When I talk with someone about my business and professional life, it usually is mentioned it's because “they've thought about getting into real estate” or have anyone who's thought about it. With so many people contemplating becoming involved in real estate and even getting into real estate, why aren't there more experienced Realtors in the world? It's because there's only so much business be had, and there will only be the number of Real Estate Agents in the world. However, I believe that the nature of the industry, and the fact that it's different from other professions can make it challenging for anyone to make the right change into it. Taipei Road Land. As a broker, I have seen many new agents make an appearance in my office for an interview, or sometimes , to start their careers. New Real Estate agents bring a many great attributes to the table, including full of enthusiasm and energy however, they commit a number of common errors. Here are the top 7 mistakes that rookie real estate agents make.
1) No Business Plan or Business Strategy
Many new agents place all their attention on the Real Estate Brokerage they'll join when their brand new license is delivered to them in the mail. Why? because the majority of new Real Estate Agents haven't been working for themselves, they've been employees. They think that entering this Real Estate business is “getting a new job.” What they're not aware of is it's about time to start a the business of their own. When you've opened doors to any company, you'll know what one of the primary factors is your business strategy. The business plan will help to define your goals to, how you'll get there and what it's going require to create your real estate business successful. These are the key elements of any successful business plan:
A) Goals What are you looking for? They should be simple, concise, measurable and doable.
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 want to specialize in. Agents who are new to residential real estate typically have the greatest results with renters and buyers, then proceed to listing properties after they've had a few transactions.
C) Market – Who are you marketing your business to?
D) Budget Consider you are a “new real estate agent, inc.” and note every expense you're facing – gas, food, cell phone and so on… You should then write down the new costs you're absorbing – fees for board members, more consumption of gasoline, more cell phones marketing (very vital) etc…
E) The issue of funding How do you plan to finance your budget if you have no moneyor without income for the initial (at minimum) sixty days? Based on the goals you've set for yourself, at what point will you be able to break the threshold of breaking even?
F) Marketing Plan How will you spread the word about your offerings? The most effective method to promote yourself is through your own circle of influence (people whom you are familiar with). Be sure to do it efficiently and consistently.
2) Not Using the Best Possible Closing Team
The most successful businessmen surround themselves with those who are more knowledgeable than they are. It requires a large team to conclude a deal including the Buyer's Agent and Listing Agent Mortgage Broker, insurance Agent Title Officer, Inspector Appraiser, and often many more! As a real estate agent you're in a position of referring your client to anyone you want and you must ensure that the person you recommend to them will be beneficial to the transaction not one who could cause you more stress. The closing team that you recommend and “put your name to,” will help your day! If they do a good job you can claim part of the credit since you introduced them to the transaction.
The most dangerous duo are that of the New Real Estate Agent & New Mortgage Broker. They meet and decide that through their marketing efforts they will be able to conquer the world! They're both focused on the right aspect of their businesses marketing, however, they're doing one another harm by choosing to offer each other business. If you recommend an unprofessional insurance broker and it causes an issue during the transaction. You simply make a phone call and the new agent is able to sign the property in under an hour. However, as it generally takes at minimum two weeks to complete an loan, if employ a lender who isn't experienced and the outcome could be catastrophic! You could be in the situation in which you are “begging for a contract extension,” or, even more troubling than that, you may be denied a contract extension.
A good team for closing is usually more knowledgeable than their part during the process. Because of this, they can be contacted for help, and they'll step in (quietly) when they notice an opportunity for error – as they're there to assist and, in return, receive an increase in your profits. Employing experienced, knowledgeable members for your closing team will assist you immensely in running a business worthy of more business…and the best part is that it's completely free!
3) not arming themselves using the Necessary Tools
Starting out as a real estate agent is costly. In Texas the license itself can be a significant investment and could cost anywhere from $700 to $900 (not considering the time that you'll need to invest.) However, you'll be faced with further costs as you begin to equip yourself with the essential tools to succeed. Don't be fooled that they're not necessary because your competition is making use of every tool they can to aid them.
A) MLS Access is likely to be the most costly necessity you'll come across. Signing up with your local (and national, in default) Board of Realtors will allow you to purchase MLS access. In Austin, Texas, will cost you about $1000. But, you shouldn't cut corners on this aspect. The ability to gain MLS access is among the most essential aspects you can accomplish. This is what sets us apart from the typical salesperson as we don't offer homes for sale but we show the houses are available. Through MLS Access, you will have the majority of houses that are available for sale in your neighborhood that you can present to your customers.
B) Mobile Phone with the Beefy Plan – These days, everybody owns a mobile phone. But not every person has an account that can provide the amount of usage Real Estate Agents need. Make sure you get at least 1500 minutes of time per month. You'd like and want to be accessible to your customers 24/7, not just weekends and evenings.
C) Computer (Preferably a laptop) – There's no alternative, you must have an electronic device and be skilled enough to utilize email. It is advisable to consider investing in some management software for your business and also. If you'd like to save some money (and who wouldn't) then you can get the client & email management software Thunderbird from http://www.mozilla.com and you can get a free office suite from http://www.openoffice.org The only downside to these programs is that they do not sync with your PDA or Smart Phone. Laptops are a major advantage because it lets you to work at home or even on the go. Real estate agents who are new to the field often are surprised by how much time they're spending away from their desks A laptop can help to keep in the loop even when on the move.
Do) Real Estate Friendly Car It's not necessary to own an expensive Lexus or a BMW, but your Miata will not be enough. Be sure to have a 4-door vehicle or an SUV which is comfortable, and attractive. Make sure it's clean and, be sure to not smoke inside the vehicle! You'll spend many hours in your car and you'll be putting lots of miles on it. Therefore, when it's fuel-efficient it's an enormous benefit. If your car is a sleek convertible, or own that KILLER Jeep from your college days now is the time to sell the vehicle into.
4) Lack of Proper Funding
If you've had the patience to write the business strategy, you'll need to have your budget. However, I can't emphasize enough that the significance of having your budget. But, a budget on its own does not address the crucial factor of financing. 90% of small-scale businesses fail because of the lack of funds. The majority of new agents require 3 months of reserves before stepping into full-time agency. But, savings stored in banks aren't always the only method to answer the question of financing. Maybe your partner is willing to help you for a specified period of time. You could also keep working part-time and not affect your career as a real estate agent. Many successful waiters can make the transition to becoming successful real estate agents without a dime in their accounts. When you launch your business don't anticipate to earn any income for at a minimum 60 days.
5) Refusing to Spend Money on Marketing
Many newly-minted Real Estate Agents don't realize that the most difficult part of their business is locating the company. In addition, they've spent around $2000 on licensing and fees The last thing they'd like to do is spend more money! Another issue lies in the fact that they don't understand that, if you've jumped into this Real Estate Business, you haven't gotten a new job. A seasoned professional will inform you that how your business is directly proportional to the amount you spend on marketing. If you select the right broker, you'll be able to get some excellent leads that come inbound. Don't overlook an effective, personal marketing strategy at the start to make your name known as the Real estate Agent to call.
6) Not Focusing Their Marketing Efforts in the Most Effective Areas
One reason for the majority of newly-qualified real Estate Agents who begin investing in personal marketing ceases is due to the fact that they're spending their money in the wrong spot. The easiest location to go, and the place where conventional Real Estate tells you to spend your money is with traditional print media such as the newspaper and real estate magazines etc… The most well-known location to view real estate ads, the place where big offices spend an enormous amount of funds, and many new agents make the mistake of spending their money there. This is a major issue for new agents due to its poor return. Large brokerages are able to invest their money in this area because they're able to fulfill two functions by marketing their own properties to sell while generating new buyers to their buyers' agents. Agents who are new to the field should consider their own sphere of influence as well as referral marketing to achieve the highest ROI from their investments. Agents can invest just $100 per month marketing to their friends, family members and colleagues, and get an astounding return. There are a variety of fantastic referral methods that are all based on the same principle – when you consistently promote your business to the people in your area that you are the real estate agent to visit – you'll be able to get more business. The trick is to choose the right system and adhere to the system. The results will be evident.
7) Choosing the Wrong Brokerage for the Wrong Reasons
A new Real Estate Agents choose their new broker based on a variety of reasons. For instance, they have good reviews and offer the most competitive rates, the office is near to their home, etc… Although these aren't all bad motives to select the right broker, they're not going to be able to assist you achieve your goals. The primary reason for choosing an agent, and the most important question to ask is “What do you offer your new agents.” If your answer is “The most competitive split in town” you must continue to look. Keep in mind that the entire amount of $0 is still a zero. If you're thinking of the biggest broker in town with a stellar image, remember that you're launching as a business, not a job. While it's nice to boast to your acquaintances about being hired by an eminent company, it's not enough to display your license to the wall of the office with other successful agents.
Your primary concern when you interview new brokers is what they have to offer you as a brand new agent. Do they have leads that are coming in? What training programs do they comprise? What's their retention rate? What's their average sale price? Do they motivate their agents to market themselves? A broker's goal is to assist new agents begin their careers successfully and also to assist established Agents move their careers up to the next stage. As a rookie agent, don't be concerned about commission splits, the name of your agency and more about specific agency programs and standards.
A new job in Real Estate is very exciting. Starting a Real Estate business can provide the Agent with the opportunity to explore endless possibilities and flexibility. Agents who are new have a infamously high rate of failure it is true that a new Real Estate career is very frightening. But, if you stay clear of the seven most common mistakes that rookie Real Estate Agents make, you'll be well ahead of your peers!