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 anyone who has. With so many people considering 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 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 enterprise, and how different it really is from traditional careers, helps it be difficult for the average person to successfully make the transition into the Real Estate Business. As cheap houses for sale , I see many new agents make their way into my office – for an interview, and sometimes to begin with their careers. New REALTORS bring lots of great qualities to the table – lots of energy and ambition – but 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 almost 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 Real Estate business is “obtaining a new job.” What they’re missing is that they’re about to get into business for themselves. If you have ever opened the doors to ANY business, you understand that one of many 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 to make your real estate industry a success. Here are the essentials of any good business plan:
A) Goals – What would you like? Make sure they are 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 need 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 agent, inc.” and write 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 (very important), etc…
E) Funding – how are you going to pay for your allowance w/ no income for the initial (at the very least) 60 days? With the goals you’ve set on your own, when will you break even?
F) Marketing Plan – how will you obtain the word out about your services? The MOST effective way to market yourself is to your own 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 that 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 a Real Estate Agent, you are in the position to refer your client to whoever you choose, and you should be sure that anyone you refer in will 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! If 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 AGENT & New Mortgage Broker. They get together and decide that, through their combined marketing efforts, they are able to take over the planet! They’re both focusing on the right section 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 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 normally takes at least fourteen days to close a loan, if you are using 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.
A good 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 – because they want to assist you to, and in exchange receive more of your business. Using good, experienced players for the closing team will let you infinitely in conducting business worthy of MORE business…and best of all, 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 considering the amount 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 do not fool yourself – they are necessary – because your competitors are using every tool to greatly 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 of this type. 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 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 least 2000 minutes per month. You need, and need, to be accessible to your clients 24/7 – not just nights and weekends.