Every time I talk to someone about my business and career, it always comes up that “they’ve thought about engaging in real estate” or know someone who has. With so many people considering getting into real estate, and getting into property – why aren’t there more successful Realtors on the planet? Well, there’s only so much business to go around, so there can only just be so many Real Estate Agents in the world. I feel, however, that the inherent nature of the business enterprise, and how different it is from traditional careers, helps it be difficult for the average person to successfully make the transition in to the Real Estate Business. As a brokerage, I see many new agents make their way into my office – for an interview, and sometimes to begin their careers. New Real Estate Agents bring plenty of great qualities to the table – lots of energy and ambition – however they also make a large amount of common mistakes. Here are the 7 top mistakes rookie Real Estate Agents Make.
1) No Business Plan or Business Strategy
So many new agents put all their emphasis on which PROPERTY Brokerage they’ll join when their shiny new license will come in the mail. Why? Because most new Real Estate Agents have never been in business for themselves – they’ve only worked as employees. They, mistakenly, believe that getting into the true Estate business is “getting a new job.” What they’re missing is that they are about to go into business for themselves. If you’ve ever opened the doors to ANY business, you understand that one of many key ingredients is your business plan. Your business plan can help you define where you’re going, how you’re getting there, and what it’s going to take for you yourself to make your real estate industry a success. Here are the requirements of any good business plan:
A) Goals – What do you want? Make them clear, concise, measurable, and achievable.
B) Services You Provide – you don’t want to be the “jack of all trades & master of none” – choose residential or commercial, buyers/sellers/renters, and what area(s) you want to specialize in. New residential realtors tend to have probably the most success with buyers/renters and then move on to listing homes after they’ve completed several transactions.
C) Market – that are you marketing yourself to?
D) Budget – consider yourself “new agent, inc.” and jot down EVERY expense which you have – gas, groceries, cellular phone, etc… Then write down the brand new expenses you’re taking on – board dues, increased gas, increased cell usage, marketing (essential), etc…
E) Funding – how will you pay for your budget w/ no income for the first (at the very least) 60 days? With the goals you’ve set for yourself, when do you want to break even?
F) Marketing Plan – how are you going to obtain the word out about your services? The simplest way to market yourself is to your own sphere of influence (people you know). Make sure you do so effectively and systematically.
2) Not Using the Best Possible Closing Team
They say the greatest businesspeople surround themselves with people that are smarter than themselves. It takes a fairly big team to close a transaction – Buyer’s Agent, Listing Agent, Lender, INSURANCE PROFESSIONAL, Title Officer, Inspector, Appraiser, and sometimes more! As a Real Estate Agent, you are in the position to refer your client to whoever you choose, and you should make sure that anyone you refer in will be an asset to the transaction, not a person who provides you more headache. And the closing team you refer in, or “put your name to,” are there to make you shine! When they perform well, you can participate of the credit as you referred them into the transaction.
The deadliest duo out there is the New AGENT & New LARGE FINANCIAL COMPANY. They get together and decide that, through their combined marketing efforts, they are able to take over the world! They’re both focusing on the right section of their business – marketing – but they’re doing one another no favors by choosing to give each other business. In the event that you refer in a bad insurance professional, it might cause a minor hiccup in the transaction – you make a simple phone call and a fresh agent can bind the house in less than one hour. However, because it normally takes at least two weeks to close a loan, if you use an inexperienced lender, the effect can be disastrous! You might find yourself ready of “begging for a contract extension,” or worse, being denied a contract extension.
An excellent closing team will typically learn than their role in the transaction. Due to this, you can turn in their mind with questions, and they will step in (quietly) when they see a potential mistake – since they want to assist you to, and in exchange receive more of one’s business. Using good, experienced players for the closing team will help you infinitely in conducting business worth MORE business…and on top of that, it’s free!
3) Not Arming Themselves with the Necessary Tools
Getting started as a Real Estate Agent is expensive. In Texas, the license alone can be an investment that may cost between $700 and $900 (not taking into account how much time you’ll invest.) However, you’ll run into even more expenses when you go to arm yourself with the required tools of the trade. And do not fool yourself – they’re necessary – because your competitors are using every tool to greatly help THEM.
A) MLS Access is probably the most expensive necessity you’re going to run into. Joining your local (and state & national, automagically) Board of Realtors will help you to purchase MLS access, and in Austin, Texas, will run around $1000. However, don’t skimp in this area. Getting MLS access is one of the most important things you can do. It’s what differentiates us from your average salesman – we don’t sell homes, we present the homes that we supply. With MLS Access, you should have 99% of the virginia homes in your area open to present to your clients.
B) CELLULAR PHONE w/ a Beefy Plan – These days, everyone has a cellular phone. But not everyone has a plan that will facilitate the amount of use that Real Estate Agents need. Plan on getting at the very least 2000 minutes per month. You need, and need, to be available to your clients 24/7 – not only nights and weekends.