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 thinking about getting into real estate, and getting into property – why aren’t there more successful Realtors on the globe? Well, there’s only so much business to bypass, so there can only 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 REALTORS bring many great qualities to the table – plenty of energy and ambition – however 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 all their emphasis on which PROPERTY 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 true Estate business is “getting 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 is your business plan. Your organization plan helps you define where you’re going, how you’re getting there, and what it’s going to take for you to make your real estate business a success. Here are the requirements of worthwhile business plan:
A) Goals – What do you want? Make them clear, concise, measurable, and achievable.
B) Services You Provide – you do not want 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 probably the most success with buyers/renters and 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 you have – gas, groceries, cellular phone, etc… Then write down best high park residences taking on – board dues, increased gas, increased cell usage, marketing (essential), etc…
E) Funding – how will you pay for your budget w/ no income for the first (at least) 60 days? With the goals you’ve set for yourself, when will you break even?
F) Marketing Plan – how will you get 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 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 Agent, 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 make certain that anyone you refer in will undoubtedly be an asset to the transaction, not someone who provides 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 participate of the credit because you referred them into the transaction.
The deadliest duo on the market is the New Real Estate 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. In the event that 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 house in less than an hour. However, because it normally takes at least two weeks to close a loan, if you use an inexperienced lender, the effect can be disastrous! You may find yourself ready 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. Due to this, you can turn in their mind with questions, and they will step in (quietly) if they visit 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 worth MORE business…and on top of that, 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 quantity 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 are necessary – because your competition are using every tool to help THEM.
A) MLS Access is probably the most expensive necessity you’re going to run into. Joining your local (and state & national, automagically) Board of Realtors will allow you to pay for MLS access, and in Austin, Texas, will run around $1000. However, don’t skimp in this area. Getting MLS access is probably the most important things you can do. It’s what differentiates us from your own average salesman – we don’t sell homes, we present any of 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 – 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 the very least 2000 minutes per month. You need, and need, to be accessible to your clients 24/7 – not just nights and weekends.