Being a realtor can be a lucrative career, and some real estate agents have even managed to reach millionaire status. But this is the glamorous side of real estate, the side that often attracts new realtors into the industry. The unfortunate part is that most new agents come in with big business dreams which end up getting destroyed during their first year in business.
We have put together what we feel are some of the biggest factors leading to new realtor failure. Make sure you avoid these mistakes at all costs!
Not Having a Financial Plan
Brand new agents often forget that commissions are a drawn out process. It can take several weeks or even months to close a deal. That large commission cheque takes time to generate and even more time to actually arrive in the mail. Often, new agents forget that they need money in the bank to last them for several months until a steady flow of commissions are coming in. Your first few months are going to be tough, and you will be lucky if you get your first sale within the initial 90 days. Without planning, new agents drain whatever savings they have, giving them panic as they wait for the next deal to close. This is one of the biggest reasons new realtors drop out of the industry – they can’t hold their ship together long enough for money to start coming in.
Solution: Keep at least six months worth of savings in your bank account before jumping into the real estate game. Make sure you have enough tucked away to cover food, expenses, and overhead until you can create some positive cash flow. This way, you can transition into your new agent role without losing your shirt in the process.
Not Being Aggressive Enough
New realtors can be self-conscious and nervous. Not having done any deals, or even the idea of being a sales person, scares the daylights out of them! But the reality is that business isn’t going to come knocking on your door. You really have to push hard to bring those deals in.
Agents have to swallow their fears and jump into the industry knowing that it will take time to learn and become a pro. You absolutely will screw up, but ultimately you will learn and grow from it.
Solution: Get out there and be aggressive. Everyday you should do at least five new things to push your business forward. Whether that’s teaching yourself a new marketing technique, prospecting for new clients, or attending a networking function, every new day is another opportunity to try and get your name out there and build your business.
Being Scatter Brained
Having a plan is the key to success for any new realtor – actually, for any realtor, new or old. Without a plan, your hard work is going to spread across so many tasks that nothing really gets done properly, and everything risks being done poorly.
Solution: Get a comprehensive plan together. We recommend that any new realtor should have at least three plans: a financial plan, a business plan, and a marketing plan. These three documents should help keep your business on track. One important thing that you need to develop into all of your plans is a weekly action list. Break down all the tasks that you need to get done over the year and divide them up into bite size tasks you can do each week. This way, you’re not overwhelmed on where to start on your plans, but rather have a clear path of action to take everyday.
Being a realtor can be one of the most rewarding self-employed careers one could ask for. But to achieve six-figure earning, you really have to focus to avoid pitfalls. These three tips for new real estate agents should help any new Realtor avoid first year failure in the industry.