Every time I talk to someone about my business and career, it always comes up that “they’ve thought about engaging in property” or know someone who has. With so many people considering getting into property, and getting into property – why aren’t there more successful Realtors in the world? Well, there’s only so much business to go around, so there can only just be so many Real Estate Agents in the world. Personally i think, however, that the inherent nature of the business, and how different it really is from traditional careers, helps it be 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 with their careers. New REALTORS bring lots 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’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, believe that getting into the true Estate business is “obtaining a new job.” What they’re missing is that they’re about to go into business for themselves. If you’ve ever opened the doors to ANY business, you know that among 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 yourself to make your real estate business 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 want to be the “jack of all trades & master of none” – choose residential or commercial, buyers/sellers/renters, and what area(s) you would like 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 write down EVERY expense you have – gas, groceries, cellular 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 are you going to pay for your allowance w/ no income for the initial (at least) 60 days? With the goals you’ve set for yourself, when will you break even?
F) Marketing Plan – how will you obtain the word out about your services? The MOST effective way to market yourself is to your own sphere of influence (people you know). Make sure you achieve this effectively and systematically.
2) Not Using the GREATEST Closing Team
They say the greatest businesspeople surround themselves with people who are smarter than themselves. It requires a fairly big team to close a transaction – Buyer’s Agent, Listing Agent, Lender, INSURANCE PROFESSIONAL, Title Officer, Inspector, Appraiser, and sometimes more! As a Real Estate Agent, you are in the position to refer your client to whoever you select, and you should be certain that anyone you refer in will be an asset to the transaction, not someone 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 get to take part of the credit as you referred them into the transaction.
The deadliest duo out there is the New Real Estate 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 one another no favors by choosing to provide 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 fresh agent can bind the house in less than one hour. However, because it typically takes at least fourteen days to close a loan, if you use an inexperienced lender, the result can be disastrous! You might find yourself ready of “begging for a contract extension,” or worse, being denied a contract extension.
A good closing team will typically know more than their role in the transaction. Because of this, you can turn to them with questions, and they will step in (quietly) if they see a potential mistake – because they want to help you, and in exchange receive more of one’s business. Using good, experienced players for the closing team will allow you to infinitely in conducting business worth MORE business…and best of all, it’s free!
3) Not Arming Themselves with the required 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 the volume of time you’ll invest.) However, you’ll come across even more expenses when you go to arm yourself with the necessary tools of the trade. And do not fool yourself – they’re necessary – because your competition are using every tool to greatly help THEM.
A) MLS Access is just about the most expensive necessity you’re going to run into. Joining your local (and state & national, automagically) Board of Realtors will allow you to purchase MLS access, and in Austin, Texas, will run around $1000. However, don’t skimp of this type. Getting MLS access is one of the most important things you can do. It’s what differentiates us from your average salesman – we don’t sell home s, we present the homes that we have available. With MLS Access, you should have 99% of the virginia homes in your area available to present to your clients.
B) Mobile Phone w/ a Beefy Plan – These days, 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 least 2000 minutes per month. You need, and need, to be accessible to your clients 24/7 – not just nights and weekends.