Editor’s note: This is the first of a four-part series.

What are the correlates of "new agent" success? Two studies from the Texas Association of Realtors reveal intriguing results for both new agents and those who hire, manage and train them.

On Aug. 28, 2012, the Texas Association of Realtors (TAR) sent a Zoomerang Web survey to 13,000 of its broker/manager members with the purpose of identifying how to improve the quality of the homebuying and selling experience for Texas homeowners. A second purpose was to assist TAR in identifying the factors that contribute to sales success of new agents, as well as those factors that result in agents leaving the business. A total of 277 brokers/managers participated in the study: 265 in the online survey and 12 in the one-on-one interviews.

Office size
The large majority of offices (70 percent) had 10 or fewer agents. Another 16 percent had offices with 11-25 agents. In other words, 86 percent of all offices had 25 or fewer agents. This matched a secondary finding that 71 percent of the respondents classified themselves as small independents, boutiques or family-owned businesses. Ten percent were virtual (no physical location), and 19 percent were affiliated with a national/international franchise.

Seventy-two percent of all survey respondents currently offer sales training. Of that group, 43 percent created their training in-house. Another 47 percent relied on one-on-one mentoring/coaching. The remaining 10 percent relied on outside vendors or their local association to provide training. Only 7 percent charged a fee for their training vs. 93 percent that had no fee.

In 72 percent of the offices, the broker/manager was responsible for training. In the other 28 percent of the offices, GRI, CRS, and/or an outside training company provided the training. Of these, 8 percent relied on online (video and webinars) for their primary source of sales training. For those who did offer in-office sales training, 72 percent assigned a mentor, trainer or other point person to assist new agents.

A major challenge nationally is the high turnover rate for new agents. Broker/managers cited the four issues below as the primary reasons new agents leave the business.

1. Lack of adequate startup capital
Broker/managers cited insufficient startup capital as the main reason new agents leave the business. Most new agents were uninformed about the initial startup costs that range from $1,200-$2,000. (This includes local association, MLS, state association fees, NAR fees, plus signs, cards, lockboxes, etc.) They also are unfamiliar with how commission splits work as well as how long it takes to ramp up a new business.

2. Unrealistic expectations
Many new agents view real estate as a job rather than starting a new sales-based business. They believe their broker will generate leads for them rather than having to do it themselves. They are also unprepared for how difficult the business actually is.

As one broker put it: "(New agents) are naive; they lack the knowledge of what it will take to succeed. They enter the business believing that real estate will be an easy way to make money, and the difficulty is way beyond what they expected."

3. Part-time vs. full-time
The survey respondents were virtually unanimous on this point: Real estate is a full-time career that requires a full-time commitment; anything less usually results in failure. The challenge is that part-time agents represent a sizable proportion of all Texas agents. Fifty-five percent of the survey respondents replied that at least 25 percent of their agents were part-time.

4. Mindset/preparation/competence/confidence
Mindset is an important predictor of real estate success. The most damaging mindset is one were the agent takes shortcuts. This often starts with pre-licensing training. Ten of the 12 of the brokers who were interviewed on a one-on-one basis agreed that agents who had taken face-to-face training were much better prepared for the business.

As one manager observed: "Agents who took the shortcut versions of pre-licensing training or who attended online licensing training know next to nothing. They probably have never seen a completed contract. They come out of real estate school completely unprepared to work with the demands of buyers and sellers in today’s highly complex market."

Previous careers
Overall, the people entering the Texas real estate industry come from virtually every walk of life. The broker/managers identified the top two careers that their two most recent hires had worked in as being either "teacher" or "homemaker." Other high-probability hires were those who had been in sales-related careers or in another aspect of the real estate industry — i.e., title, new-home sales, or mortgage.

A number of broker/managers drew a distinction between those who had corporate sales experience and were accustomed to generating their own leads versus those who worked in retail sales positions in stores where they took orders at the cash register. Those who had the corporate sales background fared significantly better.

Would you like to know more about the correlates of new agent success? If so, don’t miss Part 2.

Show Comments Hide Comments
Sign up for Inman’s Morning Headlines
What you need to know to start your day with all the latest industry developments
By submitting your email address, you agree to receive marketing emails from Inman.
Thank you for subscribing to Morning Headlines.
Back to top
Only 3 days left to register for Inman Connect Las Vegas before prices go up! Don't miss the premier event for real estate pros.Register Now ×
Limited Time Offer: Get 1 year of Inman Select for $199SUBSCRIBE×
Log in
If you created your account with Google or Facebook
Don't have an account?
Forgot your password?
No Problem

Simply enter the email address you used to create your account and click "Reset Password". You will receive additional instructions via email.

Forgot your username? If so please contact customer support at (510) 658-9252

Password Reset Confirmation

Password Reset Instructions have been sent to

Subscribe to The Weekender
Get the week's leading headlines delivered straight to your inbox.
Top headlines from around the real estate industry. Breaking news as it happens.
15 stories covering tech, special reports, video and opinion.
Unique features from hacker profiles to portal watch and video interviews.
Unique features from hacker profiles to portal watch and video interviews.
It looks like you’re already a Select Member!
To subscribe to exclusive newsletters, visit your email preferences in the account settings.
Up-to-the-minute news and interviews in your inbox, ticket discounts for Inman events and more
1-Step CheckoutPay with a credit card
By continuing, you agree to Inman’s Terms of Use and Privacy Policy.

You will be charged . Your subscription will automatically renew for on . For more details on our payment terms and how to cancel, click here.

Interested in a group subscription?
Finish setting up your subscription