Every time I speak to someone about my business and career, it always comes up that “they’ve thought about getting into real estate” or know anyone who has. With so many people considering getting into property, and getting into property – why aren’t there more successful Realtors on earth? Well, there’s only so much business to go around, so there can only be so many REALTORS in the world. Personally i think, however, that the inherent nature of the business enterprise, and how different it really 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 many great qualities to the table – lots of energy and ambition – but they also make a large amount of common mistakes. Here are the 7 top mistakes rookie REALTORS Make.
1) No Business Plan or Business Strategy
So many new agents put almost 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 “obtaining a new job.” What they’re missing is that they are about to go into business for themselves. If you have ever opened the doors to ANY business, you understand that among the key ingredients can be your business plan. Your business plan helps you define where you’re going, how you’re getting there, and what it’s going to take for you to make your real estate business a success. Here are the essentials of any good business plan:
A) Goals – What would you like? Make sure they are clear, concise, measurable, and achievable.
B) Services You Provide – you don’t wish to be the “jack of all trades & master of none” – choose residential or commercial, buyers/sellers/renters, and what area(s) you need to specialize in. New residential real estate agents tend to have the most success with buyers/renters and move on to listing homes after they’ve completed several transactions.
C) Market – that are you marketing yourself to?
D) Budget – consider yourself “new real estate agent, inc.” and jot down EVERY expense you have – gas, groceries, cell phone, etc… Then write down the brand new expenses you’re dealing with – board dues, increased gas, increased cell usage, marketing (essential), etc…
E) Funding – how are you going to pay for your budget w/ no income for the initial (at the very least) 60 days? With the goals you’ve set on your own, when will you break even?
F) Marketing Plan – how are you going to get 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 best businesspeople surround themselves with people that are smarter than themselves. It requires a fairly big team to close a transaction – Buyer’s Agent, Listing Agent, Lender, Insurance Agent, 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 someone who provides you more headache. And the closing team you refer in, or “put your name to,” is there to make you shine! If they perform well, you can take part of the credit because you referred them in to the transaction.
The deadliest duo out there is the New Real Estate Agent & New LARGE FINANCIAL COMPANY. They get together and decide that, through their combined marketing efforts, they are able to take over the planet! 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 agent, it might cause a minor hiccup in the transaction – you create a simple phone call and a fresh agent can bind the house in less than an hour. However, because it typically takes at least fourteen days to close a loan, if you are using 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.
A good closing team will typically know more than their role in the transaction. Because of this, you can turn in their mind with questions, and they will step in (quietly) if they visit a potential mistake – since they want to help you, and in exchange receive more of one’s business. Using good, experienced players for the closing team will let you infinitely in conducting business worthy of 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 will cost between $700 and $900 (not taking into account the number of time you’ll invest.) However, you’ll come across even more expenses when you attend arm yourself with the required tools of the trade. And do not fool yourself – they’re necessary – because your competition are using every tool to help THEM.
A) MLS Access is just about the most expensive necessity you’re going to run into. Joining your neighborhood (and state & national, automagically) Board of Realtors will help you to pay for MLS access, and in Austin, Texas, will run around $1000. However, don’t skimp in this area. Getting realtors Bucks County PA is among 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 have available. With MLS Access, you should have 99% of the virginia homes in your area available to present to your clients.
B) Mobile Phone w/ a Beefy Plan – These days, everyone has a cell phone. But not everyone has a plan that will facilitate the amount of use that Real Estate Agents need. Plan on getting at least 2000 minutes per month. You want, and need, to be available to your clients 24/7 – not just nights and weekends.