Why Do Most Real Estate Agents Fail in Their First 2 Years? (And How To Avoid This)

Every time someone buys or sells a home, they hire a real estate agent. With so many opportunities and properties on the market, why do most real estate agents fail within their first two years?

There are several reasons: some agents don’t know what they’re doing, others don’t understand the rules of the game, and others don’t have the skills necessary to succeed.

This article will outline why most real estate agents fail in the first two years. Then I’ll teach you exactly what you need to do to avoid those pitfalls and become a success instead.

Is Real Estate Difficult?

Yes and no. Real estate is difficult because it’s a commission-based job, which means income flows in differently; you only get paid when you sell a home. The commission structure means you must constantly generate leads, work your sphere of influence, stay in touch with past clients, and sell homes to make money.

It’s also difficult because a lot of paperwork is involved in each transaction. Even though the paperwork is often electronic, the details are the same. From the offer to the loan documents to the inspections, every step of the sale has its own set of forms.

As a real estate agent, you must also become familiar with the laws and regulations in your state. Each state has different rules regarding real estate transactions. For example, some states require that agents disclose certain information to buyers, while other states do not have this requirement.

While real estate can be difficult, it’s also a highly rewarding career. When you help a family buy or sell their home, you make a difference in their lives. You help to grow the economy. You can also build any income you want to achieve with your real estate business by improving your skills. I’ve worked with many agents that have created life-changing and even potentially generational-changing wealth.

The job is rewarding, and once you know all you need to and are familiar with the processes involved, it gets easier with time; however, it is still a job and requires consistent work and considerable time and effort to do it right.

Why Do Realtors Fail?

The National Association of Realtors reports five years as the average Realtor failure rate. However, many of these Realtors get started and then call it quits within only two years.

Why do Realtors quit? They quit for the same reason people quit at any endeavor in life: lack of results and alternative opportunities. What percentage of Realtors fail? While placing an exact percentage number on failing Realtors is difficult, it’s a high number. I’ve consistently heard that 85% of new agents will not be active in just two years. Some may keep their license, but they will not sell a single home in the next five years.

If you’re a new Realtor or have struggled for several years, know that you can beat the odds. Why do Realtors fail? Typically, the average agent fails to set realistic expectations, remain patient, perform the correct activities, or improve their skills. With the right approach, you can overcome the obstacles you’ll face on your way to building a successful business.

9 Reasons Why Most Real Estate Agents Fail in Their First 2 Years

Let’s look at common reasons for failure in real estate and what to do about it.

Lack of a Plan or Vision

Many real estate agents start their careers without a business plan. They join the industry for the wrong reasons. They’re attracted to the idea of a flexible lifestyle and the potential to make a lot of money.

If you want to become successful in real estate, you need to develop clear action plans. Your plan should include achievable goals, your strategy for reaching those goals, and your estimated timeline.

Your vision should describe what success looks like for you.

  • What does a typical day look like?
  • What are your income goals?
  • What are your long-term plans for your business?

A plan and vision keep you from becoming side-tracked when you hit roadblocks or when your to-do list expands beyond what can actually be accomplished in a given day/week.

They Don’t Understand What It Takes To Be a Successful Real Estate Agent

Many people enter the real estate industry with a false sense of what it takes to be successful. They think they can put up a few listings, show some properties, and wait for the phone to ring while putting in banker hours. Or they think they can make a few thousand dollars here and there helping their family with their home purchases/sales, not understanding the reality.

The reality is that being a successful real estate agent requires hard work, dedication, and persistence. You need to be a people person and develop excellent communication skills. You must also negotiate well and bring a strong understanding of the real estate market to the table.

To fix this issue, commit to learning new skills. Doing so helps with overcoming difficult situations you might face. Take a negotiation or sales skills course, learn how to improve the way you communicate, or get better at marketing within the real estate industry.

Poor Budgeting

Like any small business owner, you need to become good at budgeting and managing your cash flow as a real estate agent. If you’re like most agents, you’re paid through a 1099 Form. While your choice of brokerage is an important decision, the business is yours, not theirs.

You need to have a plan for the slow months and save money when you have a good month. Many new agents make the mistake of spending everything they make or planning for the needed investment to grow their business. They also fail to set aside money for taxes or pay the IRS via its quarterly tax payment system.

Budgeting also extends to your business expenses. Remain mindful of how much money you’re spending on things like marketing, gas, and office supplies. A good rule of thumb is to save 20% of your income. Use it to pay yourself first, invest in your business, and pay your taxes.

Neglecting the Basics

If you want to be successful in this business, you need to do the basics well. That means keeping your listings accurate and up-to-date. It also means staying in touch with past clients through regular email campaigns or physical mailers. You should also keep your real estate website fresh with new content and new community pages. Optimize it for SEO so that potential clients can find you online.

The basics also apply to your personal life. You need to take care of yourself to perform at a high level. Get enough sleep, exercise regularly, and eat healthy foods.

Inadequate Marketing Efforts and Lack of an Effective Personal Brand

Marketing is a key element of real estate agent success. Marketing helps you attract potential buyers to your listings.

An effective marketing campaign should include a mix of online and offline efforts. Online methods should use targeted keywords to reach potential buyers searching for your properties. Your marketing campaigns should feature a strong personal brand that sets you apart from other agents in your area.

The average real estate agent doesn’t understand how to market themselves well. You can fix this problem by studying marketing and taking the time to develop an effective personal brand. Another way to get help is by hiring a qualified real estate marketing agency.

Not Having a Strong Lead Follow-up System

You can have the best marketing campaigns in the world. However, they mean nothing if you don’t have a strong lead follow-up system.

Your job isn’t done once you’ve generated a lead; generating a lead is part one of a multi-step process. You need to install a system to follow up with your leads regularly.

Your follow-up system should include an automated email drip campaign as well as personal phone calls and text messages. You should also consider sending snail mail postcards to your prospects.

Seek out a quality customer relationship management (CRM) system to keep track of prospects. The best CRMs will have features like lead capture forms, automatic property updates, and transaction management tools.

Setting up and managing the technology stack your business needs can be as difficult as knowing where best to invest your time. If you’re willing to invest in a partner and system that will handle all of that and increase your chance of creating a solid six-figure income, talk to someone like the team at AgentHub 360.

Never Stop Networking

Consider your network as you work to generate leads and a higher commission check. Your future net worth is directly tied to the quality of the network you build today.

The goal is to keep your name in front of your leads until they’re ready to buy or sell a property, whether that be through direct mail, social media, or another avenue. By staying top-of-mind, you increase the likelihood that they’ll choose to work with you when they’re ready to make a move.

Keeping It as a Side Hustle or Part-time Job and Letting Distractions Get in the Way

For some part-time real estate agents, it’s the side hustle element that attracts them. Unfortunately, they may not commit to building the business correctly.

Treat this business as a full-time job, even if it is a side hustle at first. Although a real estate business provides a flexible gig, it doesn’t mean you can mentally treat it like you’re a part-time agent. A flexible schedule doesn’t equate to haphazardly working the business. It’s rare for anyone to make it big in real estate on a part-time schedule. If you let yourself be distracted, you’ll continue to struggle.

If you’re currently operating as a part-time real estate agent or Realtor, only you can make the mental commitment to discipline. Decide today that you’ll no longer allow distractions to get in your way.

The solution to moving from a struggling part-time real estate gig to a thriving full-time real estate career is dedication. Set aside dedicated time each week to work on your business. Turn off your phone, close social media tabs, and eliminate any other distractions during this set time.

Treat your real estate business as a job and give it the time it deserves. It’s amazing how quickly you’ll start to see results when going after it in this manner.

Not Changing with the Changing Real Estate Market

As third-party marketplaces continue to pop up and buyers and sellers use a self-service approach, you must change your tactics to succeed.

For example, a recent report by the National Association of Realtors found that 97% of buyers use the Internet to find their homes. You won’t see this number going down in the future. As technology advances, more people will feel comfortable using it.

As a real estate agent, you must be where your customers are. If they’re on the internet, you need to have an online presence.

An online presence starts with a website. You should consider your website as your digital business card. It’s one of the first places prospects will go to learn more about you and decide whether or not they want to work with you.

Your website should be mobile-friendly and easy to navigate. It should include your contact information, lead capture forms, and an IDX-enabled property search tool.

Remain active on social media platforms like Facebook, Instagram, LinkedIn, TikTok, and Twitter. These platforms provide an opportunity to share your listings, blog articles, and other real estate-related content.

Listening to the “Gurus” and “Experts”

The problem with following the so-called gurus and experts is that they’re often trying to sell you something.

Remain discerning when taking advice from someone in the real estate industry. Just because someone has a big social media following doesn’t mean they have your best interests at heart.

Additionally, many people calling themselves “experts” haven’t proven themselves as successful in the real estate industry. You need to ask yourself if you’re taking advice from someone with domain knowledge or not.

For example, why do Realtors hate Zillow? Many real estate agents become frustrated with the inaccurate information on the Zillow platform. Yet, you’ll still find “experts” teaching about Zillow as a path to long-term individual success. You can’t expect to find the success you desire when using tactics that haven’t proved to work in today’s market or that stop when you stop writing a multi-thousand dollar per month check.

The solution to this challenge is finding experts and coaches with proven real estate track records. You already know most of what you need to know about property financing and real estate transactions.

If you’re struggling, it’s more likely due to a lack of experience using effective business operations, website design, real estate marketing, and search engine optimization (SEO). Take the time to vet coaches who will expertly advise you in these critical areas. These subjects will help you compete against competitors.

How Can You Be Successful in Real Estate?

Why do Realtors fail? Before you can change things for the better, you must understand why you are struggling.

Be honest with yourself. Figure out why success eludes you. Without this key step, you will likely repeat the same mistakes. Once you know why you’re struggling, it’s time to take action and turn things around.

Here are five tactics that will help you succeed in the current market.

Know why you’re working in real estate: Become clear about why you’re in this business.

  • What motivates you?
  • What gets you excited about selling homes?

If you’re in the business only for the glitz and glamor of the lifestyle, you need to re-prioritize your values about the business. A flexible lifestyle or the opportunity to earn more money isn’t enough to keep you focused and motivated when things get tough or take longer than you planned. Only deep internal values about helping others and creating value in the marketplace can do that for you.

You will face rejection, disappointment, and setbacks. Expect these issues to happen. Know why you’re in real estate, stay positive, and keep your eye on the prize.

Be persistent: Real estate is a tough business. The most successful agents are willing to work the hardest. If you’re not getting the results you want, don’t give up. Keep trying new things and eventually, you will find what works for you.

Becoming more knowledgeable will help your persistence goals. You need to know the ins and outs of the business, the market, and the area you’re selling in. You’ll become better equipped to handle all challenges as you gain more knowledge.

Knowledge breeds confidence. Confidence makes it easier to remain persistent in fighting through obstacles.

Build a good reputation: You want your prospects to see you as an honest, reliable, and trustworthy individual. Responsiveness can help in this area. Clients want to work with an available agent who stays responsive to their needs. They’ll take their business elsewhere if you can fulfill in this area.

Do what you say you will at all times to build a great reputation. Developing organizational skills helps with this. You will deal with constant needs regarding paperwork, deadlines, and appointments. If you’re not organized, things will fall through the cracks. Your reputation will suffer as a result.

Build a great team: In real estate, you are only as good as the people you work with. If you’re working with a great team of people, they help you succeed. Find a good loan officer, title company, and other professionals that you can trust and rely on.

Learn modern marketing methods: The real estate industry is constantly evolving. You need to stay up-to-date on the latest marketing methods to find true success. Take time to learn about social media, internet marketing, and other modern techniques.


Here are a few resources you can use to develop your real estate skills in your pursuit to succeed long term.

Facebook groups:

LinkedIn groups:

Marketing resources:


Before you jump into the world of real estate, you should first consider the pros and cons of being a real estate agent. In addition, be aware of why real estate agents fail and how to avoid making those mistakes.

Are you willing to put in the hard work needed to succeed? Can you handle rejection? How much money do you want to make? What kind of lifestyle will you lead?

These are all questions you need to answer.

Remember, you will never become a successful real estate agent overnight. If real estate is the right fit for you, develop a long-term plan and stick to it. You’ll only grow as you go.

Need to Find your Cadence to Thrive in Real Estate? Here’s a free 45-minute course for you to take next.

Author Details
Entrepreneurial marketing leader that’s built and run organizations from start-up to over $500M annual revenue. He brings a unique combination of storytelling and innovation to the team, having led marketing for many brands. Kurt’s a regular conference speaker and workshop leader around modern marketing tactics that actually drive sales. In addition, he has been asked to coach and advise thousands of leaders, from startup founders to the President of the United States.

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