Real estate TV shows obscure the real process behind selling a home. In fact, most don’t even detail what it takes to get a home sold. This can be very discouraging to inspiring realtors. 80% of realtors don’t even make past the second year.
The prospects of becoming a successful realtor are exciting. It’s very appealing to anyone looking for a self-made career. The ceiling for how much you can earn is so high, it’s easy to think that there’s plenty of room at the top.
The truth is, space is very crowded and the market is very uncertain right now. That isn’t to say that you can’t make it right now, just be realistic. Preparing for the worst and hoping for the best is how you can outwit and outlast your competition.
Here are some key elements to working in real estate in 2018:
Each state has its own requirements on getting licensed as a real estate agent. This will require some hard work and studying to pass your exams. The smart thing to do is to treat these real estate courses like you would a college degree.
Becoming a top realtor means becoming an expert in your craft. You’ll need to know your stuff and you have to move fast. After you get licensed, you’ll need to find yourself a brokerage that can give you the best chance for success. In some cases, like BrokerBreakUp, you only need your Texas Salesperson license. An individual broker’s license is not required.
Dealing with a Broker
Your brokerage will determine how fast you move up the ladder of success. You should be researching brokers before you finish your realtor courses. Start with recommendations from your peers and teachers.
Figure out which one has the best tools, training, and value for your money. The hidden costs of dealing with a broker can start to add up, including your dues, transactional fees, insurance premiums, and more. This is likely to be taken out of your commission and not something you’ll have to micromanage.
Income potential as a real estate agent varies wildly. Real estate agents earned a median salary of $44,090 in 2016. The highest-paid was $112,570, while the lowest-paid was all the way down to $22,230. Making less than a fast food working is pretty rough as a real estate agent.
The reason why numbers can get that low is due to market and average commission. Starting out as a realtor, you can expect anywhere between 3 and 5 percent of the sale price. This will vary by state and health of the real estate market.
If you’re selling houses worth only $200,000, then you’ll need to sell at least one bi-monthly to scrape by. That doesn’t sound hard at all, without having any experience as a realtor. The problem occurs when you’re stuck selling $50-100,000 homes and struggling to get bites.
How the commission is split also plays a huge role in maintaining momentum as a realtor. The split could be a flat rate or it could be a sliding scale.
No Schedule: Pros and Cons
Another major draw towards becoming a realtor is that you don’t work any set hours. You don’t have a schedule per-say, but you will definitely be setting a schedule. Successful realtors don’t keep a light workload, they are constantly trying to find new opportunities, get as many open houses done as possible, and on the phone coordinating with dozens of people.
Yeah, you don’t have to clock in and listen to someone bark orders at you all day. If you don’t have the drive, though, you won’t survive in real estate. Being able to adapt and roll with the punches is key to working in an often very demanding career.
Self-discipline doesn’t come easy, but you’ll quickly realize just how much real estate requires it. You need to find a healthy balance of time spent working and time to yourself. If your work blends into your personal life, you’re going to have a hard time staying grounded.
Working Smarter, Not Harder
Realtors who don’t make it out of their first year aren’t unsuccessful because they’re lazy. Well, I’m sure there are some, but the potential earnings certainly push most agents. No, these realtors aren’t profitable because they try to do too much, rather than focus their energy on productivity management.
Sticking to a plan, getting results, and focusing on what works beats every trick, gimmick, or marketing trend in the book. There are so many young realtors who tried to ride the app wave and went bust out there. To be profitable and successful means time for analytics, testing systems, and following up with new leads.
Only 3% of your leads are ready to buy right away. That means the other 97% you’re going to have to play the long game and reel them in. This requires time, patience, tactics, and adapting to buying behavior.
You can’t afford to chase hypotheticals and unproven claims. Do that when you have money to throw around after you’ve established yourself as an agent. Invest in your leads and your efforts will pay off.
You can’t afford to go after fast food, don’t listen to older realtors who have had the privilege to do so.
Fiscal Responsibility Woes
When you first step into the arena, the amount of money leaving your account can be jarring. All the fees, commision splits, dues, and personal expenses can catch you off-guard. If you feel tempted to go with lower fees in exchange for a lower commission: don’t do it unless you have to.
This could possibly limit your growth and frustrate you in the process. When times get tough, don’t lower the bar just to survive. Besides, it’s going to be expensive even if you do try to go the lower fee route. Your margins will just be lower and you’ll have a cap on how much you can pull in per year.
If the squeeze is too tight, we suggest finding other ways to make money in real estate to hold you over.
The Power of Marketing
Building a brand isn’t emphasized as strongly as other aspects of real estate. You need to come out of the gate with a website, a social media presence, and promotional materials. Network, build a following, an email list, create video walkthroughs, and gas yourself up with blogs/vlogs, and tutorials.
Your personality has to shine or you’ll be swimming in a sea full of faces and gain no advantage. Your goal is to gain trust from those making major investments in their lives. Your brokerage can help you through this process, but it’s up to you to close the deals.
As a real estate agent with no previous sales, you’ll be shadowing those who do have experience. Don’t let that become a crutch, amplify your first sales and hit the ground running. Getting stuck as a co-realtor is an easy way to kill the dream.
Get the Clients’ Clients
In the beginning, you have to take whatever you can get. That means if you are selling less than desirable homes, get to know the buyers well. You will gain a lot of new clients off the backs of previous clients.
Even when you do ascend into the $250k+ range of homebuyers, keep those old clients on hand. They could have wealthier friends or family who is looking for homes, too. This might sound obvious reading aloud, but it’s a common mistake to get tunnel vision as a realtor.
In fact, keep this in mind before you even land your first client. If you’re going into real estate thinking you can rely on your network of family and friends, humble yourself. We’re talking serious life investments here, not small business sales.
Most people are going to want to wait until you have some experience under your belt. The best you can do is offer them the ol’ “family discount” to see if you can get any bites.
Working in Real Estate and Thriving
The rule of thumb is to keep your nose down and grind out the first two years of being a realtor. Push through the successes and failures, there’s light at the end of the tunnel. That is if you educate yourself while working in real estate.
The markets can change quickly, you’ll be moving and working in different cities, so you’ll need to do lots of research. Don’t get burned out by overworking the same properties. Clients can smell desperation a mile away. If you can stay one step ahead of your competitors, you’ll find the opportunities you need.
If at the end of this guide, you feel like real estate is your calling, then start your journey now and learn the ropes. Head over to Curiosity Human for valuable real estate tips and guides that will give you an edge over the competition. This is a place where you’ll be rewarded for your curiosity and tenaciousness as a realtor.