Why is the failure rate so high among real estate agents? Is it because a lack of capital, poor sale skills, or maybe a dying interest working in real estate?

Many have no idea how to actually work their business and they also do not have the necessary reserves to survive long term before the first few commissions come in.

Some get into it thinking it'll be easy money and they'll be rolling in the dough in no time. Bzzzzt.

1.Under capitalized and never ran a business just collected a paycheck doing minimal work to get by.

2.Mis-perception of the hours needed and the work involved.

Lack of talent and lack of creativity. Fear of competition. Simply thinking that being a "people person" and being "nice" have anything at all to do with success. Lack of entrepreneurship. Fear of being honest: i.e. telling people what they want to hear instead of what they need to know. Failure to understand and internalize the concept that pursuing a career in real estate is the equivalent of starting a company. Accordingly, not having the required capital and skill set to basically start a company. Failure to deal with the fact that not making any real money for years is NORMAL for a rookie real estate agent. Inability to solve hundreds of problems a month and many problems at the same time. Not having any true knowledge about all the aspects of a real estate transaction and how they interrelate. Inability to accurately perceive someone's true motivation and psychology, which then leaves you wasting time working with clients who are really not ready to buy or to sell. Inability to come up with and implement new and innovative techniques BEFORE the masses of bad agents spend $595 to learn them from dopey seminars.

God, the list of what makes a failing agent just goes on and on.

My opinion on why over 80% of agents leave the business within two years is because they don't treat real estate as a business. You can wing it for a while, but eventually, it will catch up with you.

Following a proven business model that guarantees you success if you just follow it is the way to go. Don't try to reinvent the wheel; get with a company that shows you what to do and how to do it in ANY market!

I definitely agree with Brent. Most people just think of it as a part time job or something to do while they wait for their real career to come along. The issue is that since barriers to entry are relatively low, there is tremendous competition which they don't factor in. Then when they don't get instant results, they pack it up and call it quits.

Kristi's on the right track, I think. In most states, getting your salesperson's license is easy; all you need is a few hundred extra bucks, the ability to pass a multiple-guess test, and a broker willing to sign that he or she is your "sponsor" (so to speak). In my state, it means that any idiot of legal age who has never been convicted of felony fraud can become a real estate agent. Compare that to the standards required for our accountants, lawyers, physicians, or even appraisers.

Most folks who go into real estate have no sales background. They don't know how to foster or maintain the sorts of professional relationships that lead to sales.

It's surprising, actually, that the failure rate isn't even higher.