Jose Mourinho admitted his side deserved to lose at Sevilla on Saturday, a result which leaves them eight points behind Barcelona in La Liga already.
Piotr Trochowski scored the only goal of the game after less than 70 seconds, with Real unable to break down a stubborn Andalusian defence in the remaining 89 minutes.
"From the first to the last minute we were poor,'' the Portuguese coach told Real Madrid's official website.
"We were bad in the first half and we were bad in the second half too. They really deserved the win and we deserved the loss more. Congratulations to them - we got what we deserved for how badly we played. At this time my team isn't up to scratch but I'm the coach and the responsibility is mine."
Madrid face the difficult test of Premier League champions Manchester City on Tuesday in their opening Champions League group stage fixture, with Mourinho worried by his side's performances do far this term.
"I worry about my team and the fact that since the start of the official season we have only played well in the Super Cup, a little bit against Valencia and a little bit against Granada," he said. "That is my concern rather than points. At this moment I have no team.''
Cristiano Ronaldo, who is reportedly unhappy at Real Madrid, suffered a lot of criticism after the match, but Mournho defended his fellow countryman.
The Portuguese forward refused to celebrate his two goals against Granada recently claiming he was "sad'', but has yet to give a reason for this.
"I don't think that the rumours of the last couple of weeks have anything to do with it,'' Mourinho said. "It is about a state of mind and of two or three who aren't thinking like the rest.
"They are the minds of players which are not committed and for whom football is not a priority in their lives. There aren't many involved and it's complicated, but I'm coach and if there are those less committed then it is my fault.''