Every time I talk to someone about my business and career, it always comes up that “they’ve thought about getting into real estate” or know anyone who has. With so many people thinking about getting into property, and getting into real estate – why aren’t there more successful Realtors on earth? Well, there’s only so much business to bypass, so there can only be so many REALTORS in the world. I feel, however, that the inherent nature of the business enterprise, and how different it really is from traditional careers, makes it difficult for the average indivdual to successfully make the transition in to the Real Estate Business. As how to buy a house , I see many new agents make their way into my office – for an interview, and sometimes to begin their careers. New Real Estate Agents bring many great qualities to the table – lots of energy and ambition – however they also make a large amount 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’ll join when their shiny new license comes in the mail. Why? Because most new Real Estate Agents have never experienced business for themselves – they’ve only worked as employees. They, mistakenly, think 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 the 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 business a success. Here are the essentials of any good business plan:
A) Goals – What do you want? Make sure they are clear, concise, measurable, and achievable.
B) Services You Provide – you do not desire to be the “jack of all 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 then move ahead to listing homes after they’ve completed several transactions.
C) Market – who are you marketing yourself to?
D) Budget – consider yourself “new real estate agent, inc.” and write down EVERY expense that 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 (very important), etc…
E) Funding – how will you pay for your budget w/ no income for the initial (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 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 best 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 a Real Estate Agent, you are in the positioning to refer your client to whoever you choose, and you should be sure that anyone you refer in will undoubtedly be a secured asset to the transaction, not someone who provides you more headache. And the closing team you refer in, or “put your name to,” are there to make you shine! If they perform well, you can participate of the credit as you referred them into the transaction.
The deadliest duo out there is the New AGENT & New Mortgage Broker. They get together and decide that, through their combined marketing efforts, they can take over the world! They’re both focusing on the right section of their business – marketing – but they’re doing each other no favors by choosing to give 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 new agent can bind the property in less than an 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! You may find yourself in a position of “begging for a contract extension,” or worse, being denied a contract extension.
An excellent closing team will typically learn than their role in the transaction. Because of this, you can turn in their mind with questions, and they’ll step in (quietly) when they visit a potential mistake – since they want to assist you to, and in exchange receive more of your business. Using good, experienced players for the 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 required Tools
Getting started as a Real Estate Agent is expensive. In Texas, the license alone can be an investment which will cost between $700 and $900 (not taking into account the volume of time you’ll invest.) However, you’ll come across even more expenses when you attend arm yourself with the necessary tools of the trade. And don’t fool yourself – they are necessary – because your competition 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 neighborhood (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 one of the most important things you can do. 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 virginia homes 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 amount of use that Real Estate Agents 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 just nights and weekends.