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 property, and getting into property – why aren’t there more lucrative Realtors on the planet? Well, there’s only so much business to bypass, 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, makes it difficult for the average indivdual 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 with their careers. New Real Estate Agents bring a great deal of great qualities to the table – plenty of energy and ambition – however they also make a lot 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 almost all their emphasis on which Real Estate Brokerage they will join when their shiny new license comes 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, think that getting into the Real Estate business is “getting a new job.” What they’re missing is that they’re about to go into business for themselves. If you have 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 are getting there, and what it does 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 them 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 real estate agents tend to have probably the most success with buyers/renters and 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 jot down EVERY expense you have – gas, groceries, cell phone, etc… Then write down the brand new expenses you’re taking on – board dues, increased gas, increased cell usage, marketing (very important), 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 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 that 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 choose, and you should be certain that anyone you refer in will be a secured 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 can participate of the credit as you referred them into the transaction.
The deadliest duo out there is the New Real Estate Agent & New LARGE FINANCIAL COMPANY. Godrej Crest Vashi gather 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 each other no favors by choosing to give each other business. If you refer in a bad insurance agent, it might cause a minor hiccup in the transaction – you create a simple phone call and a new agent can bind the property in less than an hour. However, because it normally takes at least two weeks to close a loan, if you use an inexperienced lender, the result can be disastrous! You might find yourself in a position 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. Due to this, you can turn in their mind with questions, and they will step in (quietly) when they see a potential mistake – because they want to help you, and in return receive more of your business. Using good, experienced players for your 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 an 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 come across even more expenses when you go to arm yourself with the required tools of the trade. And don’t fool yourself – they are 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, by default) Board of Realtors will allow 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 things you can do. It’s what differentiates us from your average salesman – we don’t sell homes, we present any of the homes that we have available. With MLS Access, you should have 99% of the homes for sale 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 has a plan that will facilitate the level of use that REALTORS 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.