Mary Beth Klatt is a freelance writer with a passion for architecture and home design.
Can You Recover From Failure?
Beth Lam lost three transactions in 36 hours — the only deals she had lined up in her first year in real estate. Somehow, she found the will to keep going.
September 1, 2015
Anyone coming into a new industry such as real estate knows there are going to be bumps in the road as you learn how to build your business from the ground up. But when it rains, it pours, and sometimes it may feel like you’re failing at everything you try to do. When you’ve reached a low point in the learning curve, will you be able to recover?
Beth Lam was able to pull through the worst moment of her first year in real estate in 2010, a series of devastating blows that every practitioner hopes never to happen to them. She lost three deals — three commission checks down the drain — in 36 hours. Those would have been her first deals after nearly a year in the business, so to watch them disappear made Lam want to quit. She had to dig deep for the confidence to move forward.
Lam, a sales associate with Long & Foster Real Estate in Ashburn, Va., switched to real estate from a career in special education. She figured that “my children were both in middle school, and I felt they were old enough to be on their own in the afternoons, evenings, and on the weekends, when I expected to be busy showing houses and writing contracts,” she says.
It seemed she had the right idea when in the fall of 2010, a couple called to inquire about a 2,400-square-foot log cabin 40 miles outside of Ashburn. “I didn’t know much about log cabins, let alone well and septic systems,” Lam says. But not to be deterred from getting her first “real clients,” she immediately set off to help them. In the process, she learned the couple needed to sell their current home as well — two potential sales she could make money from.
The couple eventually made an offer on the log cabin, and Lam was ecstatic. “After many hours of negotiations, we came to terms with the sellers of the log cabin, and I had my first client under contract,” she recalls. “Next up was to list and market their home for sale, and before too long, we had an offer on their property, too. I was on my way!”
At the same time, Lam’s broker sent her a rental lead that turned out to be a prospective buyer looking to relocate his family to Lam’s area. She spent entire days touring homes with the buyer and his family, missing her own children’s basketball and soccer games. But it seemed worth it once she found a four-bedroom, three-and-a-half bathroom tract home in a new-construction development that the buyer fell in love with. The buyer and his wife happily signed a sale contract, wrote a check for a $10,000 down payment, and began choosing custom interior finishes and appliances.
Now three deals were on track for Lam, and her hard work seemed to finally be paying off. So she thought.
Days before the relocating client’s closing, Lam received a brief e-mail from him saying he was backing out of the purchase. “He was afraid he would lose his job,” Lam says. “I wrote back and called and explained that he was going to lose his $10,000. He said that was OK; he couldn’t sleep worrying about having that mortgage hanging over his head. While I could sympathize with that, all I could think about was all the Saturdays and Sundays I had given up with my own children and how I’d never get that time back — and now didn’t even have a paycheck to make it worthwhile.”
Things got worse the next day. Lam learned that her clients eyeing the log cabin would no longer be able to buy it because the sale of their own home fell through. The buyers of their home decided to void the sale contract on the home inspection contingency. Suddenly, the two other sales Lam was holding onto slipped away.
Dumbfounded, Lam couldn’t cope with this series of losses. “I went home, and I went to bed,” she says. “I pulled up the covers and made some tea and did … nothing. I was broken. I couldn’t imagine how anyone survives this business. It’s just too damn hard. All I could see was the debt I had gotten into and that I had nothing to show for it. I had lost time — my time, time with my family.”
Still, something pulled her out of bed the following Monday morning, and though she still felt defeated, it was also a new day to try and bounce back from disaster. “I went to my broker and cried, ‘This is too hard. It takes too much of a toll,’” Lam recalls. It had been almost a year since she was licensed and she had virtually nothing to show for it except $20,000 in credit card debt and a sinking feeling that she didn’t have the skills for a real estate career. The broker and several colleagues tried to talk her out of quitting, telling her about their own failures and encouraging her not to give up.
Lam wanted her career to work, so she pressed on. She reconvened with the clients who wanted to sell their house and buy the log cabin. They put their home back on the market, and Lam hit the marketing hard with open houses and showings. The couple got another offer fairly quickly — this time without contingencies. In June 2011, after having a deal on their own home in place, her clients closed on the log cabin — and by the end of that year, Lam had closed nine transactions. She paid off her debts, and she and her husband bought a vacation home.
Sheer stubbornness kept Lam going through the difficulties. She had invested so much time in selling the log cabin that “I was determined to see it through, even if it was the one and only deal I closed,” she says. “I also really believed that I could be successful and I really wanted to be a successful agent.”
What would she tell other new agents for managing emotions during failure? Take a step back and regroup. A real estate career is a journey, she says, and “if you hit a part of the path that’s blocked, it doesn't mean the trail ends. You just back up, learn from your mistakes, and find another way to reach your goal.”
When a deal falls apart now, Lam gives herself permission to feel disappointed and discouraged but quickly moves forward and puts the past behind her. “Failure is not learning from mistakes,” she says. “If you can take something away from an experience that helps you learn and grow, then I don’t see it as a failure. It’s a leaning opportunity.”