The Importance of Real Estate Agent Retention

Agents who have been around the block know that negotiation and meeting prospects are only a fraction of the job.

Rikard Jonsson
Rikard Jonsson
April 21, 2022
5 min read
The Importance of Real Estate Agent Retention

Table of content

While real estate is an appealing career choice for many, agents who have been around the block know that negotiation and meeting prospects is only a fraction of the job. The requirements are never ending and ever changing, demanding agents to wear many different hats. 

Why does real estate have such a high drop-out rate?
Events of the last few years have created the phenomenon of the ‘Great Resignation’; last April, a record 4 million people worldwide quit their jobs, with 41% of workers considering quitting or changing professions entirely.  These stats are all the more concerning when we take into account real estate as an industry that already has a high dropout rate. According to the NAR, in 2020 the median experience of US agents was just eight years, while the median length of time at an agency or brokerage is even lower, at just five years.

Agents quit for a number of reasons: 

  • The stress of no passive income - unlike other professionals, many agents actually start their real estate career having migrated from other industries, where a regular salary is the norm. The fact that their entire income is now based off commissions can be a major stress point for agents new to the game. 
  • Inability to scale effectively - while business could be booming at one point or another with multiple sales streaks that last for a few months, many new agents struggle with the ebb and flow that is characteristic of the job, and lack the understanding and skill it takes to scale business over time. 
  • Lack of sufficient people and communication skills - because buying a house is arguably the single biggest financial decision for most people, the customer journey can be emotionally charged and certainly emotions-led. Agents have to be calm amidst the storm, and possess the mental fortitude to ride the ups and downs, as well as guide clients into making the best possible decisions that genuinely serve their interests. 
  • Lack of support - Because of the great demands of the job, agents experience burn out from lacking the right skills in order to meet business goals or the tools to keep on top of tasks efficiently . This is especially the case if their agency or brokerage is not providing the right systems and processes to help them in an otherwise rejection-heavy line of work. 

Why brokerages need to do better 

  1. Investing in existing agents is an investment in the business itself and to ensure future growth. It also ensures retaining high calibre agents who are responsible for building healthy pipelines, closing deals and maintaining a healthy roster of clients. 
  2. Recruiting new agents can be necessary but costly, costing anywhere from $5000 to $10,000 on the high end. That means losing even one further down the line means the company is losing thousands of dollars each year.
  3. Offering a wide scope of support - monetarily, professionally, mentally - to agents means creating a stable and supportive environment that not only evokes loyalty from agents but actually inspires them to recommend the company to other up and coming talented agents. According to one survey of over 500 real estate agents, 90% said they would recommend their current brokerage to other agents, on top of 83% saying they regarded ‘support from their brokers’ as one of the top three benefits they received from their brokerage.
  4. Retaining top tier agents means having a team of deal closers who earn more than four times what beginners bring in. Not only that, these agents have racked up a wealth of specialized knowledge and first hand experience to keep churning a healthy amount of valuable referrals and repeat clients - a huge win for any brokerage. 
  5. Being able to know exactly what kind of calibre your agents are bringing to the table also means being able to refine what the brand stands for, and in return, being able to conduct more cost-efficient and effective agent recruitment programs that promote a ‘better fit’ between both agency and agent. 
Related article:

Related post

Heading

This is some text inside of a div block.
Read articleText Link

Subscribe to updates

Subscribe to our collection of expert opinions, analysis, and insights on the real estate industry with a new article every week.
By subscribing you agree to with our Privacy Policy.

Thank you!

If you wish to cancel your subscription, use the unsubscribe link in our email updates.

Oops!

Something went wrong while submitting the form.
Share
The second largest concentration of billion dollar companies per capita in the world.