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 someone who has. With so many people considering getting into property, and getting into real estate – why aren’t there more successful Realtors on the globe? Well, there’s only so much business to go around, 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 person to successfully make the transition into 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 plenty 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 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 REALTORS have never been in business for themselves – they’ve only worked as employees. They, mistakenly, believe that getting into the Real Estate business is “obtaining a new job.” What they’re missing is that they’re about to get into business for themselves. If you’ve ever opened the doors to ANY business, you know that one of the key ingredients can be your business plan. Your organization plan can help 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 requirements of worthwhile business plan:
A) Goals – What would you like? Make them clear, concise, measurable, and achievable.
B) Services You Provide – you do not 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 several transactions.
C) Market – that are you marketing yourself to?
D) Budget – consider yourself “new agent, inc.” and write down EVERY expense you have – gas, groceries, cellular phone, etc… Then write down the brand 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 least) 60 days? With the goals you’ve set for yourself, when do you want to break even?
F) Marketing Plan – how are you going to obtain the word out about your services? The MOST effective way to market yourself would be to your personal 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 best businesspeople surround themselves with people who are smarter than themselves. It requires a pretty 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 choose, and you should guarantee that anyone you refer in will undoubtedly be a secured 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 can participate of the credit because you referred them into the transaction.
The deadliest duo on the market is the New AGENT & New LARGE FINANCIAL COMPANY. They get together and decide that, through their combined marketing efforts, they are able to take over the world! They’re both focusing on the right part of their business – marketing – but they’re doing each other no favors by choosing to provide 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 fresh agent can bind the house in less than one hour. However, because it normally takes at least fourteen days 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 learn than their role in the transaction. For this reason, you can turn to them 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 the closing team can help you infinitely in conducting business worthy of 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 which will cost between $700 and $900 (not taking into account the number of 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 yoursite.com – they are necessary – because your competitors are definitely using every tool to greatly help THEM.
A) MLS Access is just about the most expensive necessity you are 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 of this type. Getting MLS access is one of 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 have available. With MLS Access, you should have 99% of the virginia homes in your area open to present to your clients.
B) Mobile 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 Real Estate Agents need. Plan on getting at least 2000 minutes per month. You want, and need, to be available to your clients 24/7 – not only nights and weekends.