Every time I talk to someone about my business and career, it always comes up that “they’ve thought about engaging in real estate” or know anyone who has. With so many people considering getting into real estate, and getting into real estate – why aren’t there more lucrative Realtors in the world? Well, there’s only so much business to bypass, so there can only just be so many REALTORS in the world. Personally i think, however, that asset appraisal 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 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 many great qualities to the table – lots of energy and ambition – but they also make a lot of common mistakes. Listed below are the 7 top mistakes rookie REALTORS Make.
1) No Business Plan or Business Strategy
So many new agents put all their emphasis on which Real Estate Brokerage they’ll join when their shiny new license comes in the mail. Why? Because most new REALTORS 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 understand that one of many key ingredients is your business plan. Your business plan can help 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 industry 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 do not wish to be the “jack of all trades & master of none” – choose residential or commercial, buyers/sellers/renters, and what area(s) you wish to specialize in. New residential realtors tend to have probably the most success with buyers/renters and move on to listing homes after they’ve completed several transactions.
C) Market – who are you marketing yourself to?
D) Budget – consider yourself “new real estate agent, inc.” and jot down EVERY expense which you have – gas, groceries, cellular 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 allowance w/ no income for the first (at 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 MOST effective way to market yourself would be to your personal sphere of influence (people you know). Make sure you do so effectively and systematically.
2) Not Using the GREATEST 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 an agent, you are in the position to refer your client to whoever you select, and you should guarantee that anyone you refer in will undoubtedly be an asset to the transaction, not a person 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 out there is the New AGENT & New LARGE FINANCIAL COMPANY. They get together and decide that, through their combined marketing efforts, they can take over the planet! They’re both focusing on the proper part of their business – marketing – but they’re doing one another no favors by choosing to give each other business. If you refer in a bad insurance agent, it might result in a minor hiccup in the transaction – you create a simple phone call and a new agent can bind the house in less than an hour. However, because it typically takes at least two weeks to close a loan, if you are using 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 learn 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 – since they want to help you, and in exchange receive more of one’s business. Using good, experienced players for your closing team will let you infinitely in conducting business worth MORE business…and on top of that, it’s free!
3) Not Arming Themselves with the required Tools
Getting started as a Real Estate Agent is expensive. In Texas, the license alone is an investment that may cost between $700 and $900 (not taking into account the volume of time you’ll invest.) However, you’ll come across even more expenses when you attend arm yourself with the necessary tools of the trade. And don’t fool yourself – they’re necessary – because your competition are definitely using every tool to greatly help THEM.
A) MLS Access is probably the most expensive necessity you are going to run into. Joining your local (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 own average salesman – we don’t sell homes, we present 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) CELLULAR PHONE w/ a Beefy Plan – Nowadays, 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 the very least 2000 minutes per month. You want, and need, to be accessible to your clients 24/7 – not only nights and weekends.