks like preparing postcards. While these tasks may be necessary to some extent, they often fall into the 80% of activities that contribute only 20% to overall income.
Effective time management is pivotal for success in real estate, and focusing on the 20% of activities that generate 80% of the income is a key differentiator between top-performing realtors and others. The best in the industry understand the importance of delegating routine administrative tasks to free up time for revenue-generating activities like prospecting, client meetings, and negotiations.
By streamlining their focus and delegating tasks that don't directly contribute to income generation, realtors can significantly enhance their productivity and overall success in the competitive real estate market. This strategic approach allows them to channel their efforts into the high-impact activities that truly drive results and separate them from the rest of the field.
In essence, the key to success is understanding the pivotal tasks that drive lead generation and conversion. Delegating other aspects of your business is crucial. Organize your day into A activities, which should take priority, and B, C, or D activities to be tackled later. A Activities, such as prospecting, calling past clients, door knocking, and active lead follow-ups, are best accomplished in the morning. Reserve the remainder of the day for B, C, or D activities to optimize your productivity and focus on high-impact tasks and learn how to delegate to others (like a personal assistant, a transaction coordinator and work with tools to automate some of the work).