Turn up the volume on your real estate success at Inman On Tour: Nashville! Connect with industry trailblazers and top-tier speakers to gain powerful insights, cutting-edge strategies, and invaluable connections. Elevate your business and achieve your boldest goals — all with Music City magic. Register now.
According to Redfin’s Joe Rath, 71 percent of real estate agents didn’t close any deals last year.” This brings up an interesting question for those in that 71 percent — What the heck are you doing in this industry?
To address the elephant in the room, I will acknowledge that 2024 was touted as the worst year in real estate since 1995. According to the National Association of Realtors, “On an annual basis, existing-home sales (4.06 million) fell to the lowest level in nearly 30 years, while the median price reached a record high of $407,500 in 2024.”
Let’s be real. Would you get a knee replacement done by a surgeon who wasn’t actively performing them? Or go to a dentist for oral surgery when they have no practical experience? Or even get your car repaired by someone who has not worked on a single vehicle for who knows how long?
All of this suggests a second question: “How are those 71 percent surviving?” Unless they are independently wealthy or relying on a partner for income, I believe the simple answer is that they have a full-time gig doing something else. This brings us back to the first question.
There is a larger issue here as well. T360, in their recent Opportunity Report, emphasizes the need for better communication to the public about the need for professional representation. They state:
“It is essential that consumers clearly understand the value of using a real estate professional and are fully informed about the services they are paying for.
“To regain consumer confidence, the real estate industry must shift from an agent-centric approach and place the consumer at the forefront. Transparency, particularly in how buyer agents are compensated, must be prioritized. Demonstrating ethical practices and embracing reforms that enhance accountability are critical steps in rebuilding credibility.
“A public awareness campaign, like the “Got Milk?” campaign, could help. Just as it reminded consumers of milk’s importance in everyday life; the real estate industry could benefit from a “Got Representation?” campaign. This would highlight the value of professional representation in buying or selling a home. Consumers need to understand the roughly 180 tasks involved in an average real estate transaction and the financial and legal pitfalls they face without expert guidance.”
All this is fine and good, but I think a better advertising campaign to the real estate industry might be, “Got Experience?” Call me cynical, but how can we possibly expect, as an industry, to be taken seriously when such a high percentage of our agents do not have the requisite experience to safely navigate a consumer through the largest financial transaction they are likely to make?
It was bad enough when stats showed that in 2023, approximately 50 percent of agents across the country did one or fewer transactions in the entire year. Less than one is zero. Translate that to “no experience.” Zilch. Nada. And all of this during a time when the industry is being turned on its head with new rules and practices, revised forms and more.
With such a large percentage of agents doing no business at all, this means that fewer than 30 percent of agents countrywide are actually doing their job. In light of this, I have a recommendation: let’s reduce the total agent count to those who are actually selling homes. Those who are not selling can go back to their day jobs, and the rest of us can focus on rebuilding credibility and professional standards.
The Opportunity Report also addresses this issue by extolling, “Enhance Professionalism with Strong Licensing Requirements.” They explain, “It is time to stop thinking of agents as salespersons and start identifying them as advisors. To achieve this, there must be stricter licensing requirements that align with the responsibilities of professionals.”
Their 2015 D.A.N.G.E.R. Report identified one of the biggest threats to the industry by stating “Masses of Marginal Agents Destroy Reputation.” They continue, “Nearly a decade later, this issue persists. Many organizations still prioritize quantity over quality, and while many agents are skilled and dedicated, the growing presence of underqualified agents continues to erode the industry’s reputation.”
Personally, I think they are being kind. It is now way worse than that.
They conclude by saying,
“The disparity in training and licensing requirements is very significant. Recent class-action lawsuits may not have directly targeted licensing requirements, but they underscore an underlying shortcoming. In today’s increasingly litigious landscape, inadequate standards could very easily open the door for future lawsuits. Therefore, strengthening licensing requirements is crucial to mitigate these risks and elevate consumer protection even more.”
So … enough of the rant. Where do we go from here?
I believe the time has come for us to seriously rethink how prospective agents get into this industry. I also believe we need to reevaluate the mindset that so many agents have that this is a “part-time” gig they can do on the side.
I recommend the following for the overall industry:
1. Let’s stop the rampant push to fill our brokerages with less-than-experienced agents
The focus, in my opinion, is on filling offices with agents who pay the monthly desk fees required to keep the doors open, rather than focusing on income from actual closed transactions. I took a look at the numbers of transactions in our regional MLS and discovered the following agent sales data for 2024:
- 0 transactions: 6.46 percent
- 1 transaction: 41.52 percent
- 2 transactions: 16.19 percent
- 3 transactions: 8.96 percent
- 4 transactions: 5.80 percent
- 5 transactions: 3.9 percent
- 6 transactions: 3.19 percent
Add it up and you get a whopping 86.03 percent of agents in our MLS sold six or fewer homes in 2023, with fully half of that group only selling one home in all of 2024. If you add the numbers of those selling one or zero, you get 47.98 percent — remarkably close to the nation’s 49.9 percent for 2023.
Before you start thinking that these numbers are a result of the high interest rates, commission lawsuits and other recent issues, I ran the same data in 2016, and the percentage of agents in our region selling six or fewer homes in 2016 was 87.03 percent, 1 percent higher than 2024.
In other words, if you are shocked by these numbers, they have been happening for a very long time. The problem is, no one has apparently been making them headline news until now. The recent spate of lawsuits have revealed the truth of what has been happening for a very long time. Maybe it is time to fix it, instead of business as usual.
2. Let’s raise the bar on licensing
The Opportunity Report provides a look at some other professions and their minimal licensing requirements:
- Bartender: 4 to 20 hours (Alcohol Server Certification)
- Security guard: 8 to 40 hours (depending on the level and state)
- Life insurance agent: 20 to 40 hours
- Pest control technician: 20 to 80 hours
- Real estate agent: 40 to 180 hours (average ~75 hours)
- Tax preparer: 60 to 80 hours
- Home inspector: 60 to 140 hours
- Certified nursing assistant: 75 to 180 hours
- Pharmacy technician: 120 to 600 hours (varies by certification)
- Nail technician: 200 to 600 hours (varies by state)
So let me ask a few simple questions:
- “When was the last time you paid $10,000 to get your nails done?”
- “When was the last time you paid a home inspector $7,500 to inspect a property?”
- “Did you pay tens of thousands to have your taxes prepared?”
No wonder consumers are starting to push back on commissions.
If we are going to continue expecting to receive the high levels of compensation we earn, then I believe we need to dramatically increase the entry-level requirements so as to increase competency and enhance the client experience. It would also weed out those who think that, with minimal training and an extremely low cost of entry, they can do a few transactions a year and earn thousands of money on the side.
For those who are already licensed but doing a very low number of transactions, I recommend the following:
3. Get real or get out
This isn’t a hobby. It is an honorable profession being made dishonorable by a profusion of inexperienced agents with little or no skin in the game and extreme deficits in competency. If you are not going to get serious about this as a business, then please leave the industry, and let the professionals do their job.
4. Get training
This business is not rocket science, but it is very hard work. If you are not willing to put in the hours required to make the calls, knock on doors, and manage your time and resources as if this is a real business, then stick with your nine to five.
For those who do want to succeed, get trained up. Learn how to effectively do the fundamentals. To begin, get a book such as Gary Keller’s The Millionaire Real Estate Agent and memorize the first few chapters. If you do not want to buy the book, go to your local Keller Williams office — they will more than likely be willing to give you a copy for free. Page 36 would be a great place to start; here are some highlights:
“Long ago, I realized that success leaves clues, that people who produce outstanding results do specific things to create those results.”
“Actions are the source of all results .… This process of discovering exactly and specifically what people do to produce a specific result is called modeling.”
“To me, modeling is the pathway to excellence .… The movers and shakers of the world are often professional modelers — people who have mastered the art of learning everything they can by following other people’s experience rather than their own.”
“To model excellence you should be a detective, an investigator, someone who asks lots of questions and tracks down all the clues to what produces excellence .… Building from the successes of others is one of the fundamental aspects of most learning.”
Actively seek out training opportunities that will expand your horizons and push you forward. As you grow, you can also seek out proficient coaches to guide you to the next levels.
5. Get a database
You will need a minimum of 200 contacts in your database to build an effective business. If you can gather this many names (including physical address, cell number and email address), then you will have the foundation needed to begin building.
Utilize an effective CRM to manage your contacts (our team uses Brivity) and set up consistent touches so that you become top-of-mind whenever anyone in your contacts thinks of a real estate agent.
6. Get support
From finding a brokerage that will truly support you to possibly joining a team, find an environment that will provide the support and nurturing necessary to help you succeed. This is a very difficult business to do on your own, especially if you like going on vacation, visiting your children’s games and so on. Those who truly succeed have figured out how to partner up.
7. Get the basics dialed in
There are no end of companies out there trying to get your money. From lead generation companies, web portals, social media training and more. Some agents even resort to billboards, shopping carts at the local supermarket and so on. Truth is, you need to start with the fundamentals and lock them in before spending any money on peripheral things.
Close to 60 percent of our business year in and out comes straight out of our database and, for all intents and purposes, the cost for those deals is close to zero. Contrast that to those who spend thousands a month to buy leads that have a 1 percent or less viability.
Ironically, agents are willing to do almost anything and pay crazy amounts of money to avoid doing the behaviors that will actually build their business. Lock in the fundamentals and then, once you have a steady stream of business, you can start to get creative. I wish someone had stressed this to me at the beginning of my career.
8. Get out there
Do not be a secret agent. You have to be visible. You need to learn how to get in front of people — if you manage to establish enough relationships, some of those will want you to help them buy or sell a home or will know someone who does.
It is time we start taking this business more seriously. We need to raise the bar and improve professional standards. We also need to realize that not everyone is cut out for this business: If you are not willing or able to put in the appropriate amount of time, do the activities required to succeed or, if you are working hard but not seeing any fruit, then you should consider other callings.
On the other hand, for those who are looking to make this a full-time career, take it seriously and put in the required activities, there can be a bright future ahead.
