Are you a new real estate agent? If so, congratulations on your choice. Real estate is one of the most rewarding careers you can choose, and potentially one of the most lucrative ones.
However, as you can imagine, reaching your goals in real estate is not as easy as getting your real estate license, and joining a brokerage. It takes a lot of hard work, dedication, patience, and the willingness to learn from your mistakes and the mistakes of others. Since you’re not working for a wage (usually), and you’re essentially a business owner, you need to approach real estate as an entrepreneur. Of course, being an entrepreneur is a lot more difficult than being an employee.
That’s why we decided to put together a list of some of the most common mistakes new real estate agents make. That way you’ll be able to see if you’re on your way to making them and correct course if necessary.
1. Rushing In
You’ve probably heard a million times by now that you need to treat your real estate career as an actual business.
And you know what? This cliché exists for a reason: it is absolutely true. As a real estate professional, it’s your personal responsibility to attract your own clients, do your own marketing, and keep your current clients.
Sure, your broker may occasionally send leads your way. But your own success is NOT the responsibility of your broker. Regardless of the promises (and hype) your real estate company, broker, or co-workers may make, your real estate success is your own responsibility.
When you first start your real estate career, you will have no leads, no listings, and no personal brand recognition. And it will probably take a while before you close your first deal.
Don’t be discouraged. This is normal.
So before you start your real estate career, you need to anticipate the amount of time it will take before you start seeing some cash flow your way. Make sure you have a cash cushion to carry you over for at least 6-9 months.
And while you may be tempted to have a second job while your real estate career starts to get some traction (and that’s exactly what many real estate agents have done) it would be far better if you’re able to work in real estate full time from day one.
There’s never a shortage of tasks you need to do to make your personal brand stand out, you need to reach out to tons of people in your circle of influence, and you need to demonstrate to your potential clients that you take this job very seriously and you’re doing everything you can to sell their home.
2. Expecting Immediate Success
While there are many cases of rookie real estate agents that started to close deals from day one and achieved success almost overnight, those cases are the exception that proves the rule. Typically, those rookie agents were already well connected, had plenty of experience related to real estate, or were simply in the right place at the right time.
In the vast majority of cases, it takes months to close your first deal, even if you’re doing everything right, and it may take up to two years before you start making what you would call “good money” in real estate.
Of course, this is not meant to discourage you or keep you from having a healthy amount of ambition. This is a reminder that you need to plan realistically for the most common case scenario and make all the preparations that you need to increase your chances of success.
3. Not Preparing For Business Expenses
Following suit with the last point, it’s easy to underestimate how much you need to spend on marketing when first starting your real estate business. As with any new business, you need to spend money before you make money.
You need to plan for business expenses such as:
- Office Supplies
- Desk fees
- An MLS subscription
- Car maintenance and gas to go to showings
- Marketing tools
- A website
- An advertising budget
4. Unfocused Marketing
It can be extremely easy to start dumping a ton of money into tv ads, flyers, Google Ads, Facebook ads, and other forms of advertising right out of the gate.
However, this is also one of the easiest ways to burn through all of your funds.
Before you start ANY marketing efforts, you need to understand your niche. Start by using the typical questions a good journalist would ask: “W” questions.
- What is my real estate niche?
- Where do the members of my niche go to get real estate advice?
- When are they most likely to look for a real estate agent?
- Which forms of media are they most likely to consume?
- Why would they choose my services over my competitors?
- How can I start providing value to them from day one?
In addition, you need to realize that it takes a while for your personal brand to be recognized, and your marketing activities should not be a one-off effort. You need to establish a consistent marketing budget, and always set aside funds to make sure you stay relevant in your prospects’ minds.
5. Not Having An Engaging Website That Provides Value To Leads And Prospects
Don’t just settle for an agent website that serves as a digital business card or yet another property search website. You need to get an appealing website created to collect, attract and nurture your leads. And it should also provide value beyond just offering a free property search function.
Things of value you provide on your website include:
- Buyer and seller guides.
- A blog with valuable articles (here are 72 ideas of blog entries you may start writing about today)
- Video guides
- Local restaurant and entertainment guides
- Interviews with local figures
- Remodeling guides
6. Not Learning To Say “No”
Saying “yes” to everybody is the perfect prescription for burnout, stress, and misery. This is especially true in real estate.
You need to learn to say no to clients that refuse to price their property properly from the beginning. You must learn to say no to micromanaging clients who you know will be a problem from the start.
You must especially learn to say no to attempts to reduce your commission rate.
It is not an exaggeration to say that your ability to confidently say no will be absolutely critical in building the type of business you enjoy and look forward to doing every day.
7. Failure To Communicate With Clients
Clients' most common complaint about their real estate agents is a lack of communication. It's not just a lack of communication; it's a lack of communication on their terms.
Make time each week to communicate with your clients. Set aside a day to contact them. Inquire about their preferred method of communication (text, email, phone call), and let them know what you did for them that week.
With a little extra effort, you could shine and outperform the vast majority of agents out there.
8. Failure To Hire An Assistant As Soon As Possible
Hiring the right assistant should not be viewed as a cost. It's a financial commitment. Rather than focusing solely on the cost, consider what an assistant will bring to the table.
Consider how much better you would perform if you could devote an extra 4-5 hours per week to prospecting, marketing, and client follow-up. How many more sales would translate into each year?
And how much would your stress levels decrease if you could have someone else handle some of the most tedious aspects of your job?
9. Not Putting Away A Portion Of Every Paycheck
Just like with any kind of business, there will always be ups and downs in your real estate market. Sometimes you will have a ton of work and other times you will be struggling. So in order to ensure that you can get through the difficult times, make sure you put a portion of each commission away and don’t touch it.
Or better yet, put it away in a savings account, a retirement account, or invest it into an index fund.
10. Not Learning Something New Each Day
The real estate market is more dynamic and changing than ever. Just take a look at how many adjustments we all had to do to get through 2020. And if you think things will finally settle down and go back to normal, you could be making a huge mistake.
That’s why you need to be in a constant state of learning. You need to be on top of the newest real estate tech, new market niches, and the ever-changing needs of your current clients.
Become a lifelong student of real estate. The more you learn, the more you’ll earn.
11. Not Knowing Your Unique Value Proposition
New real estate agents have a tough climb ahead of them. They are coming into a notoriously competitive industry, and they don’t have any record of success or good word of mouth to validate them.
So how can new agents carve their own niche, and convince clients to choose them over other more experienced agents?
A good way to do so is by understanding your unique value proposition.
A unique value proposition is often defined as a phrase that briefly explains to your potential clients why your services are unique. It provides a reason why they should do business with you instead of your competitors.
In order to come up with your own unique value proposition, you need to ask yourself:
- How can my skill set uniquely benefit people in my chosen niche?
- Who are my competitors? What are their weaknesses?
- How is my market underserved?
- What services can I offer that no one else can?
- What aspects of my niche are underserved?
Conclusion
Real estate is a challenging, yet rewarding career path. But as with any new business, you need to be aware of some of the most common pitfalls, so you can more easily identify them and avoid making unnecessary mistakes. That way you’ll be more prepared, and increase the chances of your success.