Why Coaching Programs Fail New Real Estate Agents
Real estate coaches are a dime a dozen. Just Google “real estate coaches,” and you will find pages upon pages of coaches to choose from. Trust me, I’ve done it. It seems like anyone who has success of any kind feels like they can be a coach. From people pitching using social media to grow your presence or some “magical” program that will generate you more leads than you can ever handle, everyone has an angle. It doesn’t seem to matter how long they have been in the industry, either!
Regardless of what these people are pitching, there is one theme that seems to be consistent across the board: their education is for veteran agents and not new agents. This is something I have seen firsthand across the industry, from associations to brokerages; education for new agents is not a top priority, no matter how much it should be!
Brokerages Offer Very Minimal Education for New Agents
To understand why coaching programs fail agents, you first need to know why coaching programs even exist. When I was thinking about opening up my brokerage, I spent a lot of time studying the education that other brokerages offered. I had seen firsthand in my career how little education for new agents was available at the brokerages I worked at, but I wanted to know if it was just my experience or if other agents had experienced the same. So I started asking every agent I met what education their brokerages offered, and spent hundreds of hours studying every brokerage I could find information on. What I found was that my experience was not an exception and was (sadly) the norm in the industry.
Learning this, I wanted to dive deeper into why brokerages did not focus on new agents. I found it started at the top. When the National Association of Realtors was established in the early 1900s, its focus was on bringing credibility to a new industry, so it focused on ensuring that people who called themselves “Realtors” were educated on the ethics of the position. This was a great first step, but in the hundred-plus years since, it has been the only step. This means that the task of educating agents fell to state and local associations. While some do offer classes for new agents, they are not a top priority of the association and more or less look at them as a way to generate more income. This means the responsibility of educating new agents ultimately falls on brokerages. This might sound like a good idea on the surface since brokerages are on the ground level with agents, but when you dig deeper, you see that there is no standard education that brokerages have to offer their agents. They can offer as much or as little as they want. But, while some brokerages take education seriously (and make sure you join one that does), unfortunately, most don’t. Plus, and here is the kicker, brokerages are not designed to help new agents. To help you understand why, let me explain how brokerages work.
You see, a brokerage, like any business, has to generate income to stay in business. To do this, it might charge some fees like transaction fees, processing fees, or printing fees (To learn more about the fees brokerages charge, check out my blog What Expenses do Real Estate Agents Have? HERE), but these fees are not enough to keep a real estate business running. It needs a major source of income to do this. This is where agents’ commissions come into the equation. The main source of most brokerages’ income comes from what they make when their agents sell a property. For example, if an agent brings in a $10,000 commission check and is on a 70/30 plan (70% agent/30% brokerage), the brokerage would make ~$3,000. So, to stay in business, it needs to have agents making sales. Who makes most of the sales? Veteran agents. So it makes the owners of brokerages focus all of their education on veteran agents who produce. The more these people (who are already proven income generators) make, the more the brokerage makes. This is why I chose the subtitle of my book as “How to Succeed in an Industry Unintentionally Designed For Failure.”
So now that you know why there is minimal education for agents from the association and brokerage levels, let’s talk about why coaching is no different.
Coaching is Designed for Veteran Agents
Since there is minimal education for new agents, agents are forced to figure things out on their own. This forces them to try to piece together their business while also trying to generate clients to stay afloat. This results in agents creating a collage of different things they hope will work together to help them succeed. It’s like trying to do a paint-by-numbers when you’re color blind. You’ll paint the painting within the boundaries required, but it’s going to look like a hot mess of mixed-up colors that don’t work well together. This is where coaching comes in.
A majority of the coaching in the industry is designed to help agents repaint their painting with the correct colors in the correct places. They try to help the agents rebuild their business in the correct order it should have been built in the beginning (well, at least the good coaches do). This is great for veteran agents, but it leaves new agents to continue to have to fend for themselves (just like how associations and brokerages do), only ready to help IF they figure out how to survive.
According to the National Association of Realtors, 75% of new agents don’t make it past their first year.
NOTE: Knowing how little coaching there is for new agents is one of the main reasons why I created the License to Legend coaching program! It’s designed specifically to help new real estate agents succeed in this challenging industry. You can learn more about it HERE.
Being in the industry for over two decades, I have seen it from pretty much every angle. I’ve seen it as an agent, brokerage owner, mortgage company owner, and title company owner. From all of my experience, educating new agents is not a priority in the real estate industry. But, to be fair, I don’t want to be naive and say there is no equation for new agents, as I am sure there is, so this leads me to the last reason why coaching programs fail new real estate agents. Coaching programs (by brokerages and coaches) are too damn long!
Coaching Programs Are Not Designed for Quickness
There is a mindset across the industry that it takes a lot of time to build a real estate business. While this is true in the sense that it takes time to get enough people to trust and use you, I don’t believe it is true to build out a business. For years, I heard agents talk about how long it takes to create everything needed to run their business. Mostly, it was the same story, telling me about how frustrated they felt while building everything and how it felt like it took forever to do so. Hearing this over and over, and along with my experience, I believed there had to be a way for new agents to learn quickly what took agents years, so they could avoid these same frustrations. This is why the 6-week mentorship program was created at my brokerage. We believed that if we could provide new agents with everything they needed in just six weeks, they could increase their chances of succeeding tremendously, and they did! We had almost 50 agents go through the program, and on average, they sold and made two to four times the amount of sales and income compared to most first-year agents. It is also why my coaching program for new agents, called License to Legend (you can learn more about it HERE), is only two weeks!
But my brokerage and coaching program are the exception, not the norm, when it comes to coaching new agents. Similar to how many “therapists” convince people to see them for long periods of time so they make more money, most coaching programs require agents to commit to three, six, or even twelve-month programs (if not longer). Now, to be clear, I am not knocking these programs. I believe any education that helps agents in any way, shape, or form is good for the industry, and maybe some people need programs this long. My focus is on new agents, and these programs (which, as I mentioned earlier, are mostly designed for veteran agents) are not helpful for people who enter the industry and need to get “up to speed” quickly. New agents don’t have the luxury of time. If they don’t build their business quickly, they will be part of the unnecessary percentage of agents who fail out of the industry in their first year.
If you are considering entering the real estate industry, make sure you understand what you are walking into and how to make sure you set yourself up for success. The more you do BEFORE you enter the industry, the more success you will have after.
“You cannot change your destination overnight, but you can change your direction overnight.”—Jim Rohn
If you’re looking for a coaching program that is actually designed for new real estate agents, I encourage you to check out the program I have developed to help agents BEFORE they enter the industry. The program is designed to help you avoid the frustrations I and so many other agents felt when entering the industry, struggling to survive while clinging to the belief we will succeed. It is completely based on proven results from my experience as a top-producing agent, owning a brokerage for almost a decade (where I helped agents average 2x4 times the amount of sales and income), and from spending over 25,000 hours learning from history’s most legendary people! If this sounds like something that would benefit you, please click HERE to set up a FREE 30 Minute Virtual Call to learn more about how I can help you.