Every time I talk to someone about my business and career, it always comes up that “they’ve thought about getting into property” or know someone who has. With so many people thinking about getting into real estate, and getting into property – why aren’t there more lucrative Realtors on the globe? 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, and how different it is from traditional careers, makes it difficult for the average indivdual to successfully make the transition in to 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 REALTORS bring many great qualities to the table – plenty of energy and ambition – however they also make a lot of common mistakes. Here are Companies That Buy Houses Make.
1) No Business Plan or Business Strategy
So many new agents put all their emphasis on which Real Estate Brokerage they will join when their shiny new license will come in the mail. Why? Because most new REALTORS have never experienced business for themselves – they’ve only worked as employees. They, mistakenly, believe that getting into the Real Estate business is “getting a new job.” What they’re missing is that they’re about to go into business for themselves. If you’ve ever opened the doors to ANY business, you know that one of many key ingredients can be your business plan. Your business plan helps you define where you’re going, how you are getting there, and what it’s going to take for you yourself to make your real estate business a success. Here are the essentials of any good 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 most trades & master of none” – choose residential or commercial, buyers/sellers/renters, and what area(s) you intend to specialize in. New residential real estate agents tend to have probably the most success with buyers/renters and move on to listing homes after they’ve completed a few transactions.
C) Market – that are you marketing yourself to?
D) Budget – consider yourself “new real estate agent, inc.” and write down EVERY expense you have – gas, groceries, cell 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 will you pay for your budget w/ no income for the initial (at least) 60 days? With the goals you’ve set on your own, when will you break even?
F) Marketing Plan – how are you going to get 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 do so effectively and systematically.
2) Not Using the GREATEST Closing Team
They say the best 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 Agent, Title Officer, Inspector, Appraiser, and sometimes more! As an agent, you are in the position to refer your client to whoever you select, and you should make sure that anyone you refer in will be a secured asset to the transaction, not somebody who will bring 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 take part of the credit because you referred them into the transaction.
The deadliest duo out there 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 section of their business – marketing – but they’re doing each other no favors by choosing to give each other business. In the event that 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 house in less than an 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.
An excellent closing team will typically learn than their role in the transaction. Because of this, you can turn to them with questions, and they’ll step in (quietly) if they see a potential mistake – since they want to assist you to, and in exchange receive more of your business. Using good, experienced players for your closing team can help you infinitely in conducting business worthy of MORE business…and on top of that, 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 will 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 attend arm yourself with the necessary tools of the trade. And do not fool yourself – they’re necessary – because your competition are definitely using every tool to greatly help THEM.
A) MLS Access is probably the most expensive necessity you are going to run into. Joining your local (and state & national, by default) Board of Realtors will help you to purchase 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 own average salesman – we don’t sell homes, we present the homes that we supply. With MLS Access, you will 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 amount of use that Real Estate Agents 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.