Every time I speak to someone about my business and career, it always arises 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 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 be so many Real Estate Agents in the world. Personally i think, however, that the inherent nature of the business enterprise, and how different it really is from traditional careers, helps it be difficult for the average indivdual 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 REALTORS bring many great qualities to the table – plenty of energy and ambition – however 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 almost 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 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’re about to get into business for themselves. If you’ve ever opened the doors to ANY business, you understand that among the key ingredients can be your business plan. Your business plan helps you define where you’re going, how you’re getting there, and what it does take for you to make your real estate industry a success. Here are the essentials of any good business plan:
A) Goals – What would you like? 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 want to specialize in. New residential real estate agents tend to have probably the most success with buyers/renters and then 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 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 dealing with – board dues, increased gas, increased cell usage, marketing (essential), etc…
E) Funding – how are you going to 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 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 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 best businesspeople surround themselves with people that are smarter than themselves. It requires a pretty 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 positioning to refer your client to whoever you select, and you should make certain that anyone you refer in will undoubtedly 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 buy a house perform well, you can take part of the credit as you referred them in to the transaction.
The deadliest duo on the market 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 world! They’re both focusing on the proper 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 professional, it might cause a minor hiccup in the transaction – you create a simple phone call and a fresh agent can bind the property in less than an 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 may find yourself in a position of “begging for a contract extension,” or worse, being denied a contract extension.
A good 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) 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 will let 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 considering the number of time you’ll invest.) However, you’ll run into even more expenses when you attend arm yourself with the required tools of the trade. And don’t 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 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 among 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 will 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 cell phone. But not everyone includes a plan that will facilitate the amount of use that REALTORS need. Plan on getting at least 2000 minutes per month. You want, and need, to be accessible to your clients 24/7 – not just nights and weekends.