If you’re interested in getting started with real estate and dream of selling homes for a nice commission check, let’s discuss one hard truth: over 90% of new real estate agents fail within the first three years.
If the failure rate is so high, how can you avoid that pitfall?
First, real estate courses barely taught you anything other than how to be in compliance with ethical regulations and laws. Then, and only in rare situations, it prepared you for generating leads, negotiating a deal, writing contracts, and closing a sale.
Those tasks are acquired once you join a brokerage, but these still don’t pay the bills until you have clients. Getting leads and converting them to clients is a task that requires time, knowledge, patience, and understanding, all of which are great traits to have, but don’t pay the bills in the meantime.
If you’re starting out in real estate, get the truth behind how to make it successful.
I have a few real estate agent tips for beginners to help you avoid being one of those statistics and be on your way toward becoming a super-agent earner.
Have Money On Hand
Starting as a real estate agent requires a lot of hustle and grit to find clients, but the one thing that is needed more than any is some money.
Most of the time, you are starting your own business as a real estate agent. And, like most business startups, you need funding to get off the ground and grow.
Yes, I know you will be hanging your license under a broker, but that doesn’t make you the broker’s employee. Most broker/agent relationships are as independent contractors. So unless you land with a successful team that pays you for your training, you will be operating as an independent freelancer, meaning you’re working for free until your first commission.
In general, you want to have around 6-months of cash on hand if you’re going into real estate full-time. However, some agents find that to be difficult, so they choose to take a part-time approach, which is an excellent way to hedge your bet, learn about all that being an agent requires, and still provide for you and your family’s needs.
Just getting your license is the first thing, but once you’ve obtained it means you have to pay your license fees, join a brokerage (with fees), pay for leads (most of the time), and join a real estate association (with more fees). There are a lot of hands out there that need to be paid before you even have your first commission.
One thing they never teach you in real estate school is that between the time you start your real estate business to the time you make your first, second, and third deal, you could quickly fall behind if you don’t have a strategy for how you plan to pay your bills.
You have to treat your real estate career like a business startup. You need money on hand to pay for licensing, dues, and fees on an annual or quarterly basis, including your business and self-employment taxes.
However, getting started in real estate can prove to be really lucrative if done strategically.
Interview With Multiple Brokers
Getting your license is only the first step in your real estate career. The brokerage you join is the second and perhaps most crucial step.
Finding a good brokerage is more than just your commission split. It’s the place that most aligns with your goals and philosophy and where you’ll make your first professional associations.
When you set out to interview a broker, you want to find one that provides helpful guidance and training, has a decent commission split, has some name recognition, and overall aligns with your priorities. Only through interviewing with multiple brokers can you find the one that is right for you to start out.
A good brokerage provides new real estate agents with various options: training, support, and education.
These resources are going to be the foundation you build your business and are especially necessary for new agents.
Think about it this way; a good commission split is an excellent agreement to have in place, but a decent split on zero dollars is still zero dollars. So your split can’t be the sole factor you decide upon when selecting a brokerage.
You may find that in large firms, you’re merely a number to them, that as you start out, you’re left floundering to your own devices.
In a boutique firm, however, it may not carry the weight and name recognition that sets you as an agent apart from others when you’re competing for a listing or client.
The key to building a foundation for success is partly to your hard work, and the types of support provided within the brokerage you choose.
Find A Mentor
Finding a mentor is one of the most significant things you can do to jumpstart your real estate career and build the foundations for success. A mentor is a veteran, experienced agent who will take you under their wing and help teach you the aspects of the business you need to know to succeed.
Some mentors may make you work on different parts of their business, and you should look at this mentorship as an apprenticeship of sorts. Be willing to do some of the necessary “grunt” work, and use your time to build your business strategy and plan. Otherwise, you may end up as a glorified office aid for someone else’s benefit.
Most critically, ask questions and be a “fly-on-the-wall” as much as your mentor will let you. Follow them to appointments, assist with their class and social media, learn how to adjust comps for a listing presentation, and how to write contracts.
One of the most significant things to consider when working with a mentor is to find someone in your office whom you feel comfortable and natural around.
Another tactic is to consider joining a team. A team is a collection of agents, transaction coordinators, and office aids that work with a senior agent to drive that agent’s brand.
By joining a team as a junior associate, you may need to do some of the grunt work but, in the process, may receive a small salary for your efforts. Much like a mentorship, work with high-performing agents on the team, shadow them and learn what makes their business succeed.
Mentors and teams are great ways for newbies to learn the business, how to analyze the market, and possibly know how to generate leads (sometimes even receive some leads) that will catapult your business.
One other thing that a mentor or team will provide you is finding someone to hold you accountable. As you start out, setting a schedule, adhering to doing the small things that don’t seem to be paying off, and staying on track with your goals is difficult when you’re doing it alone.
But having someone that can hold you accountable and keep you on track is priceless. Consider paying for business coaching if your mentor cannot hold you responsible.
Know The Market
Taking your real estate licensing exam is the fundamental thing you need to do. In addition, diving into market analysis and trends and learning what is happening and how those changes may affect your clients is essential. But to be seen as an expert, you need to master the subject.
Every day you should be watching the market trends, following listings to see the prices and time on the market they are listed at, and if those agents are outside-the-box ways that those agents marketed the property.
Also, educating yourself by reading books and articles on real estate, joining webinars and conferences, following leading podcasts and youtube channels, and subscribing to leaders in the real estate market blogs are crucial to keeping up-to-date trends and information.
By doing the homework, you can position yourself as someone who knows the market and be seen by others as a go-to expert.
Remember, you are strategizing ways to have a long career in real estate to beat the trend of 90% of new agents washing out. To do it, you need to stand out from the crowd, and taking a lifelong learning approach about the market and your business will go a long way toward establishing your reputation.
In other words, just because you pass your licensing exam doesn’t mean that you’re done learning. In fact, if you want to be seen as an expert in real estate, your education is just beginning.
Leads: The LifeBlood Of The Business
When you’re starting out as a new real estate agent, one thing you need to figure out quickly is how are you going to generate leads?
Leads are potential clients; without them, your business is a failure. No leads, no business.
You’ll have to figure out your lead generation strategy. You can pay for leads, which is why Zillow and Realtor sell leads to agents; without them, their businesses would dry up. You need money to buy leads but can’t afford to spend that much on lead generation.
Consider your lead generation strategy to be the single most important part of your marketing and business, and invest as much time as possible.
Prospect: Prospecting is the process of finding new contacts, converting them to leads, and, hopefully, clients.
Prospecting can take many forms; you can email and call or do in-person prospecting, such as door knocking. Some agents and brokers have gotten creative with their prospecting, from hosting a Q&A happy hour to driving for Uber and Lyft to be in a car to meet with potential clients.
Farm: Farming is taking a neighborhood and sending out regular updates and reminders to each home in that area. It’s a long-term strategy to be front-of-mind for when a potential lead wants to buy or sell. Tactics include mailers with market updates, branded notepads, and magnets that cost little to produce but can keep you and your brand in front of mind.
Open Houses: Open houses are a free way to get in front of potential clients. Contact a listing agent to host an open house or discuss your interest in hosting and signing up with your broker. Once you sign up, promote your open house on social media, walk around the neighborhood of your open house, and invite the neighbors to stop by during the hours you’ll hold it open.
While being sure to hand out your information to everyone who walks into your open house, the key is to collect their information so that you can add them to an email drip campaign or other long-term prospecting strategies.
Sphere: Your sphere is also known as your sphere of influence. Your sphere is those people, friends, family, and associates you know can add to your prospect list and ask for referrals. Be careful not to inundate your sphere, especially when starting out.
When you start reaching out to your sphere, begin with a simple email announcing your move to becoming a real estate agent and offer to assist them with their real estate needs.
You do want to make a small ask such as;
“Hi, friends,
As some of you may know, I recently got my real estate license. If you have any questions, I’d be happy to assist you!
If I may, I’d like to make one small request; If you know of anyone interested in real estate, I’d be flattered if you’d pass my information along to them.
Thank you so much,
Agent XYZ”
The key is to be friendly and helpful without coming across as being too needy or salesy, both of which are huge turnoffs. Most people you ask will say they’re happy to help and are excited about your career, but when it comes down to it, they’ll often forget to bring you up to their sphere. So you’ll need a strategy to be front of mind in your sphere so that when the time comes, you’re the go-to recommendation for a real estate agent.
Social Media: Using your social media to promote your real estate business is a huge “yes” with a caveat. When you are posting on social media, there’s the 80/20 rule. The 80/20 rule states that you should post 80% of personal things on social media, and only 20% should be business and market-oriented.
Create personalized content for a dedicated business page without being pushy about your interest in capturing your visitor's information. For example, you will want to promote local events and other cultural events and only barely mention (your signature card) that you’re a realtor.
Paid Leads: Paid leads can be truly valuable, but not all paid leads are the same. For example, some agencies sell leads to multiple agents, so it becomes the first contact that usually wins the lead. Other paid leads are sold to a single agent, but the sources for collecting those leads may be less valuable.
For example, some social media leads aren’t as valuable as others in the short term. So make sure you ask around your office and with other real estate agents as to what has worked for them before you sink some money into a paid lead strategy.
Always Be Front Of Mind:
Always being front of mind means that when a person is ready to buy or sell real estate, you’re the person who comes to mind, and they reach out to help. Using these lead generation strategies, followed by a friendly follow-up such as an email drip campaign, will keep you in front of mind as your potential lead is ready to move to a potential client.
Learning to find ways to be in front of mind without being pushy is a delicate balance; it’s more art than science, but some of your prospective strategies are an excellent way to keep your business in the minds of your potential clients.
Starting a new career is always tricky, but it can be absolutely challenging to sustain a career in real estate. There are several reasons for this, but real estate requires a licensing exam as the only barrier to entry, making it extremely easy to start a career in real estate. However, nobody tells you how difficult it will be to find success.
Equipping yourself with the knowledge that you need to learn the market and have a strategy in place for lead generation are the two most important factors that go toward you succeeding or being like all the rest, failing within the first couple of years.
With an ever-changing market and the ease with that people can enter the business, finding a mentor and subscribing to as many blogs and mailing lists such as this one are foundational to your understanding of what will be required of you to succeed as a real estate agent.
