Every time I talk to someone about my opportunity and career, it always pops up that “they’ve thought about getting into real estate” or have an acquaintance who has. With so many people thinking about getting into real estate, and achieving into real estate – why aren’t there more lucrative Realtors in the world? Well, there’s only a great deal business to go around, there can only be so many Real Estate Agents in the world. Personally i think, however, that the inherent nature with the business, and how different it’s from traditional careers, makes it difficult for the average person to successfully make the transition in the Real Estate Business. Being a Broker, I see many new agents make their way into my office – to have an interview, and sometimes to begin their careers. New Real Estate Agents bring a lot of great qualities to the table – plenty of energy and ambition – in addition, they make a lot of common errors. Here are the 7 top mistakes rookie Real estate professionals Make.
1) No Business Plan or Business Strategy
Numerous new agents invest their emphasis on which Property Brokerage they will join when their shiny new license also comes in the mail. Why? Since the majority new Real Estate Agents haven’t been in business for themselves – they’ve only worked as employees. They, mistakenly, think that getting into the Real Estate business is “getting a new job.” What they are missing is that they’re about to go into business by themselves. If you’ve ever opened the doors to your business, you know that one of several key ingredients can be your business plan. Your business plan assists you to define where you’re heading, how you’re getting there, along with what it’s going to take for you to make your real estate business a success. Listed here are the essentials of any good business strategy:
A) Goals – Is there a problem? 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 commercial or residential, buyers/sellers/renters, and what area(s) you wish to specialize in. New residential real estate agents tend to have the most success with buyers/renters and then move on to listing homes after they’ve completed several transactions.
C) Market – who will be you marketing you to ultimately?
D) Budget – consider yourself “new real estate agent, inc.” and jot down EVERY expense that you have – gas, groceries, mobile phone, etc… Then write down the new expenses you’re taking on – 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 first (at least) Two months? 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 relating to your services? The MOST effective way to advertise yourself is to your own sphere of influence (people you’re friends with). Make sure you do so effectively and systematically.
2) Not With all the Best Possible Closing Team
It is said the greatest businesspeople surround themselves with individuals that are smarter than themselves. It will take a pretty big team to seal a transaction – Buyer’s Agent, Listing Agent, Lender, Insurance broker, Title Officer, Inspector, Appraiser, and often more! As a Agent, you are in the position to relate your client to whoever you select, and you should make sure that anyone you refer in will be an asset to the transaction, not somebody that will bring you more headache. Along with the closing team you refer in, or “put your reputation to,” is there to make you shine! After they perform well, you get to get involved of the credit simply because you referred them in the transaction.
The deadliest duo on the market is the New Realtor & New Mortgage Broker. They meet up and decide that, through their combined marketing efforts, they could take over the world! They’re both centering on the right part of their business – marketing – however they are doing each other no favors by choosing to give each other business. In case you refer in a bad insurance agent, it might cause a minor hiccup from the transaction – you’re making a simple phone call as well as a new agent can bind the house in less than an hour. However, because it typically takes at least a couple weeks to close a loan, if you are using an inexperienced lender, the actual result can be disastrous! You might find yourself in a position of “begging for the contract extension,” or worse, being denied an agreement extension.
A good closing team will typically find out than their role from the transaction. Due to this, it is possible to turn to them with questions, and they can step in (quietly) after they see a potential mistake – given that they want to help you, along with return receive much more of your business. Using good, experienced players to your closing team will help you infinitely in working worthy of MORE business…and greatest of all, it’s free!
3) Not Arming Themselves with the Necessary Tools
How to get started as a Real Estate Agent is dear. In Texas, the license alone is an investment that will cost between $700 and $900 (not taking into account the amount of time you’ll invest.) However, you’ll come upon even more expenses by visiting arm yourself with the necessary tools from the trade. And don’t fool yourself – they are necessary – when your competitors are definitely using every tool to assist them to.
A) MLS Access has become the expensive necessity you’re going to run into. Joining the local (and state & national, by default) Board of Realtors will help you to pay for MLS access, as well as 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 the average salesman – unfortunately we cannot sell homes, we present any of the homes that we have available. With MLS Access, you will possess 99% of the homes for sale locally available to present to customers.
B) Mobile Phone w/ a Beefy Plan – Currently, everyone has a cell phone. And not everyone has a plan which will facilitate the level of use that Real Estate Agents need. Plan on getting at least 2000 minutes a month. You want, and need, to be shown to your clients 24/7 – not simply nights and weekends.
C) Computer (Preferably a Laptop) – There isn’t any way around it, you must have a computer & be savvy enough to make use of email. You would be a good idea to invest in some business keeper, as well. If you’d like to save some money (and who wouldn’t) then you can definitely get the client & email store Thunderbird from http://www.mozilla.com and you can get a free office suite from http://www.openoffice.org The sole downside to these programs is because they do not sync using your PDA or Cell phone. A Laptop is a huge plus because you can actually work from home or on the move. New Real Estate Agents are often surprised by just how much time they spend From the office, and a laptop helps you stay on top of your projects while on the go.
D) Real estate property Friendly Car – You don’t need to have a Lexus, however, your Miata won’t do the trick. Just be sure you have a 4 door car or SUV that’s comfortable and presentable. Ensure that it stays clean, and for God’s sake, don’t smoke in it! You’re going to spend lots of time in your car, and hang a lot of miles on it, so if it’s fuel efficient, it’s actually a BIG plus. If you are driving a sporty convertible, or have your KILLER Jeep from college, it’s time to trade it in.
4) Not enough Proper Funding
In case you have taken the time to generate your business plan, than when they are not have your budget, on the other hand can’t stress enough the need for having and following your budget. However, the budget alone doesn’t address the key aspect of funding. 90% of small businesses fail because of lack of funding. Typically, new agents should have 3 months of reserves in savings before the leap into regular agency. However, money in the bank isn’t the best to answer the question of funding. Maybe your partner can support you for the certain period of time. You can a part-time job that won’t interfere with your business as being a Real Estate Agent. Many successful waiters make the transition to successful agents with no money in the financial institution. When you start your new business, a low-cost to earn any income for, at the least, 60 days.
5) Refusing to shell out Money on Marketing
Most new Realtors don’t realize that the most difficult part of the business is finding the business. Furthermore, they’ve just forked out around $2000 for their license and board dues, so the LAST thing they want to do is always to spend more money! Again, the situation lies in the lack of realizing that you’ve just jumped into the Real Estate Business, you’ve not taken a new job. And any good businessperson will explain that how much business you GET is directly correlative to how much you SPEND on marketing. Split into the right brokerage, then you will get some good inbound leads. However, don’t neglect a great, personal marketing campaign right away to get your own name out since the Real Estate Agent to go to.
6) Not Focusing Their Marketing Efforts within the Most Effective Areas
One good reason why many new Realtors who do begin finding cash for personal marketing stop is that they spend it in the wrong place. Easy and simple place, and where conventional Real-estate tells you to spend your money, is in conventional print marketing – the newspaper, real estate magazines, etc… Here is the most visible destination to see real estate advertising, it’s where large offices spend an excellent part of their money, so many new agents mistakenly spend their here. This becomes very frustrating to new agents because of its low return. Large brokerages have enough money to spend their money here because they’re filling two needs – they’re marketing their very own properties for sale while creating new buyer traffic for buyer’s agents. New Real Estate Agents should look to their own sphere of influence and referral marketing to determine the most effective return on their investment. An agent can spend as little as $100/month marketing to their family, friends, and colleagues and see an incredible return. There are lots of great referral systems around that every focus on the same premise – when you consistently market you to ultimately your sphere of influence as the Real Estate Agent to go to – then you will get more business. The key is to pick a system also to follow that system. You will note results.
7) Deciding on the Wrong Brokerage for your Wrong Reasons
New Realtors choose their new broker for numerous reasons – they’ve got a good reputation, they provide the most competitive split, a cubicle is close to their property, etc… While these alone aren’t bad benefits of using a broker, they aren’t planning to do a lot that may help you in your success. The #1 need to choose a broker, and the question to ask is, “What would you offer your new agents.” In the event the answer is, “The most competitive split in town” you should definitely keep looking. Remember, 100% of $0 continues to be $0. If you’re leaning on the largest broker around town, who has a great reputation, consider this: You’re starting a BUSINESS not really a JOB. While it may be fantastic to brag for your friends about landing employment at a prestigious company, it’s really no accomplishment to hang your license on a single wall in the same office as other successful agents.
Your #1 concern when interviewing new Brokers ‘s what they offer you being a new agent. Have they got incoming leads? Simply what does their training program consist of? What’s their retention level? What’s their average sales price? Can they encourage their agents in promoting themselves? A Broker’s purpose is always to help new agents start successful careers also to help established Agents progress their careers to the next level. As a new agent, concern yourself less with commission split or agency name plus more with specific programs and agency standards.
A new path in Real Estate is very exciting. Starting a Real Estate business provides the new Agent with opportunities for limitless potential and freedom. New Agents use a notoriously high failure rate, however, so a whole new Real Estate career also is a very scary prospect. However, should you avoid the 7 Top Mistakes Rookie Real Estate Agents Make, then you’ll be far prior to the competition!