6 Reasons Why Most Real Estate Agents Will Fail in a Shifting Market

Like most real estate agents and team leaders, are you fearful about what's coming in the real estate market in our economy? Is the fear, uncertainty, and doubt getting the best of you and hurting your ability to move forward in your business? In today's episode, I'm going to cover the six reasons why most agents will fail in this shifting market and what you can do about it. And I'm talking a lot of agents are going to get out of the real estate business in the next year or two or three because they're not equipped to handle this shift. My name is Lars Hedenborg. I'm the founder of Real Estate B School. I help agents and team leaders grow and scale their businesses in a very specific way so that they can systematically increase their net worth and their time away from the office. Before I get into today's episode, make sure you grab a copy of my free book, Scale or achieve true freedom in your real estate business and live your life without regrets. Just go to scaleordiebook.com that scale or Die book and grab your free copy. Now, you might be asking yourself, you know, why would I listen to this guy, Lars? What does he know about my real estate business or a shifting market? I got into real estate right before the Great Recession hit hard around the country. And in my market, in my local market, our agent roster went from 15,000 to 5,000 agents. We lost two thirds of our roster, and that was similar to other parts of the country. But I went from 44 transactions in my first full year in real estate, 2008. That's when the recession really started to take hold to 58 transactions to 118 transactions, to 178 to 248 in 2012. That's kind of when the Great Recession ended and things started to get back to normal, then to 312 transactions and then to 453 that year. We did 453 transactions. I worked one day a week when I was in town. I think was a total of 42 days. And I made something like $2,800 per hour that I invested in that business. 2013 is when I launched Real Estate B School. And all I've been doing and obsessing over all these years is helping agents scale in times of uncertainty and chaos. And that's what we're going to talk about in these six reasons. Number one is a weak mindset. I just spent some time with Tony Robbins at an event, and I actually spent some time personally with him after the event. I've been through all of his stuff and his big thing. And my big takeaway from my time with him is that 80% of your success in anything comes down to your psychology, your mindset. 20% are tactics and strategies. Use weight loss as an example, right? There's no shortage of how you could lose weight and the types of things you could do to lose weight. But you know, we're all suffering with like a few extra lbs on our physical body. So why is that? Why do we push hard, lose some weight and then we just go back to normal? It's the mindset that psychology we attach to our physical bodies. The same thing goes in business, right? If we let our mindset go to a place of like, oh, there's bad stuff going on, I'm not going to be successful, or how am I going to be successful? And we bring that negativity into our world and we don't guard our heart, guard our minds, we will have a challenge being successful. So that's it. Weak mindset will get the best of you in the shifting market. Number two, no clear vision. You must have a written vision of where you want to be, not only in your business, but in your finances, in your relationships, in your physical body. This has to be a written three year vision. So on the other side of this shift, I think it's going to be a two to three year process to get through the economic issues that we have. Not, not that I think it's doom and gloom for real estate. I think that buyers and sellers are just going to be kind of freaking out a little bit and the market's going to be challenging in some respects as inflation and interest rates and all of that sort of settles out. And also our political environment here in the US is a little wonky. So having a clear vision is the thing that allows you to do the work necessary on a day to day basis so you'll actually achieve. While other agents are insecure and not doing the right activities. It all starts with a clear vision. So your daily activities, unless you attach them to a long term vision for that area of your life or that area of your business, it's not likely you're going to do those things today. I need to work out. I need to get a workout in after this video before I start my calls for the day. And I'm doing that workout not because I love working out necessarily. I'm doing it because I have a vision for where I want my physical body to be and the energy and vitality that I need to bring to this business. To serve you, our members. That's why I do those things, right? It's the vision I have for that area of my life because it's important to me and it matters. Three is no plan of attack, right? You get this vision of where you want things to be in the future and you don't have an actual plan and you don't break it down into a one year plan, you know, maybe 90 days, maybe weekly. And the things you do daily, I just mentioned it, if you don't have a vision, you won't know what to work on today. And so having that plan of attack and saying, okay, in three years, I want to quadruple my real estate business. I want to go from 10 million to 40 million. I want to have, you know, one buyer agent, one administrator. I want to do only do listings, you know, I want to work 40 hours a week. Whatever your vision is for your business, you've got to chunk it down into what has to happen the first year of that three year vision in my business so that I can be successful. And even then you need to chunk it down what has to happen in the first 90 days of that first year of that three year vision in this specific area, my business, right? And we need to do that for all the areas of life that matter to us. Our physical bodies, our relationships, our finances. Let's say you're in a negative net worth position right now, or you don't have any residual income, or you're not where you want to be financially. Three year vision is that you're going to have this amount of net worth, this amount of residual income, these debts paid off and then you chunk it down. What has to happen in the first year, the first 90 days this week and today, right? We call it our 3190137, right? Three year vision, one year plan, 90 day world, 13 weeks and a quarter, seven days in a week. So we attach what we do today ultimately to this three year vision. Number four is lack of energy. So not taking care of your physical body. This is where most agents fail, right? We're busy. We rationalize that I'm going to get some fast food or I'm going to skip a workout or I'm not going to get my water in because I don't want to pee all day. We have all these rationalizations that take us away from taking care of our physical bodies and that's not going to lead you any closer to meaningful goals in the areas of life that matter to you. So we talk about the Three year vision and then breaking it down into a plan. If you don't take care of your physical body and it's pretty easy, it's getting enough sleep, seven, hopefully seven and a half plus hours. It's drinking enough water, two liters minimum, four liters. If you're working out, it is moving your physical body. So getting workouts in two strength training workouts a week, two aerobic workouts a week, and then it is eating the right foods, right? And then there's other things you can do. But those are like kind of the four things that you must do if you're going to have the energy to show up and, you know, produce at a high level in all the areas of life. Most agents barely have enough energy to crawl out of bed. They're right on email, they don't have a schedule. They're not really taking the time to invest in their physical body. And these are the things that are not urgent but critically important. If you've ever heard of the 4D time system, it's the Eisenhower matrix where essentially there's urgent and important. And oftentimes the urgent things that are not that important take up most of our time working out, meal prepping. Those things, you don't have to do them. They're not actually urgent, but they're critically important. If you want to crush your goals and crush this shifting market, 5 is wasting time on social media, the news, Netflix. I am not preaching at you. I struggle with this one big time. Actually just got a new cell phone with hardly any apps on it so that I can get out of social media in terms of news and Netflix. I actually used to hang this big photo here or this painting here on top of my TV in our bedroom. I would hang it up on Sunday, I would take it down on Friday. I would only watch TV for maybe three or four hours on Fridays and Saturdays. So there are things that you can do to eliminate these distractions, but you have to be honest with yourself. How much time are you spending? In what we call media, we actually have our members do time studies where they actually document where they're spending their time in 15 minute increments over a two week period from the moment they wake up until they go to bed. It's not an easy exercise, but it is life changing. So if you're not willing to do a time study, if you are, you can reach out to me on Facebook Messenger. I'll literally send you our productivity pack, which includes our ideal week, our passion versus paid delegate to elevate Exercise and our time study, just message me on Facebook messenger and I'll send that out to you. But if you're not willing to do that, you just got to be honest with yourself. How much time am I actually spending on these things that aren't moving me closer to the meaningful goals I've set for myself in the areas of life that I say matter to me? If you say these things matter and you're not spending the time in those areas, like for me, being a good dad, being a good husband, spending time with God, working out, taking care of my physical body. If I say those things are important to me, but I don't spend time doing them on a regular basis, and I'm spending time in social media, news and on Netflix, there's a total incongruency there and you have to check yourself on that. So this is a big one. Number six is, man, we focus on low dollar productive activities. It's a big issue. If you look at where you're spending your time. 90% of where we spend our time is doing administrative work. It's things that others could do for a whole lot less money than we want to be making. A simple exercise you can do is just to simply calculate your business freedom Index. It's the amount of money you're making per unit of time. So let's say you made $250,000 last year and you work 50 hours a week times 50 weeks, two weeks vacation. So 50 hours a week, 50 weeks is 2,500 hours a year. So $250,000 take home divided by 2,500 hours is $100 per hour. That's your business Freedom Index. If you wanted to increase that from 100. Or let's say you want to increase your take home from 250 to 500 and you want to reduce your hours from 50 hours a week to 40 hours a week. That math is pretty simple. It's 500,000. So doubling your income divided by 2000 hours is $250 per hour. So if you're working 50 hours a week and you're making $100 per hour, there are a whole bunch of things you're doing that are less than $50 per hour, which you can build the system and get someone else to run the system, whether a offshore virtual assistant, or a local assistant, or admin or operations person. Most of what we do in our real estate businesses, not that they're not critically important tasks, they're just not highly paid tasks. So running signs around, you know, town Picking up checks, you know, visiting with inspectors, doing walkthrough of properties, showing homes, entering listings into MLS lockboxes, taking photos, designing brochures. They have to get done, but they're administrative in nature. So if you want to make a crazy amount of money and achieve true time freedom and reduce your stress in your real estate business, you have to make sure you stop doing low dollar productive activities. Here's the thing. Most agents, most team leaders will not thrive in this shift storm that we're going through. That's just the reality of what's going to happen. Most of the fear, uncertainty and doubt will get the best of most licensed agents. Our roster is set to go down by about 30 or 40% of agents that have a license right now will not have a license 24 to 30 months from now. Those are the estimates. So you need to make a decision which side you're going to be on. Are you going to double, triple, quadruple your business while working less hours, while having more freedom in terms of lack of stress and all the good things that come with building a business that's sustainable on sound systems? Right? That is what I'm after with creating these videos with Real Estate B School. If there's ever a way that we can work together, please make sure you reach out and I hope you enjoyed today's video. Make sure you pick up a free copy of my book Scale or die. Go to ScaleOrDieBook.com that ScaleOrDieBook.com and would you please pretty please share this episode with someone who's struggling right now, Someone that wants to build a bigger business, but maybe they don't have the roadmap to figure it out. Maybe they haven't been introduced to Real Estate B School and what we do to help agents thrive in chaos, thrive in a shifting market. We'll see you soon.