Here’s a stat that should stop every new agent in their tracks: 75% of real estate agents leave the business within their first year. By year three, that number climbs to 87%.
That’s not because real estate is impossible. It’s because most new agents make the same avoidable mistakes — and nobody warns them until it’s too late.
I’m Sarah Olson, a broker associate and team leader in Northeast Florida with over 25 years in real estate. I’ve mentored dozens of agents, and the ones who follow a clear plan typically close around 17 homes in their first year. The ones who don’t? They usually flame out before they ever get traction.
After years of watching talented people struggle unnecessarily, I started tracking the patterns. These are the five biggest mistakes I see — and exactly how to avoid each one.
Mistake #1: Choosing a Brokerage Based on Commission Split Alone
This is the most common mistake I see, and it happens before agents even hang their license. You get offered an 80/20 split at one brokerage and a 70/30 at another, and the decision feels obvious. More money in your pocket, right?
Not necessarily. In your first year, a higher split at a brokerage with no training, no mentorship, and no support is actually more expensive — because you’ll spend months making mistakes that a good mentor would have caught in a week.
What to look for instead:
- Structured training for new agents — not just a YouTube playlist, but a real curriculum with accountability
- A mentor or team lead who actively guides you through your first transactions
- Culture and support — do the agents there actually help each other, or is it every person for themselves?
- Technology and tools included in your fees — CRM, marketing resources, transaction management
Before you sign with anyone, interview the brokerage the way you’d interview for a job. I created a free Brokerage Interview Questions guide with the exact questions to ask so you don’t end up somewhere that leaves you stranded.
Mistake #2: Not Understanding the Real Cost of Being a Real Estate Agent
Most people get into real estate thinking about how much money they’ll make. Very few think about how much it costs. And that gap is where a lot of first-year agents get blindsided.
Real estate is an entrepreneurial career. You’re a 1099 independent contractor, not a W-2 employee. That means you’re responsible for:
- MLS dues, association fees, and licensing costs
- Errors & Omissions (E&O) insurance — typically $400–$2,500/year depending on your brokerage setup
- Marketing costs (business cards, signs, online advertising)
- Technology subscriptions (CRM, email marketing, website)
- Taxes — nobody is withholding for you. Plan to set aside 25–30% of every commission check.
- Gas, mileage, and showing expenses
The fix: Before you spend a dollar on marketing, sit down and build a realistic budget. Open a separate business bank account. Track every expense. Know your break-even number — how many deals you need to close just to cover your costs. This isn’t glamorous work, but it’s the work that keeps you in the game while other agents are wondering where their money went.
Mistake #3: Relying on One Lead Source (Usually Just Friends and Family)
Your sphere of influence matters — a lot. But if your entire business plan is “I’ll just tell my friends and family I sell real estate now,” you’re going to hit a wall fast.
The agents I mentor who build sustainable businesses do it by developing multiple lead sources from the start. I teach a framework called the O.C.T.O.P.U.S. Method — think of your database like an octopus with eight tentacles, each one reaching into a different source of business:
- O – Open Houses: Meet buyers and neighbors face-to-face. One of the fastest ways to generate leads as a new agent.
- C – Community Involvement: Volunteer, join your local chamber, get visible. People work with agents they know and see.
- T – Trusted Vendors: Build partnerships with lenders, inspectors, title companies, and contractors. These become two-way referral relationships.
- O – Online Presence: Social media, online reviews, and a professional website. Your digital footprint is often the first impression.
- P – Past Clients & Contacts: Even if you’re brand new, stay connected to everyone you’ve ever helped. Every relationship counts.
- U – Unique Niches: First-time buyers, military relocations, investors — find a specialty that fits your background and interests.
- S – Sphere of Influence: Family, friends, neighbors, former coworkers. Your warmest leads — but not your only ones.
The goal is to build a Top 100 Referral Network — a curated list of people who know, like, and trust you enough to refer business your way. Start with your Top 50 and expand from there. Each person in your network knows an average of four people making a move this year. Do the math — that’s a pipeline.
Mistake #4: Spending Money on Tools and Subscriptions You Don’t Need Yet
I see this constantly: a brand-new agent signs up for Zillow Premier Agent at $500/month, buys a professional website package, subscribes to three different marketing platforms, and orders custom yard signs — all before they’ve had a single conversation with a potential client.
Here’s the truth: in your first 90 days, your most powerful marketing tool is your phone and your voice. Conversations generate leads. Subscriptions don’t.
What you actually need on day one:
- A CRM (your brokerage may provide one free)
- Professional business cards and a headshot
- A basic social media presence on one or two platforms
- A simple database — even an Excel spreadsheet works to start
Everything else can wait. Add tools as your business demands them, not because a sales rep made them sound essential. Your brokerage likely includes technology you haven’t even explored yet. Use what you have before buying what you don’t need.
Mistake #5: Operating Without a Business Plan or Realistic Goals
This is the mistake that ties all the others together. Without a plan, you’re just busy. You’re showing up, doing things, maybe even working hard — but you don’t have a clear measure of whether any of it is actually working.
A real business plan doesn’t have to be 30 pages long. But it does need to answer a few critical questions:
- How much do I need to earn this year? (After taxes, expenses, and your cost of living)
- How many transactions does that require? (Based on your local average sale price and commission split)
- What does my weekly schedule look like? (When am I prospecting? When am I following up? When am I learning?)
- Where are my leads coming from? (Hint: use the O.C.T.O.P.U.S. Method above)
- What does my 60-day launch plan look like? (Week by week, what am I doing and who am I reaching out to?)
When you work backward from a real income goal using real market data, the path gets much clearer. You stop guessing and start executing. That’s the difference between agents who survive year one and agents who don’t.
The Pattern Behind All Five Mistakes
If you look at these five mistakes together, there’s one common thread: lack of structure. New agents don’t fail because they’re not talented or driven. They fail because nobody gave them a system. Real estate school teaches you how to pass an exam, not how to run a business.
That’s exactly why I created the Real Estate Agent Success Academy. My Business Accelerator is a hands-on, small-group workshop (capped at 15 agents) where we build your business plan, set up your financial systems, map out your lead sources, and create a 60-day launch plan you can actually follow. You walk out with a complete business-in-a-box — not just ideas, but the actual templates, scripts, and checklists to execute on them.
Your Next Step
If you’re reading this and thinking, “Okay, I’ve already made one (or more) of these mistakes,” — you’re not behind. You’re aware. And awareness is where the turnaround starts.
Here’s what I’d recommend:
1. Register for my live New Agent Training. It goes deeper on everything in this article and gives you a chance to ask me questions directly. It’s live, it’s interactive, and it’s the best place to start if you’re still figuring out your next move.
2. Download the free Brokerage Interview Questions guide. Whether you’re choosing your first brokerage or evaluating whether you’re at the right one, this resource will save you from making Mistake #1.
3. Check out the Business Accelerator. If you want the full roadmap — business plan, financial setup, lead generation strategy, scripts, templates, and a 1:1 mentoring session — this is where everything comes together.
Your first deal is closer than you think. You just need the right plan to get there.
About the Author
Sarah Olson is a broker associate, team leader, and founder of the Real Estate Agent Success Academy. With 25+ years in real estate and a track record of mentoring new agents to their first closings, she’s on a mission to help every agent build a business that lasts — from day one to deal done. Learn more about Sarah.