Every time I talk to someone about my business and career, it always comes up that “they’ve thought about getting into property” or know someone who has. With so many people thinking about getting into property, and getting into property – why aren’t there more lucrative Realtors on the planet? 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 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 – but they also make a large amount of common mistakes. Here are the 7 top mistakes rookie Real Estate Agents 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 comes 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 are about to go into business for themselves. If you’ve ever opened the doors to ANY business, you understand that one of many key ingredients can be your business plan. Your business plan can help you define where you’re going, how you are getting there, and what it does take for you yourself to make your real estate industry a success. Here are the requirements 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 don’t desire 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 the most success with buyers/renters and then move ahead to listing homes after they’ve completed several transactions.
C) Market – that are you marketing yourself to?
D) Budget – consider yourself “new real estate agent, inc.” and write down EVERY expense that you have – gas, groceries, cell phone, etc… Then write down the brand new expenses you’re taking on – board dues, increased gas, increased cell usage, marketing (essential), etc…
E) Funding – how will you 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 get the word out about your services? The MOST effective way to market yourself is to your personal sphere of influence (people you understand). Make sure you do so effectively and systematically.
2) Not Using the GREATEST 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 PROFESSIONAL, 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 make certain 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,” is there to make you shine! When they perform well, you get to take part of the credit because 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 can 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 professional, it might result in a minor hiccup in the transaction – you create a simple phone call and a fresh agent can bind the property in less than one hour. However, because it normally takes at least fourteen days to close a loan, if you are using an inexperienced lender, the result can be disastrous! westwood realtor 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 know more than their role in the transaction. Because of this, you can turn in their mind with questions, and they’ll step in (quietly) if they see a potential mistake – since they want to assist you to, and in exchange receive more of one’s 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 Necessary Tools
Getting started as an agent is expensive. In Texas, the license alone is an investment that will cost between $700 and $900 (not considering the amount of time you’ll invest.) However, you’ll run into even more expenses when you go to arm yourself with the necessary tools of the trade. And don’t fool yourself – they’re necessary – because your competition are using every tool to 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 in this area. 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 supply. With MLS Access, you will have 99% of the homes for sale in your area available to present to your clients.
B) Mobile Phone w/ a Beefy Plan – These days, everyone has a cell phone. But not everyone has 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 available to your clients 24/7 – not only nights and weekends.