Real Estate May 31, 2024

Why 85% of Agents Get Out of the Business Every 5 Years~ Free Realtor Training!

The Real Estate Industry’s High Turnover Rate: Insights and Solutions

Tony picked this topic so I have thoughts. You know my first thought, Tony, when you said 85% of agents are out of the business every five years, my first thought was, “Gee, I hope I’m not one of them.” How do I keep myself from being one of them? I’m curious to hear your thoughts on this because I know you specifically said it’s not about money. So why don’t you lay this on us, and we’ll ask some questions once you give us the big overall picture.

Sure. The reason I feel I have the experience to discuss this is due to my role as a broker. Having over 500 agents, we’ve consistently seen this turnover rate. It’s a national average, and it reflects in our numbers annually. Every year, we bring on two new agents weekly on average, but one and a half or more are getting out of the business. It’s not just about agents who don’t do any business; some agents who close 10-12 deals a year still decide to leave.

The point is that it’s not about money; it’s about time. Agents often get to a point where they don’t want to invest their time anymore. They may make money and have relationships but decide they don’t want to continue, even if it’s just doing a few transactions a year. They might know they can make money but don’t want to put in the time. This is a significant insight, but we can delve into more details.

No, I think that’s huge, Tony. When agents decide not to renew, I know that at Century 21 HomeStar, we offer a unique option called the holding company. Maybe this is a good time to discuss that. How can agents stay in the business without paying all those dues?

Exactly. We have a separate entity called Homestar Real Estate Network, which is a full-blown real estate company for referrals only. Agents can keep their licenses active, network, and even print cards with our company name. When they get a buyer or seller, they refer it to one of our agents and earn a minimum of a 25% referral fee, sometimes higher. This way, they don’t have ongoing expenses and can stay in the game.

That’s a brilliant solution, Tony. It reminds me of how we often talk about our real estate business as a gold mine. You do all the hard work to dig and find gold, but if you hit a rough patch, you don’t just abandon it. You can scale back or stop working but still keep reaping the benefits.

Absolutely, Mike. The key is to have a plan and not abandon your gold mine. Agents need to keep their licenses active, even if they move into our referral network. This way, they remain connected to the industry and can continue to earn without active involvement. This option helps them stay engaged and keep the door open for future opportunities.

Exactly, Tony. And about the gold mine analogy, what happens is agents keep pushing their sphere to need an agent they can trust. If they step away without a plan, they essentially help other agents benefit from their previous efforts. So, it’s crucial to stay active and keep their clients engaged.

Yes, and I often tell agents that they’re really helping the industry if they leave because other agents will take advantage of their abandoned gold mine. Staying active, even minimally, ensures they reap the benefits of their hard work. Our setup at Century 21 HomeStar, with low fees and a supportive network, makes it easier for agents to stay in the business without financial strain.

Tony, you mentioned that it’s not about money but about time. However, there’s also a financial element to consider. Some agents might be on a team or at a brokerage where they accumulate fees, which can be discouraging if their production goes down. How do we address this?

We have a setup where agents only pay when they make money. There are no ongoing fees or charges, which is crucial for agents who might have fluctuating business. We chose Century 21 partly because of their no monthly or yearly fees, making it easier for agents to stay without financial pressure.

And for agents out there, whether you’re with our brokerage or another, it’s important to have a conversation with your broker or manager about your setup. If you’re accumulating fees and your production might go down, it’s essential to find out if your current situation is the best fit for you.

Absolutely, Mike. Every agent should shop around and find the best fit for their needs. Our low-cost structure at Century 21 HomeStar is designed to support agents through all stages of their career, ensuring they can stay in the industry without unnecessary financial burdens.

By understanding the importance of time, exploring options like referral networks, and ensuring a low-cost setup, agents can better navigate the challenges of the real estate industry and avoid becoming part of the 85% who leave the business.


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