Why Real Estate Agents Turnover Rate Is So High

Written by Posted On Sunday, 27 September 2020 05:00

A discussion about real estate agent turnover can be troubling and hard to quantify.

There is no way to access facts, so I reference herein assumptions and opinions recently observed in the Real Estate Master Mind Group.

A Realtor, who will remain nameless, asked in bold letters that ‘Real estate agents have an annual turnover rate of 88%.  Why is the turnover rate so high?” 

One agent questioned the data source, rightfully so.  Another blamed the broker, another said it takes longer than agents are lead to believe to generate sales, too many agents chasing too few listings, new agents need a mentor, and so on.  

In the real world, we are talking about what the broker refers to as the  ‘retention rate.’ Your broker is in two businesses: recruiting and retention.  Recruiting is challenging, for sure. Retaining the agent is the problem because the agent needs to close sales. 

Here is where this gets sticky. Agents are trained today like they were a hundred years ago to list resales and find resale shoppers. 

 It’s a massive step from placing a real estate license to becoming comfortable with all that needs to be learned and practiced to list or sell a resale. 

There is a  costly and cultural blindspot among many broker-owners located in markets where home building is active. 

In effect, today’s new agent is encouraged to compete with every other member of the local Realtor association for saleable listings.

Real estate agents are taught that they need inventory because, as the adage goes, “he who controls the inventory controls the market.” Not so today. They need buyers and saleable inventory, whether they listed it or not, be it a resale or a new home.

The adage is a well-intended statement, with unintentional costly consequences when today’s agents are not encouraged or trained to reach out to new home shoppers. 

How long does it take a new agent to learn the listing process or become comfortable with a listing agreement? Do they have a clue as to how competitive obtaining listings can be? 

On the other hand, what does an agent need to know to get comfortable showing resales?  When do they become confident with recommending lenders, negotiating offers, preparing bids, and reviewing purchase agreements?  Is it any wonder that agent turnover is so high? 

That’s why selling and listing resale real estate is the most challenging commission sales job in America. But it no longer has to be this way.  

And it is why showing new homes is by far the easiest sale and closing in real estate. 

What if agents could start showing a home their first week on the job and not need one real estate skill to do it? 

What if selling a new home at times included embedded listing opportunities in addition to the sale? 

What if this approach included finding the right inventory fast, and included a professional partner that did all the work? 

The partner, also known as the onsite sales consultant, shows the home, answers all questions related to the purchase, helps your prospect apply for financing, writes the contract, and manages the transaction through closing and move-in. 

Then the onsite consultant thanks you for what the seller paid you to do: introduce a prospect that purchases.  No cost or commission split is required. 

 In some cases, sellers will list their homes with the agent because they need help through the buy/sell processes.  

The solution: If there is new home construction in your market, showing a new home is precisely what new agents should be taught from day 1.  New homes are the most accessible sale in real estate.

A percentage of these new home buyers will have homes to sell. Who better to list the home than the agent that sold the new one?

Encouraging and training new agents to show new homes would improve retention rates because they will start making sales they may have lost. 

 Agents do not need to learn construction. They need to know how to get to the new homes’ sales office.  In both rising markets and slow markets, builders need qualified shoppers, and agents need salable inventory. 

There may come a day when technology can catch its breath and let the real estate industry reimagine the need to train new agents. 

Today, it’s not about controlling resale inventory.  It is about making more sales with fewer prospects. 

After all, the mission is commission if the intention is retention.

Rate this item
(1 Vote)
David Fletcher, NHCB

Lifetime Achiever David Fletcher is Founder and CEO of New Home Co-Broker Academy LLC, home of the New Home Co-Broker (NHCB) designation. More than 4,500 real estate agents have completed the  Academy's three-hour online course, How To Build A New Homes Niche, and earned their NEW HOME CO-BROKER (NHCB) certification. 

If you are serious about wanting to learn how to better serve new home shoppers, work with onsite sales consultants, and market your brand with credentials to new home buyers, this is the course you need. Money-back guarantee. 

Learn more and enroll.com

 

newhomecobroker.com

Agent Resource

How to capture your next prospect - click here

Realty Times

From buying and selling advice for consumers to money-making tips for Agents, our content, updated daily, has made Realty Times® a must-read, and see, for anyone involved in Real Estate.