A record number of Americans have become real estate agents in recent years, and while it can be a challenging career for newcomers, only 4 in 10 new real estate professionals are confident of having a long-term career in real estate, according to Realtor. com is new #ThrivePastFive study.
Realtor.com recently surveyed more than 2,000 agents to gain insights into their top challenges, what separates new and experienced agents, and what it takes to find success in those critical early years, translating that into insights specific to new agents. help to achieve success. Having a good mentor and cash reserves, as well as spending money on marketing, and a full-time commitment during those first few years in real estate are essential to an agent’s long-term success, according to the study results.
There are many different reasons why so many have decided on a real estate career, from it being a flexible career option for those looking for balance and autonomy, to the clients, the lifestyle it offers, and the income potential. Despite being a hot career choice for many, real estate is not easy, and every agent faces different challenges, from a lack of knowledge and training at the start of a career to growing a customer base and understanding how to effectively convert leads, and too many agents don’t make it past year five.
“In a shifting and ultra-competitive market, with twice as many estate agents as listings, with insights from experienced agents – 80% of whom are confident of making it long-term as an agent – on what works best to drive business growth to float. has never been more valuable,” said Donna August, vice president of B2B marketing at Realtor.com. “With 25 years of experience helping agents succeed, Realtor.com is committed to developing tools and insights to help agents just starting out so they can thrive and find success in their early years.”
Lead generation a top pain point
With home inventory rising but still near four-decade lows, it’s no surprise that generating new customer leads is the biggest challenge for agents of all experience levels today. In fact, 60% of all agents cited finding new leads as a challenge, and the figure rose to 70% among new agents, those with less than two years of experience.
One of the most effective strategies for generating real estate leads is to build a strong client network, which can take years for a new agent to grow. Only a quarter of new agents reported having a network of buyers and sellers they felt confident about, and nearly half (45%) said they struggled to develop a new client each week; 70% of the most experienced agents surveyed – or those with 11+ years in real estate – create between one and four new client relationships each week.
Other top lead generation challenges for agents of all experience levels are converting leads to customers, poor lead quality, competition from other local agents, high cost per lead, getting a lead late, low connection rates and the time/effort to customers to manage is too high. In addition to lead generation, new agents also struggle with non-serious buyers, while experienced agents struggle with large listing sites competing with them as brokers.
Knowledge gaps that threaten success
Newer agents wish they had more knowledge of lead generation, deal processes and marketing, while experienced agents wish they knew more about social media marketing, online advertising campaigns that convert and search engine optimization. When it comes to why many agents are unlikely to succeed, new agents attribute their struggles to a lack of training and startup cash, while the most experienced agents responded that it was likely because new agents lack the time commitment and the learning curve underestimated.
Contributing factors to a new agent’s success
With so many challenges new agents face, finding success can seem daunting, but some respondents find it absolutely possible. Looking at the characteristics of successful new agents – those who average more than 7 transactions per year – the majority, 9 out of 10, work full time. While most agents surveyed work full-time (83%), while new agents are working to establish themselves, they are three times more likely to work part-time compared to their more experienced peers, 24% versus 8% for the most experienced agents. Almost half (47%) spend more than $3,000 a year of marketing, and nearly 7 out of 10 spend money every month on online leads. Two-thirds of successful new agents also had someone to mentor them as well as backup funds when they first started in real estate.
How much to spend on marketing
The old saying “you have to spend money to make money” is true for agent success; 64% of experienced agents spend $3,000 or more annually, while 70% of new agents less than $3,000 annual. Almost 9 out of 10 agents pay for marketing costs themselves. New agents are most likely to receive marketing support from their brokers, 15% versus 9% for experienced agents. Only about one third of new agents spend $50 or more per month on internet leads, while experienced agents will most likely spend in between $50-499 per month on internet leads.
Top channels to find the most success
With a larger network of past clients, more experienced agents are finding online marketing success by appealing to past clients via email marketing. Newer agents tend to have more social media experience, which is probably why 82% of new agents rely on social media and want to create their own content. Among the various social platforms, Facebook is the platform of choice among survey participants, with 63% of all agents using it to generate leads, and Instagram comes in a distant second at 28%.
Despite the popularity of social media, new agents struggle to convert it into leads, and social media is number 5 for lead generation after networking/referrals, email marketing, digital advertising and internet leads. Among all agents, Twitter, YouTube, TikTok and Snapchat are among the social media sites for the lowest generation (with less than 5% getting any leads from these sources).
While 6 in 10 agents of all experience levels ranked the tried and true method of networking and word of mouth the highest for offline marketing channels, newer agents also ranked open houses (44%) as a top channel. For the most experienced agents, more than half (55%) call on past contacts/leads as a secondary offline marketing tactic, followed by direct mail and open houses.
To read the full report, including more data and methodology, click here.