Record numbers of Americans have become real estate agents in recent years, and while it can be a tough career for newcomers, According to Realtor.com, only 4 in 10 new real estate professionals believe they have a long-term career in real estate.it’s new #ThrivePastFive Study.
Realtor.com recently surveyed over 2,000 agents to better understand their top challenges, what separates new agents from experienced agents and what it takes to succeed in those critical early years, and translated it into insights specifically for help new agents succeed. According to the study’s findings, having a great mentor and cash reserves, spending money on marketing, and committing full-time during those early years to real estate are critical to long-term business success. ‘an agent.
There are many different reasons why so many people have chosen a career in real estate, from a flexible career option for those seeking balance and autonomy, to clients, to style of life it offers and the income potential. Although a hot career choice for many, real estate is not easy and every agent faces different challenges, from the lack of knowledge and training at the start of a career to the growing a customer base and understanding how to effectively convert leads, and too many agents don’t make it past the fifth year.
“In a changing and ultra-competitive market, with twice as many real estate agents as adverts, getting insights from experienced agents – 80% of whom are confident of long-term success as an agent – on what works best to drive business growth has never been more valuable,” said Donna august, Vice President of B2B Marketing at Realtor.com. “With 25 years of experience in agent success, Realtor.com is committed to developing tools and insights to help agents just starting out, so they can thrive and succeed in their early years.”
Lead generation, one of the main problems
With home inventories rising but still near four-decade lows, it’s no surprise that generating new leads is by far the biggest challenge today for agents of all experience levels. In fact, 60% of all agents cited finding new leads as a challenge, and that figure rose to 70% among new agents, those with less than two years of experience.
One of the most effective real estate lead generation strategies is building a solid network of clients, which can take years for a new agent to develop. Only a quarter of new agents said they have a network of buyers and sellers they trust, and nearly half (45%) said they struggle to develop a new customer each week; By comparison, 70% of the most experienced agents surveyed — or those with more than 11 years of real estate experience — create between one and four new client relationships each week.
Other top lead generation challenges for agents of all experience levels include converting leads to customers, poor lead quality, competition from other local agents, high costs per lead, obtaining a lead too late, low connection rates and time/effort spent on customer management. too high. Beyond lead generation, new agents also struggle with non-serious buyers, while experienced agents struggle with large listing sites that compete with them as brokers.
Knowledge gaps that threaten success
New agents want to know more about lead generation, transaction processes and marketing, while experienced agents want to know more about social media marketing, online advertising campaigns that convert and optimizing search engine. As for why many agents are unlikely to be successful, new agents perceive their struggles to be due to a lack of training and start-up money, while more experienced agents responded that it was probably because new agents underestimate the time involved and the learning curve.
Factors contributing to the success of a new agent
With so many challenges new agents face, succeeding can seem daunting, but a portion of survey respondents find it entirely possible. When 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%), new agents working to establish themselves are three times more likely to work part-time compared to their more experienced counterparts, 24% versus 8% for the most experienced agents. Almost half (47%) spend more than $3,000 a year in marketing, and nearly 7 in 10 spend money on online leads every month. Two-thirds of successful new agents also had someone to mentor them, as well as emergency funds when they started in real estate.
How much to spend on marketing
The old adage “you have to spend money to make money” rings true for agent success; 64% of experienced agents spent $3,000 or more per year, while 70% of new agents spend less than $3,000 annually. Nearly 9 out of 10 agents pay the marketing costs themselves. New agents are the most likely to receive marketing support from their brokerage, 15% versus 9% for experienced agents. Only about a third of new agents spend $50 or more per month on internet leads, while experienced agents are more likely to switch between $50-499 per month on internet leads.
The best channels to find the most success
With a larger network of past clients, more experienced agents are finding online marketing success by reaching out to past clients through email marketing. New agents tend to have more experience with social media, which is likely why 82% of new agents rely on social media and lean into creating 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 is a distant second at 28%.
Despite the popularity of social media, new agents struggle to convert them into leads, and social media ranks fifth in lead generation after networking/referrals, email marketing, digital advertising and Internet leads. Of all the agents, Twitter, YouTube, TikTok, and Snapchat ranked among the social media sites for the lowest lead generation (with less than 5% getting leads from these sources).
While 6 in 10 agents of all experience levels ranked the proven method of networking and word of mouth as the top offline marketing channels, new agents also ranked open houses (44%) as a leading channel. For the most experienced agents, more than half (55%) use former contacts/prospects 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.