Why real estate agents fail


  • Most agents do not earn enough to support themselves by selling real estate alone.
  • High startup costs, lack of business operational expertise, bad selling practices, and picking the wrong brokerage/market contribute to an agent failing early in their career.
  • The average agent earns under $10,000 annually in their first two years.
  • Under 20% of agents stay in the industry for longer than five years
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What are the main reasons agents fail?

Many agents do not make enough money to support themselves. Being a real estate agent is not like many traditional jobs. It does not come with guaranteed pay. And there is no starting guide on how to succeed in real estate. There are five reasons that agents fail:

  • Do not generate enough revenue to support themselves: the average agent earns under $10,000 in their first two years. Low earnings often encourages agents to pursue a different job.
  • Not enough startup capital: even the most successful agents do not earn much in the first 3-6 months of their career. Working with initial clients and waiting for commission checks takes time. But many expenses begin immediately, ranging from licensing costs to brokerage fees. If an agent has not prepared for this, it can eat through their savings.
  • Not good at operating a business: agents work as independent contractors. While they are employed by a brokerage, they must manage their finances, decide what tools to use, and pay for essential services. While an agent may be great at sales, they may mismanage their business, which can lead to failure.
  • Not good at sales and marketing: selling and building a referral network is essential in real estate. Many successful agents come into the industry with existing contacts from another industry. This can jump start their career. Without a desire to sell and market, many agents never pick up their first few clients.
  • Pick the wrong brokerage or market: sometimes having the right mentorship or being in the right location can be the difference between success and failure. An agent who starts working in an unpopular neighborhood may struggle to get their first clients.  Similarly, an agent who is new to real estate may not thrive at a brokerage that lacks strong training systems.

How does the average agent earn in their first few years?

The average agent with under two years of experience has a median gross income under $10,000. And this is before brokerage fees, health insurance, and other expenses. This reason alone is why many agents quit in their first five years.

How many agents stay in the industry longer than five years?

Most industry data suggests that under 20% of agents stay in the industry for over five years. 

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