Every time I talk 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 thinking about getting into real estate, and getting into property – why aren’t there more lucrative Realtors in the world? Well, there’s only so much business to go around, so there can only be so many Real Estate Agents 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 indivdual to successfully make the transition into the Real Estate Business. As a Broker, I see many new agents make their way into my office – for an interview, and sometimes to begin with their careers. New Real Estate Agents bring a great deal of great qualities to the table – plenty 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 Real Estate Brokerage they’ll join when their shiny new license will come in the mail. Why? Because most new Real Estate Agents have never experienced business for themselves – they’ve only worked as employees. They, mistakenly, think that getting into the true Estate business is “obtaining a new job.” What they’re missing is that they are about to get into business for themselves. If you’ve ever opened the doors to ANY business, you know that one of many 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 do you want? 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 would like to specialize in. New residential realtors tend to have the most success with buyers/renters and then move on to listing homes after they’ve completed a few transactions.
C) Market – who are you marketing yourself to?
D) Budget – consider yourself “new real estate agent, inc.” and write down EVERY expense that you have – gas, groceries, cellular phone, etc… Then write down the new expenses you’re dealing with – board dues, increased gas, increased cell usage, marketing (essential), etc…
E) Funding – how will you pay for your allowance w/ no income for the initial (at least) 60 days? With the goals you’ve set for yourself, when will you break even?
F) Marketing Plan – how are you going to get the word out about your services? The MOST effective way to market yourself is to your own sphere of influence (people you understand). Make sure you achieve this effectively and systematically.
2) Not Using the GREATEST Closing Team
They say the greatest businesspeople surround themselves with people who are smarter than themselves. It takes a pretty big team to close a transaction – Buyer’s Agent, Listing Agent, Lender, INSURANCE PROFESSIONAL, Title Officer, Inspector, Appraiser, and sometimes more! As an agent, you are in the position to refer your client to whoever you select, and you should make sure that anyone you refer in will undoubtedly be an asset to the transaction, not somebody 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 get to take part of the credit because you referred them in to the transaction.
The deadliest duo out there is the New AGENT & New Mortgage Broker. sell my house as is without a realtor gather and decide that, through their combined marketing efforts, they can take over the planet! They’re both focusing on the right section of their business – marketing – but they’re doing each other 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 create a simple phone call and a new agent can bind the house in less than one hour. However, because it normally takes at least fourteen days 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 know more than their role in the transaction. For this reason, you can turn in their mind with questions, and they will step in (quietly) when they see a potential mistake – because they want to assist you to, and in return receive more of your business. Using good, experienced players for your closing team can help 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 is an investment which will cost between $700 and $900 (not taking into account how much time you’ll invest.) However, you’ll come across even more expenses when you go to arm yourself with the necessary tools of the trade. And don’t fool yourself – they’re necessary – because your competitors are definitely using every tool to help THEM.
A) MLS Access is probably the most expensive necessity you’re going to run into. Joining your neighborhood (and state & national, automagically) Board of Realtors will allow you to pay for MLS access, and in Austin, Texas, will run around $1000. However, don’t skimp of this type. Getting MLS access is among the most important actions you can take. 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 will have 99% of the homes for sale in your area available to present to your clients.
B) Mobile 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 least 2000 minutes per month. You need, and need, to be accessible to your clients 24/7 – not just nights and weekends.