Why the System Fails Agents and How M&A Can Lead the Way Forward

In nearly every professional industry, failure at the rate seen in real estate would be a scandal. Imagine if 87% of doctors or nurses left medicine within a few years. Imagine if 71% of lawyers had never successfully tried a case. Picture a retail industry where 99% of customers walked in and left without buying anything—then leadership told the clerks they just “weren’t working hard enough.” It would spark national outrage, headlines, lawsuits, regulatory hearings. But in real estate, this has become business as usual.

According to the National Association of Realtors (NAR), the failure rate for new agents is estimated at over 87% within the first five years. And in any given year, 71% of licensed agents make zero sales. Even more alarming, the average conversion rate for real estate leads sits around 1%—meaning 99 out of every 100 leads go nowhere. (Source: NAR 2023 Member Profile, Zillow Consumer Housing Trends Report, and lead conversion data across industry platforms like BoomTown, CINC, and Ylopo.)

If this were happening in healthcare, education, or even the restaurant industry, we wouldn’t tolerate it. A model producing this level of waste, inefficiency, and burnout would be overhauled immediately. In real estate, however, it’s not just tolerated—it’s defended. Coaches sell $5,000 programs teaching the same outdated grind. Brokerages encourage more cold calls, more emails, more scripts. When agents fail, they’re told they didn’t want it badly enough.

This isn’t a motivational problem. It’s a systemic one. And at REMA (Real Estate Mergers & Acquisitions), we see firsthand the collateral damage this model causes—not just for agents, but for brokerage owners, team leaders, and most importantly, the consumers caught in the middle.

The deeper issue here is that most real estate professionals are, in fact, small business owners. And like all small businesses, they require structure, clear value, and operational efficiency to survive. According to the U.S. Bureau of Labor Statistics, around 20% of small businesses fail within their first year. By year five, about 50% have closed their doors. In real estate, the attrition is even more severe, because agents are often launched into business ownership without any of the tools, training, or infrastructure required to succeed.

This is where M&A comes into play—not just as a financial strategy, but as a path to sustainability and evolution. When brokerages consolidate, systems are refined. When teams are acquired, processes are aligned and duplicated. When independent firms merge into larger organizations, they gain access to resources that would otherwise take years to build alone. The right acquisition doesn’t just benefit the buyer or the seller—it creates a better model that can actually support agents and serve clients.

Real estate is long overdue for the kind of innovation and consolidation that other industries go through as a natural part of maturing. In tech, we’ve seen platforms like Google acquire startups to innovate and stay ahead. In healthcare, we’ve watched small private practices consolidate under larger networks to offer better care. Even fast-food chains have evolved—leveraging franchising and acquisitions to create consistent customer experiences and sustainable back-end operations. Why shouldn’t real estate be the same?

And yes, there’s a consumer-side impact here too. Consumers don’t necessarily want “more agents.” They want the best agent. When people need a professional—whether it’s a physician, a financial advisor, or a real estate expert—they ask their network for the best. They aren’t looking for the cheapest or the most available. They want confidence. They want to know they’re in good hands. If that agent charges more but delivers above and beyond, the cost is rarely an issue. In fact, high-performing professionals often become some of the most in-demand.

But here's what most don’t want to say out loud: the model many brokerages and coaching programs promote does not reward excellence—it rewards volume and noise. It doesn’t incentivize clarity or innovation—it sells the illusion of success through hustle culture and performance marketing.

We often talk about “raising the bar” in real estate, but that bar is meaningless if the entire structure underneath it is broken. The current system doesn’t need small improvements. It needs a reset. And that reset doesn’t come from more motivational speeches. It comes from shifting how the industry is structured.

This is why M&A isn’t just about buying and selling businesses. It’s about reshaping the industry into something that works. Something that supports top performers, that builds real client trust, that delivers value people can see and feel. It's why REMA exists—to help brokerages create exit strategies, scale responsibly, and become part of a more sustainable future.

Consumers are already shifting. They’re smarter. They expect more. They’re drawn to streamlined services, seamless tech, and strong relationships—not disjointed experiences from under-resourced agents. And when that gap between expectation and delivery grows too wide, the market responds. Demand fades. Frustration builds. Profits decline.

Most agents, brokers, and even some industry leaders don’t realize the ship is sinking. But those who do—those who are actively consolidating, aligning, and planning for a better model—will be the ones who not only survive but lead the next phase of real estate.

The goal isn’t just more sales. It’s better businesses. And that starts with telling the truth about what’s broken—and doing the hard work to fix it.