The average realtor makes less money than if he/she were working full time at McDonalds.
This fact is largely due to the fact that the average realtor also makes a TON of mistakes. We could spend days talking about all the mistakes, so I figured I would break it down to the top three.
Top 3 Mistakes Realtors Make That Hinder Their Success
1: They do not run their business as a business.
2: They do not take enough intentional planned action.
3: They do not constantly work on mastering new skills.
Let’s break them down:
1: They do not run their business as a business. Most realtors see themselves only as a realtor. Now, take real estate out of the equation. 80% of all businesses fail between 1-5 years of being in business, and then, 80% of those which made it through the first 5 years end up failing and closing their business in years 6-10. So, when I talk about the failure rate of realtors, that holds true for all entrepreneurs not just realtors.
As stated in the amazing business book by Michael E. Gerber “The E-Myth Revisited,” which I highly recommend, most businesses owners fail because they never operate from a space of being an entrepreneur. For example, the baker who bakes world class muffins but does not know how to run a business. Or the personal trainer who knows the human body and everything about nutrition, but, again, does not know how to run a business, And the realtor who knows the real estate contract inside and out, knows how to negotiate contracts, always looks out for his/her clients’ best needs, but does not, and is not, running his/her business as a business.
As a realtor, you must know how to be a great realtor! You should know the contracts, how to negotiate for your clients, put client needs before your commission check, and deliver world class services to your clients, etc. All those things are essential, and by no means do I want to downplay the importance of those essential key roles. HOWEVER, those alone are not enough! A lot of amazing realtors are broke. Just as there are a lot of world class bakers, and world class personal trainers who struggle, and eventually go out of business.
My personal opinion is that being a great realtor is the “anti” to being in the industry. That is to say it’s the given, the minimum requirement to succeed. If a realtor is not committed to being a great realtor, then he/she should not get into the industry. BUT, again, that is not enough to succeed, only one part of it.
To succeed, you MUST also become a great entrepreneur, aka business owner. You MUST treat your business as a business and run it as a business!
So, what is the difference? Think of each role as a hat you are going to wear and at different times you are wearing different hats. You wear your “realtor hat” when you are on a listing or buyer presentation, when you are writing up a purchase contract, when negotiating terms, when doing a final walk through, when prospecting, and when following up with your leads. Think of this as the hat for anything that you are doing “in your business.”
When you put on your “entrepreneur hat,” you’re working “on your business.” When wearing this hat, you are working on activities like: goal setting/business planning, tracking and breaking down your numbers, creating systems which allow you to work “in your business” more effectively and efficiently, planning, reflecting, etc. Put it on when you are taking a view from the 30,000 ft. level on your overall business.
Most get so busy working “in the business” that they never take the time to work “on the business” to build a systematic, predictable, duplicatable and eventually scaleable business. Don’t be most people. Working “in your business” is every bit, if not more important, than working “on your business.”
2: They do not take enough intentional planned action. Now that you are working “on your business” as well as working “in your business,” you are able to take the correct action on the correct items. You will be tracking all of your numbers and will know the exact amount of leads, action, monetary investment, etc. which you MUST take yearly, monthly, weekly and daily to ensure your goals become a reality. You are taking the time daily to reflect and plan, as well as constantly working on new systems to operate more effectively and efficiently inside your business.
Here’s a common conversation I have with many realtors: “My goal is to make $300,000 in gross commissions this year.” I reply with, “Great, I love big goals! What is your exact game plan to make that happen? What must you be doing daily to make that a reality?” The typical response is, “I am not sure. All I know is I am going to be more focused and work much harder.”
I am all about being more focused and working harder, but the reality is that hard work alone is a plan for failure. Even if a realtor should succeed with just hard work, if he/she is not tracking and working “on the business” as discussed above, then the success will be very difficult to duplicate.
You MUST take intentional planned action to create true and sustainable success. Have a specific plan in place, and then take massive action executing the plan.
3: They do not constantly work on mastering new skills. In life we are either growing or we are decaying. The average high school and college graduate only reads one book after graduation. On the other hand, the average Fortune 500 CEO reads sixty books per year. Successful people are lifelong students and put their self-development as a top priority. You must always be improving your skills to succeed.
If a realtor is currently making $50,000 per year and has an eventual goal of making $500,000 per year, well, he/she won’t get there by doing the same things which made $50,000. If you want more, you MUST become more.
The world we live in today makes growing and changing easier than ever. With all the great podcasts that exist, all the great books, audio books, YouTube videos, inexpensive online training sites like Udemy, where you can learn how to “Code Write Your Own Apps” for $38, you have no excuse to not improve. Only 5% of realtors ever invest in a coach or any type of coaching program. There is a reason every top realtor has a coach and takes his/her self-development very seriously.
If you start working hard, right now, on making sure you never make these “Top 3 Mistakes,” you will absolutely succeed. I am not saying it will be easy; you will still have to put in a lot of hours and a ton of action. But, eventually, it will all pay off and you will create the life you know you want and deserve!
Thanks for reading!
Joshua Smith, Realtor/Mentor/Entrepreneur
-Voted 30th Top Realtor in America by The Wall Street Journal
-Over 5,000 Homes Sold & Currently Selling More Than 1 Home Daily