Breaking into residential real estate as a new agent has always been difficult. According to widely published figures from the National Association of Realtors, 75 percent of real estate agents fail within the first year and 87 percent fail within five years.
This is one statistic that keeps repeating itself across the industry. It seems like every coach, trainer, and brokerage recruiter quotes it or at least knows about it.
It is noteworthy that its origin is ambiguous. Many blogs quote this number, but there is no verified data to back it up, and no one is sure where the data comes from. It has become more of an industry legend than a verifiable data point.
What is verifiable is that the post-pandemic corrections have worsened the underlying reality behind the statistics. About 49% of agents who closed their first deal in 2022 never closed a deal in 2023, according to data from real estate analytics firm Relitix.
This is a significant increase from the 37% failure rate for first-closing agents in 2021, and a stark contrast to the average first-year failure rate of 28% recorded from 2017 to 2020.
So while 87% is a number that everyone “knows” about, the actual data suggests that the odds of survival after the boom are significantly worse.
thinning the herd
NAR membership peaked at 1.6 million in October 2022 and has been declining since then. As of November 2025, there were approximately 1.49 million agents, a decrease of approximately 110,000 agents from the peak. The decline in 2023 was the first annual decline since 2012.
Layoffs are a reality, but what tells the story even more is who quits. While the percentage of NAR members with two years or less of experience has fallen to 15% from 18% a year ago, the median age has increased from 55 to 57, and agents with 16 or more years of experience now make up 46% of members.
The industry is getting older and more experienced not because of an influx of veterans, but because of an exodus of new agents. NAR Project membership is expected to decline further, to approximately 1.2 million people by 2026.
So how are new agents surviving in this depressed market?
New agents who quit and new successful agents may not be as differentiated by work ethic as the industry thinks. They are distinguished by specific skills, financial preparedness and an honest understanding of what this business has become, especially after the market correction associated with the pandemic boom.
That’s a consistent line in Inman’s conversations with six real estate professionals from around the country, ranging from a 21-year-old novice agent in San Gabriel, Calif., to a veteran broker coach who has trained hundreds of agents over the past 20 years.
Can you afford to wait for your first deal?
Justin Chau, a real estate agent with eXp Realty in the Los Angeles metropolitan area, obtained his license in March 2024, entering a depressed market where interest rates are near record highs. He got his license (which he said he still does) while living with his parents right after high school, and signed his first contract with his family in just six weeks. The financial cushion of living at home gave him something most new agents don’t have: time.
Justin Chow | eXp Realty of Greater LA
During the six to eight months of no sales, Chau managed to survive by building the system with his first salary. 20% went straight into the tax account, and one-third of the net profit went back into the business. And he always kept six months worth of safety nets in reserve.
“What helped me stay in business was my ability to create financial budgets,” Chau told Inman.
Ben Mizes, a real estate agent and president of Clever Real Estate, said such discipline is more rare than it needs to be. “It’s common for new entrants to the industry to drastically underestimate and waste their monthly expenses,” says Mizes.
MLS fees, brokerage fees, leads, marketing, and basic living expenses can cost anywhere from $2,000 to $4,000 a month, and that’s before every dollar in fees.
Most new agents take 6-9 months to close their first deal. Some people don’t close it at all. “Without the financial cushion of savings and extra income, new market entrants will leave the industry,” Mizes said.
Ben Mayzus | Smart Real Estate
Ran Biderman, a strategic coaching advisor with Real Estate Bees, who has been in the industry since 1998 and has trained hundreds of agents across the United States, says his monthly burn numbers are even higher. He estimates that agents spend between $3,000 and $5,000 a month to close their first deal.
“Agents who made it through the first year almost always had enough savings to not panic, or had someone to support them financially for the first few years,” he says.
4 skills that separate new and long-lasting agents
The financial situation is only half the story. The other half is skills, but the 2020-2022 market masked just how much of a shortage IT agents really are. When inventory was low and buyers were desperate, new agents were able to close deals even when they weren’t particularly available. Those days are over.
Ran Biderman Real Estate Bee
“The market was doing most of the work, so agents were closing deals without any real skills,” Biderman told Inman. “Right now, the market demands competency, and many agents don’t have it.”
Biderman divides the agents who survive into four skill categories. The first is telephone handling skills. Not only are you comfortable on the phone, you know how to start a conversation, handle objections in the first 30 seconds, and move toward an appointment.
“Most new agents avoid this,” he says. “They spend their time on Instagram, their website, their CRM, anything that makes them feel productive and avoid rejection. Agents who understand early on that the phone is still the fastest path to income rely on the phone.”
The second step is to list appointment skills. Buyers tolerate new agents, but many sellers do not. If you can’t commit to going public, stick to your price, deal with the “we want to go higher” conversation and walk away with a signed contract, you’re going to have a hard time, Biderman said.
“These are agents who will take this seriously until the very end,” he said. “They practice, role-play, review commitments, and spend time honing.”
The third is the discipline of lead generation. Rather than forcing it when things are slow, it’s the norm every day, regardless of mood or market conditions. “Agents who survive have clear numbers that they hit every day,” he said. “Conversation, follow-up, support.”
The fourth issue is how to respond to objections. Sellers want to pay high prices, buyers are hesitant, and prospects say they have friends in the industry. “Agents who don’t learn how to overcome that don’t last long,” Biderman says. “They accept the first ‘no’ and move on until there’s no one left to talk to.”
treat it like a system
Alex Wright, who got his license in Bozeman, Montana, and led the pandemic market to its peak in 2019, watched the pattern unfold in real time. Mr. Wright is currently a licensed real estate agent with 307 Real Estate in Cody, Wyoming.
Alex Wright 307 Real Estate
It took about nine months for Mr. Wright to secure his first contract. “During that period, I definitely considered quitting, but I also knew the schedule wasn’t unusual to begin with,” he told Inman.
Once the first deal was made, things quickly turned around for him. He said being in Bozeman during that time made a big difference. The market was very active and he ended up being one of his brokerage’s top monthly performers at various times.
“A lot of new agents came in during that time expecting it to be easier than it is now,” he told Inman. “When things are moving quickly, you can get away with a lot of things. If the market cools down a little bit, you might see people start to fall.”
What sustained Wright when the market cooled wasn’t cold calls or door-knocking, neither of which worked particularly well for him, but several consistent and repeatable sources of business.
He came into the office every Monday morning and was assigned to lead on weekends when no one else was there. Those four hours a week led to five to seven deals a year.
“Most people didn’t want that change, but it was one of the best things for me,” Wright said.
He also landed some deals through people he met at the gym, received referrals from semi-retired agents, and worked with top producers who referred clients who didn’t have the time. If he could close them, it worked out for both of them.
Mr Wright said monthly costs were fairly low, mainly consisting of brokerage fees and license fees. “I lived in a duplex that I owned and the other party covered the mortgage, so it was easy for me to continue living there during the economic downturn,” he said.
The biggest difference Wright noticed was that many new agents “don’t treat it as a system.” “They weren’t tracking what they were doing and what was actually working,” he says. “They will try something for a short period of time, see no results, and move on to the next step.”
He says those who stick to the policy typically have some consistent source of trade, and have been doing so long enough for it to become complicated.
The runway is shorter than before.
In New York City, the economy is being compressed from another direction. Corey Cohen, president of Compass’ Roebling team in Manhattan, said the portal-driven model that served as a training ground for new agents has effectively collapsed.
Corey Cohen Compass’ Roebling Team
“I ask every new agent the same question: If StreetEasy closed tomorrow, would you still have business?” Cohen told Inman.
Six years ago, he said the question didn’t matter. The portal lead was the entrance. Cohen said agents can make a living working for StreetEasy or Zillow, taking on first-time buyers, learning skills and gaining experience. That road is no longer there.
Cohen said that in New York, StreetEasy currently charges referral fees as high as 35%. “When you combine a brokerage split with a team split, you’re going to have a young agent who signs a $1 million contract and walks away with enough money to buy a sandwich,” Cohen said.
Cohen said agents need first-party lead generation, including their own relationships, content and direct contact networks.
“My job as a team leader is to give new agents real-world experience with my deals and help them develop first-party opportunities,” Cohen said. “But it takes more than a year to mature, and economic conditions don’t give people as much runway as they used to.”
Mizes, who has seen a wave of agents enter and exit the market since the pandemic, sees the industry itself changing accordingly. “Real estate agents and teams are becoming more insightful and organized,” he said. “Gone are the days of hiring as many agents as possible. The focus is on training, a culture of accountability, and realistic expectations as the norm.”
He says those who survive the first year tend to find a niche, work on lead generation systems that go beyond referrals, and join mentors and teams rather than immediately trying to go it alone.
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