In November 2012 the Texas Association of Realtors surveyed approximately 5,000 agents who had been licensed for less than two years. The goal was to determine the agents’ perceptions of their pre-licensing experience as well as their experiences as they launched their real estate careers.
What is the path to new agent success in the real estate industry? Here’s what the 680 new licensees who responded had to say about their experiences.
1. Older agents still the norm
The median age of Realtors continues to be in the mid-50s. Part of the reason for this is that many people elect a real estate career after they have raised their children or transitioned from a previous career such as teaching.
According to the agent responses, 15.3 percent were born in 1981 or later (age 32 or younger), 39.6 percent were born between 1965 and 1980 (ages 32-47), 41.4 percent were born between 1946 and 1964 (ages 48-66), and only 3.7 percent were born before 1946 (66 and older).
2. Most-needed skill sets
New agents reported the four skills they felt most contributed to real estate success were being a people person who is "comfortable working with strangers" (72.4 percent); "professionalism" (67.5 percent); and "determination" and "being a self-starter" (tied for third at 58.2 percent).
3. Pre-licensing training effectiveness in preparing agents to become practitioners
Many people have likened pre-licensing training to preparing to take the written version of the driver’s test. Once you pass the test, you actually have to learn to drive. The same appears to be true for real estate.
A common complaint among many agents is that the pre-licensing training often doesn’t match the skill set they need to become effective practitioners. This was borne out by the new agents for whom 56.2 percent felt their pre-licensing training did prepare them to become practitioners vs. 43.8 percent who felt that their pre-licensing training did not prepare them to be practitioners.
4. The four most necessary skills once agents acquired their licenses
The four critical skills the agents cited as being the most important to them once they obtained their license were "contract-to-close" (62.6 percent); "contract basics" (56.9 percent); "mortgage lending" (54.8 percent); and "listing essentials" (54.5 percent).
5. The three biggest surprises
The biggest surprise for new agents (20.2 percent) was the approximately $1,500 to $2,000 in initial startup fees in addition to the cost of their pre-licensing and post-licensing courses. They also didn’t anticipate the regular ongoing expenses related to the business. The two other biggest surprises were "difficulty meeting people" (20.1 percent) and "difficulty in getting started" (19.2 percent).
6. The three hardest parts of the business
In addition to the 20.1 percent of agents who cited "difficulty meeting people" as one of the biggest surprises, "lead generation" was the most often cited as the hardest part of the business (19.2 percent). The second-hardest part of the business was working with the contracts (15.6 percent), and contract-to-close including lending issues (14.4 percent).
7. Sources of their first three deals
Previous studies have shown that new agents normally close their first two deals from their sphere of influence and from open houses. The Texas study had similar findings with 52.3 percent generating at least one of their first three deals from their sphere of influence. Other sources include 28.1 percent from their broker, 17.8 percent from another agent, and 13.2 percent from an open house.
The most surprising result came under the category of "other." "Floor time" was not one of the survey responses (the agents had to write the response in by hand) and yet it accounted for 10.2 percent of the total responses. Moreover, it’s unclear whether some of the leads "from my broker" were all generated as direct broker referrals or if they came from floor time since this option was not included in the main survey responses.
8. Amount of prospecting time
When agents first start their real estate careers it’s critical that they spend as much time as possible doing lead generation. In fact, failure to generate leads is the primary reason most agents leave the business. The survey showed that many agents were falling short in the amount of lead generation time they were doing. Specifically, about one-third (33.2 percent) of the agents prospected less than one hour daily; 38.7 percent prospected one to two hours daily; and 28.2 percent prospected more than two hours daily.
9. Most-used technology
The three most important pieces of technology that new agents use the most are a smartphone (84.7 percent), the broker’s website (55 percent), and a tablet PC (42.4 percent).
10. Most-used social media sites and apps
The most-used social media sites that new agents use are their Facebook personal profile page (70.3 percent), LinkedIn (40.6 percent), and a Facebook business page (29.7 percent.) The most-used apps mirror the results from the most-used social media sites: Facebook (73 percent), Realtor.com (45.5 percent), and LinkedIn (35 percent).
New agents must be made aware of the financial realities of the business and the fact that real estate is a sales profession that will require them to generate their own leads and manage their own business. They also must be encouraged to obtain as much training on the core essentials (lead generation, lead conversion, contracts, negotiation, and listing and buyer skills) as early in their careers as possible.
Finally, it’s important that new agents work with a manager, trainer or mentor to assist them in meeting the challenges they face.