Every time I speak to someone about my business and career, it always comes up that “they’ve thought about getting into property” or know anyone who has. With so many people thinking about getting into real estate, and getting into property – 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 REALTORS in the world. Personally i think, however, that the inherent nature of the business, and how different it is from traditional careers, helps it be difficult for the average person to successfully make the transition in to 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 lots of 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 Real Estate Brokerage they’ll join when their shiny new license comes in the mail. Why? Because Kevin Doodney have never been in business for themselves – they’ve only worked as employees. They, mistakenly, think that getting into the true Estate business is “getting a new job.” What they’re missing is that they’re about to go into business for themselves. If you have ever opened the doors to ANY business, you know that among the key ingredients is your business plan. Your organization plan can help you define where you’re going, how you’re 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 don’t want to be the “jack of all trades & master of none” – choose residential or commercial, buyers/sellers/renters, and what area(s) you wish to specialize in. New residential realtors tend to have 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 agent, inc.” and jot down EVERY expense which you have – gas, groceries, cellular 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 the very least) 60 days? With the goals you’ve set for yourself, when will you break even?
F) Marketing Plan – how are you going to obtain 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 achieve this effectively and systematically.
2) Not Using the Best Possible Closing Team
They say the greatest 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 sure 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! When they perform well, you can take part of the credit as you referred them in to the transaction.
The deadliest duo out there is the New Real Estate Agent & New LARGE FINANCIAL COMPANY. They get together 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 one another 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 property 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 ready 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. Due to this, you can turn to them with questions, and they will step in (quietly) when they visit a potential mistake – because they want to help you, and in return receive more of your business. Using good, experienced players for your closing team will let you infinitely in conducting business worth MORE business…and best of all, 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 that may 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’re necessary – because your competitors are definitely using every tool to help THEM.
A) MLS Access is probably the most expensive necessity you are going to run into. Joining your local (and state & national, automagically) Board of Realtors will help 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 among the most important actions you can take. It’s what differentiates us from your average salesman – we don’t sell homes, we present the homes that we supply. With MLS Access, you should have 99% of the homes for sale in your area open 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 want, and need, to be accessible to your clients 24/7 – not only nights and weekends.