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 someone who has. With so many people considering getting into real estate, and getting into real estate – why aren’t there more successful Realtors in the world? Well, there’s only so much business to bypass, so there can only be so many Real Estate Agents in the world. I feel, 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 in to 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 their careers. New REALTORS bring plenty of great qualities to the table – lots of energy and ambition – however they also make a large amount of common mistakes. Listed below are the 7 top mistakes rookie Real Estate Agents 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 have ever opened the doors to ANY business, you understand that among the key ingredients is your business plan. Your business plan helps you define where you’re going, how you are getting there, and what it does take for you to make your real estate business a success. Here are the requirements 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 do not desire to be the “jack of most trades & master of none” – choose residential or commercial, buyers/sellers/renters, and what area(s) you need to specialize in. New residential realtors tend to have probably the most success with buyers/renters and then move ahead to listing homes after they’ve completed a few transactions.
C) Market – that are you marketing yourself to?
D) Budget – consider yourself “new agent, inc.” and jot down EVERY expense that you have – gas, groceries, cell phone, etc… Then write down the new expenses you’re dealing with – board dues, increased gas, increased cell usage, marketing (very important), 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 property developer ‘ve set for yourself, when will you 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 personal sphere of influence (people you know). Make sure you achieve this 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 takes a pretty big team to close a transaction – Buyer’s Agent, Listing Agent, Lender, Insurance Agent, Title Officer, Inspector, Appraiser, and sometimes more! As an agent, you are in the positioning to refer your client to whoever you choose, and you should make sure that anyone you refer in will undoubtedly be a secured asset to the transaction, not somebody who will bring 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 participate of the credit because you referred them in to the transaction.
The deadliest duo on the market is the New AGENT & New Mortgage Broker. They gather 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 each other no favors by choosing to give each other business. In the event that you refer in a bad insurance professional, it might result in a minor hiccup in the transaction – you create a simple phone call and a fresh agent can bind the property in less than one hour. However, because it normally takes at least fourteen days to close a loan, if you are using an inexperienced lender, the effect can be disastrous! You may find yourself in a position of “begging for a contract extension,” or worse, being denied a contract extension.
A good closing team will typically learn than their role in the transaction. Because of this, you can turn to them with questions, and they will step in (quietly) when they visit a potential mistake – because they want to assist you to, and in exchange receive more of your business. Using good, experienced players for the closing team will help you infinitely in conducting business worthy of MORE business…and best of all, it’s free!
3) Not Arming Themselves with the Necessary Tools
Getting started as an agent is expensive. In Texas, the license alone is an investment that will 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 attend arm yourself with the required tools of the trade. And do not fool yourself – they are necessary – because your competitors are definitely using every tool to help THEM.
A) MLS Access is probably the most expensive necessity you are going to run into. Joining your neighborhood (and state & national, by default) 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 MLS access is probably the most important actions you can take. It’s what differentiates us from your average salesman – we don’t sell homes, we present any of 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) Mobile Phone w/ a Beefy Plan – Nowadays, everyone has a cellular phone. But not everyone includes a plan that will facilitate the amount of use that REALTORS need. Plan on getting at the very least 2000 minutes per month. You want, and need, to be accessible to your clients 24/7 – not just nights and weekends.