Every time I talk to someone about my business and career, it always arises that “they’ve thought about engaging in property” or know someone who has. With Canninghill Piers considering getting into real estate, and getting into real estate – why aren’t there more lucrative Realtors in the world? Well, there’s only so much business to go around, so there can only be so many Real Estate Agents 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 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 their careers. New Real Estate Agents bring a lot of 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 REALTORS 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 Real Estate Agents have never experienced 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’re about to get into business for themselves. If you’ve ever opened the doors to ANY business, you understand that among the key ingredients can be 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 yourself to make your real estate industry a success. Here are the essentials of worthwhile business plan:
A) Goals – What do you want? Make sure they are clear, concise, measurable, and achievable.
B) Services You Provide – you do not wish 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 realtors tend to have probably the most success with buyers/renters and then move on to listing homes after they’ve completed several transactions.
C) Market – that 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 dealing with – board dues, increased gas, increased cell usage, marketing (very important), etc…
E) Funding – how are you going to pay for your budget 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 obtain the word out about your services? The MOST effective way to market yourself would be to your own sphere of influence (people you know). Make sure you do so 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 takes a pretty 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 choose, and you should guarantee 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,” are there to make you shine! When they perform well, you can participate of the credit as you referred them into the transaction.
The deadliest duo on the market is the New 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 agent, it might cause a minor hiccup in the transaction – you create a simple phone call and a new agent can bind the house in less than one hour. However, because it typically takes at least two weeks to close a loan, if you use an inexperienced lender, the effect can be disastrous! You might 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’ll step in (quietly) when they see a potential mistake – since they want to assist you to, and in return receive more of your business. Using good, experienced players for the 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 can be an investment that may cost between $700 and $900 (not taking into account the volume of time you’ll invest.) However, you’ll run into even more expenses when you go to arm yourself with the required tools of the trade. And do not fool yourself – they are necessary – because your competitors are using every tool to help THEM.
A) MLS Access is just about the most expensive necessity you are going to run into. Joining your neighborhood (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 of this type. 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 any of the homes that we have available. With MLS Access, you should have 99% of the homes for sale in your area available to present to your clients.
B) Mobile Phone w/ a Beefy Plan – Nowadays, everyone has a cellular phone. But not everyone has a plan that will facilitate the level of use that Real Estate Agents need. Plan on getting at least 2000 minutes per month. You want, and need, to be available to your clients 24/7 – not only nights and weekends.