The Top Ten Reasons Real Estate Agents Fail

A couple of weeks ago I discussed why most aspiring real estate investors fail to buy a house or lose money when they invest. Many real estate agents also have a very hard time getting started in the business. The average income of real estate agents is less than $40,000, because so many agents fail to make much money in the business. There are a number of reasons why real estate agents don’t make much money, but there are also a lot of agents who make a lot of money in the business.

If you want to become a real estate agent or already are in the business, you need to avoid these mistakes to make sure you are successful. It is easy for real estate agents to get distracted, to get frustrated and to lose focus. It is not easy to be successful in any business, but real estate is a business with unlimited potential if you are willing to work at it.

Why do real estate agents make less than $40,000 a year?

The average incomes for real estate agents can be very deceiving. If you simply look at the averages, being a real estate agent looks like a horrible business to be in. They don’t make much money, they have no benefits and they have no retirement plan. However, I am a real estate agent who makes a lot of money and I think I have a much better retirement plan than most people; rental properties. The reason the average numbers are so low is many agents are part-time and many other agents don’t have any training or do the things agents have to do to sell houses.

Here is a great article on why part-time agents have a hard time succeeding in real estate.

What are the top ten mistakes real estate agents make?

1. Not saving enough money to live on before they become a real estate agent. When you become a real estate agent you are basically starting a business. It takes time to build a business and start selling houses. You can’t expect to quit your job and start selling houses your first month. You have to build up savings to live on when you first become a real estate agent. It can be months before you make your first sale. We had an agent join our team who ran out of money before he sold his first house. He ended up quitting and getting another job because he had a family to support and ran out of money.

2. Trying to become a successful agent while working a full-time job. One of the hardest things to do is begin a real estate career part-time. The problem is people want to see houses, they want to talk to their agent and they need information quickly. If the only time a buyer can get a hold of you is after 5 and on the weekends, they will become very frustrated and have a hard time finding a house in a seller’s market. As a part-time agent it will be tough to find time to market yourself, hold open houses, make calls and do the other activities that bring you business.

3. Chase shiny objects. When you become a real estate agent you will have many companies trying to sell you leads or the front page of Google ad space. The salesman is very convincing and they will probably convince you it is a good business decision to pay them money, because “just one commission will pay for their service”. While some companies do provide leads that are worthwhile, most are not. The quality of leads from the internet is not very high and you are much better prospecting in person by making calls or in person visits. Many agents blow through their marketing budget signing up for every online lead service they can.

4. Do not answer their phone or call back. A real estate agent’s business is based on relationships. It is based on talking to people, building trust and selling houses. If you do a good job, the people you sell houses to or for will recommend you to their friends and family. Many agents spend a lot of money trying to get people to call or email them. It is amazing how many agents do not answer their phone or even call back the people who call wanting to buy or sell a house! I have personally left messages and sent emails to many agents looking to refer business or even buy houses myself in other states and most agents never call back. I don’t care how bad a lead sounds when they leave a message you call them back. You never know who their friends are or how able they are to buy or sell a house until you talk to them.

5. Do not market to their database. A real estate agents database may be the most valuable thing they have. All real estate agents should keep a database of past clients, potential clients, business contacts and anyone they know. You can use this database to send letters to, emails to or invite to fun events. The database is what will make the top agents the most money and many agents are too lazy to create one. Most of the agents who have a database are then too lazy to actually use it and market to their database. (When I first started and struggled I was one of those agents who did not keep a good database).

6. Choose the wrong broker. When you first become a real estate agent you need training. The more training you get the more successful you will be. However many new agents choose the broker who has the lowest fees and highest commission split to the agent. If you are a new agent and do not know how to sell houses, pick the broker with the best training program. Is it better to sell 20 houses your first year and keep 50 percent of the commissions or sell one houses your first year and keep 100 percent of the commission?

If you are looking to get a real estate license, Real Estate Express is the best online school I have found.

7. Start working for a property management company. I think it is great if a new real estate agent can find a team to work with in the beginning of their career. They may even get paid hourly to work as an assistant. However, many agents ask me if it is smart to work with a property management company to start out with. I wrote an entire article about it here, but to sum it up; No. Property managers manage rentals, they so not sell houses for the most part. If you want to learn how to sell houses do not work for a property manager.

8. Do not set goals or make a plan. I did not set goals when I first started in the business and I struggled for a long time. I also did not make a business plan or any real plan for how I would sell houses. Then I started setting goals, making plans and my business boomed. I went from selling 15 houses a year to over 100 homes in a couple of years. REO was a large part of that, but I would have never found REO, if I had not made goals and planned my business. When you work as an agent you don’t have a boss to tell you what to do. You have to make your own plan and motivate yourself.

9. Sacrifice their client’s needs for a commission check. Many real estate agents find themselves in a position where a deal is falling apart. Maybe the buyers inspection found a major issue, the appraisal came in low or the buyers loan was more expensive than they thought. Will you be the real estate agent that does what is best for their client or the agent that does whatever it takes to get a commissions check? Real estate is about relationships and referrals. If you do what is best for yourself, word gets around and less people will use you as an agent. If you do what is best for your clients, word gets around and more clients will come your way.

10. Do not plan for the expenses that come with being an agent. Real estate agents are self-employed for the most part. They have no real boss and no employer who take taxes out of your paycheck. You have to plan for taxes, for health insurance, for retirement, because none of that is taken care of for you. If you want a corporate job with benefits and a set salary being a real estate agent is not for you. You also must plan for retirement, but I think being an agent has advantages for retirement planning.


Being a real estate is not a walk in the park and it is not easy money. If you treat being an agent as a business and plan accordingly you can be very successful, have no boss, plan your own schedule and gain a huge advantage when investing in real estate. if you take short cuts, go for the easy money and don’t work hard you will struggle. If you want help with any aspect of real estate check this out.


  1. Wren jose August 11, 2015
    • Mark Ferguson August 11, 2015
  2. Chris May 21, 2015
    • Mark Ferguson May 21, 2015

Add Comment