Realtor friends, you may have heard this startling statistic before, but in case you haven’t: 87% of agents don’t make it more than five years in the real estate business. The five-year mark is important as that’s generally considered the year that you don’t have to work as hard for your next sale: repeat business starts and referral business grows. 

Why do 87% of Realtors fail to hit the 5-year mark? 

Many enter the real estate world with enthusiasm, driven by a passion for houses and people. While these are commendable traits, it’s crucial to understand that at its core, residential real estate sales is a *sales* business. Showing homes, consulting, negotiating, advocating – the parts of the business that are most enjoyable and most rewarding – those are service activities. But before we can offer services, we must first sell our expertise and capabilities to prospects and convert them into clients to serve.

Therefore, the foundational element of real estate, which many overlook, is generating leads. Without leads to convert into clients, there’s nobody to serve and no business to be had. A common pitfall for new agents is the assumption that a love for the job will naturally translate to leads. But in reality, proactive strategies to generate leads are what set successful agents apart.

When starting, it’s vital to have a clear lead generation plan. This should address two primary lead sources:

1. Sphere of Influence Leads: How will you leverage your existing relationships and people who already know you, like you, and trust you?

2. New People: How will you reach out and make connections with potential clients you haven’t met yet?

How can you increase your chances of success?  

New agents face a double challenge when they start in the business: 1) generating enough leads; and 2) not having great skills to convert those leads into clients to serve. Fortunately, there is one strategy that consistently helps new and newer agents gain traction: joining a real estate sales team. Being a part of a team can offer newer agents access to the team’s leads. Moreover, teams generally train agents on how to convert those leads into clients. This can provide immediate lead generation and skill-building opportunities. Those leads and skills will empower newer agents to gain experience, close deals, and kickstart their cash flow. Greater cash flow significantly increases an agent’s ability to survive and thrive in the first five years of licensure. 

As you embark on or continue your real estate sales journey, always circle back to the question: “How am I generating leads?”; and “Do I have enough leads?” If you find the answer lacking, it might be time to reevaluate your approach or consider team-based opportunities.