With rapid technological advancements, the rise of agentless real estate platforms, and continual improvements in AI tools like Virtual Staging AI, the place of agents in the professional flow chart seems to be dwindling every year. Now, a new out-of-court settlement promises to shake the industry to its core.
If you are looking for a way out of real estate, you may be wondering can a real estate agent quit. Yes, they can. Estate agents are independent contractors, which means they can leave a broker or the whole industry at will.
Of course, the ease of the transition will also depend on the contract the agent signed with the broker.
Below we travel into the reasons why real estate agents may quit. By understanding these factors, you can make informed decisions about your own career path in this dynamic field.
Reasons Real Estate Agents Quit
Without the proper support, even the best job in the world can become a devastating hurdle. Here are the top five reasons agents throw in the towel:
The Wrong Mindset
Having the wrong mindset can be a significant barrier to success. Most agents come into the industry hoping to make quick cash and skyrocket their bank balance to millions. Though there are agents who bag seven figures, it doesn’t happen overnight.
The independent contractor’s life is not for everyone. If you had the opportunity to read the article on the 5 negative factors of being a real estate agent, then you’ve seen that this industry comes with its own unique set of challenges and stressors.
The uncertainty of income, coupled with constant rejection or setbacks, can lead to a negative mindset, which may cause an agent to quit. There is also the element of fierce competition that can swallow agents without a good business plan.
It’s crucial that agents learn from those who have succeeded in this field, choose their brokers wisely, and seek out coaching and support.
No Financial Plan
Another common pitfall is entering the industry without a solid financial plan in place. Many new agents underestimate expenses such as brokerage fees, marketing costs, and lead generation efforts.
The harsh reality of the industry is that you need money to start. It may be months before the sale closes, and you get paid since agents only receive their commission after the deal has closed.
Without proper planning and budgeting, it becomes extremely difficult for you to succeed.
I would also advise you to set aside about three months’ worth of living expenses in an emergency fund to carry you and your business while you wait for the close.
When creating your financial plan, remember to factor in your personal goals as well. What do you want to achieve in your personal life, say, purchasing a car? What would that journey look like? Work backwards, mapping the journey from achievement to where you are now.
Difficulties Generating Leads
Generating leads is another hurdle that especially newer agents face early in their careers. Building a robust network takes time and effort but forms the backbone of any successful real estate business.
Alongside networking effectively, developing strategic lead-generation tactics plays an integral role in ensuring continuance within the industry.
Some agents opt to join Redfin Realty which hires its agents, pays them a salary, and has tools that help them generate leads. This leaves them to focus on serving clients the best way they can.
Changing Markets
The ever-changing nature of the property markets further complicates matters for agents. These markets are volatile by nature. Shifts in demand patterns, fluctuations in interest rates, or changes in economic conditions can all impact one’s business adversely if they’re unprepared or unable to adapt quickly enough.
For example, real estate is a seasonal industry. There are seasons of abundance when buyers frequently pick up property, contrasted by cooler times when property spends longer on the market.
Agents who don’t understand this change in landscape may find themselves struggling to make bank.
Loss of Motivation
Loss of motivation is perhaps one of the most insidious reasons some realtors end up quitting their profession. This industry demands much from its professionals.
There are long hours spent showing properties around town, unrealistic client expectations, and the need for consistent availability. All these factors can eventually take their toll, leading to burnout if not managed properly over time.
The NAR Legal Tale
The recent settlement agreement by the National Association of Realtors (NAR) in the Sitzer-Burnett case has spelled significant uncertainty for real estate agents when it comes to compensation. As part of the $418 million settlement to be paid out over four years, the NAR agreed to two things:
restrict the display of broker fees on Multiple Listing Services (MLS)
Mandate that brokers enter into written agreements with buyers before proceeding with home showings.
These new restrictions have caused widespread fear and concern among agents that it will drastically reduce compensation for buyer’s agents. Many worry that the inability to publicly advertise commission rates could lead buyers to opt out of using real estate professionals altogether when purchasing a home. The potential of significantly lower fees has sowed doubt about the long-term viability of careers in the industry.
Compounding these worries are predictions from analysts like TD Cowen Insights, estimating that real estate commissions could plummet by 25 to 50% due to the settlement terms. Such a steep decline in compensation has led experts to forecast a massive evacuation of brokers and agents from the industry in the comingmonths.
The NAR settlement has ushered in an era of unease and unpredictability regarding agent compensation models and the sustainability of careers in this field. Only time will tell how significantly the new landscape will actually impact the livelihoods of real estate professionals nationwide.
Fireproof Your Career
Fireproofing your career in the real estate industry, especially amidst changing landscapes and unpredictable market trends, requires a strategic approach. Here are three strategies you can use to keep your business going:
Offering Adaptability
In the midst of the uncertainty surrounding the NAR settlement, it’s crucial for real estate agents to adopt adaptability. Offering flexibility and promptly meeting new requirements should be a top priority as agents strive to continue serving their clients in the best way possible despite the changing landscape.
If you are the buyer’s agent, you will need to incorporate creativity. Find ways to show clients why your services are worth the 3% despite the new laws.
Provide true value, and go the extra mile.
For example, if your client is buying new construction, use your connections to get them ideal upgrades, refer them to an interior designer friend, or even advise them on how to maximize features to improve the resale value.
Business Innovation
Another critical element for longevity in this field is business innovation. Keep improving your business model to meet evolving buyer and seller needs.
Stay vigilant about monitoring market trends and industry shifts so you can position yourself to provide exemplary service no matter what curveballs get thrown your way. Don’t let yourself stagnate. Always be ready to pivot.
Instead of seeing AI as an enemy, give a read-through to what AI comes up with. Capitalize technology like Zapier for automation or Grammarly to write emails.
Perhaps most importantly, don’t underestimate the power of support systems during uncertain times like these. Be there for your clients.
I can guarantee you they have questions about the way forward from here. Be ready with an ear and an answer. Let them know that your support for them is unrelenting despite industry changes.
If you’re in a leadership role, make an effort to encourage other agents and help them understand the road ahead.
For individual agents, lean on your brokers, mentors, and peers for advice on navigating these uncharted waters. Be open about discussing your fears, anxieties, and questions. A problem shared is a problem halved.
Weigh Your Options Before Exiting
It’s evident that the real estate industry is undergoing significant changes, some of which may lead to agents quitting their profession. However, with the right mindset, a solid financial plan, effective lead-generation strategies, and adaptability in changing markets, you can still thrive.
Next Steps: Ready to navigate these turbulent waters? Here are actionable steps you can take today:
1. Assess your mindset: Identify areas where negativity might be creeping in and work on developing positivity. 2. Review your finances: Understand what expenses you have as an agent and create a budget that covers these costs while also providing for personal needs. 3. Refine: Develop your lead generation strategy. 4. Stay up-to-date: Keep updated with industry news so you’re always prepared for any changes that could impact how you do business.
We’d love to hear from our readers about their experiences navigating these shifts within the real estate industry—feel free to share them below! Or better yet, try out our suggested action steps above and let us know how they’ve helped keep your career on track despite all odds!
