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 someone who has. With so many people considering getting into real estate, and getting into property – why aren’t there more lucrative Realtors on the globe? Well, there’s only so much business to bypass, 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 enterprise, and how different it is from traditional careers, makes it difficult for the average indivdual 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 Real Estate Agents bring many great qualities to the table – plenty of energy and ambition – but they also make a lot of common mistakes. Listed below 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 PROPERTY Brokerage they’ll join when their shiny new license comes in the mail. Why? Because most new REALTORS have never experienced business for themselves – they’ve only worked as employees. They, mistakenly, believe that getting into the Real Estate business is “getting a new job.” What they’re missing is that they are about to get into business for themselves. If you’ve ever opened the doors to ANY business, you know that one of many 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 yourself to make your real estate business a success. Here are the essentials of worthwhile business plan:
A) Goals – What do you want? Make them clear, concise, measurable, and achievable.
B) Services You Provide – you do not desire to be the “jack of most trades & master of none” – choose residential or commercial, buyers/sellers/renters, and what area(s) you need 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 agent, inc.” and write down EVERY expense you have – gas, groceries, cellular phone, etc… Then write down the new expenses you’re taking on – board dues, increased gas, increased cell usage, marketing (very important), etc…
E) Funding – how will you 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 simplest way to market yourself would be to your personal sphere of influence (people you know). Make sure you achieve this effectively and systematically.
2) Not Using the Best Possible 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 positioning to refer your client to whoever you choose, and you should make certain that anyone you refer in will be a secured asset to the transaction, not a person 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 on the market is the New Real Estate Agent & New Mortgage Broker. Realtor They gather and decide that, through their combined marketing efforts, they are able to take over the planet! They’re both focusing on the right part of their business – marketing – but they’re doing one another no favors by choosing to give each other business. If you refer in a bad insurance professional, it might result in a minor hiccup in the transaction – you make a simple phone call and a new 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 are using 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 know more than their role in the transaction. Due to this, you can turn to them with questions, and they’ll step in (quietly) when they see a potential mistake – since they want to help you, and in return receive more of one’s business. Using good, experienced players for your closing team will allow you to 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 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 necessary tools of the trade. And do not fool yourself – they are necessary – because your competitors are definitely using every tool to greatly help THEM.