Every time I speak to someone about my business and career, it always arises 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 property – why aren’t there more successful Realtors on the globe? Well, there’s only Canninghill Piers Brochure to bypass, so there can only be so many REALTORS in the world. Personally i think, however, that the inherent nature of the business enterprise, and how different it really is from traditional careers, makes it difficult for the average person 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 their careers. New REALTORS 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 all their emphasis on which Real Estate Brokerage they will join when their shiny new license will come 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 true Estate business is “getting 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 one of the 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 business a success. Here are the essentials of worthwhile 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 most trades & master of none” – choose residential or commercial, buyers/sellers/renters, and what area(s) you intend to specialize in. New residential real estate agents tend to have the most success with buyers/renters and move ahead to listing homes after they’ve completed a few transactions.
C) Market – who are you marketing yourself to?
D) Budget – consider yourself “new agent, inc.” and write down EVERY expense which 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 allowance 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 would be to your own sphere of influence (people you understand). Make sure you do so effectively and systematically.
2) Not Using the Best Possible Closing Team
They say the greatest 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 a Real Estate Agent, you are in the positioning to refer your client to whoever you choose, and you should guarantee that anyone you refer in will be a secured asset to the transaction, not a person who provides you more headache. And the closing team you refer in, or “put your name to,” are there to make you shine! If they perform well, you get to participate of the credit because you referred them into the transaction.
The deadliest duo out there is the New AGENT & New Mortgage Broker. They get together 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. In the event that 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 one hour. However, because it typically takes at least two weeks to close a loan, if you are using an inexperienced lender, the effect 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 to them with questions, and they’ll step in (quietly) if they visit a potential mistake – since 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 best of all, 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 will cost between $700 and $900 (not taking into account the quantity of time you’ll invest.) However, you’ll run into even more expenses when you attend arm yourself with the necessary tools of the trade. And do not fool yourself – they’re necessary – because your competitors are using every tool to greatly help THEM.
A) MLS Access is probably the most expensive necessity you’re going to run into. Joining your local (and state & national, by default) Board of Realtors will help you to purchase 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 own average salesman – we don’t sell homes, we present the homes that we supply. With MLS Access, you should have 99% of the homes for sale in your area available to present to your clients.
B) CELLULAR PHONE w/ a Beefy Plan – Nowadays, everyone has a cell phone. But not everyone includes 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 accessible to your clients 24/7 – not just nights and weekends.