5 Ways Real Estate Agents Can Lay a Foundation for Success
Real estate agents are well aware of the competitive nature of the industry, and the statistics prove it. There are over 2 million licensed real estate agents in the U.S. It’s true that not all of those agents make their living as full-time agents, but compare that figure to the number of homes sold.
According to the National Association of Realtors, 5.45 million existing homes were sold in 2016. For simplicity’s sake, assume that there were two agents involved in every transaction. That means that there were more than five agents competing for every sale. In such a highly competitive market, agents need to be proactive to lay the foundation for success.
1. Go All In
Many people think being a real estate agent is easy and want to try it on a part-time basis. The reality is that unless you treat real estate like a full-time business, it’s difficult to make a living at it.
Real estate attracts individuals who love forming relationships and helping people. They often tend to ignore the fact that they’re running a business. These agents don’t establish a corporate entity, obtain an EIN or learn how to run a business. It may seem trivial, but investing in learning how to manage a business is critical to an agent’s success.
2. Learn to Be Your Own Boss
The autonomy offered by the real estate industry attracts many people, but it can come at a cost. If you’ve never worked for yourself before, you may not be familiar with the rigors of managing your time, motivating yourself or handling the uncertainty that comes from not having a steady paycheck.
You must motivate yourself without a boss who is depending on your productivity. In addition, you must avoid letting the uncertainty make you one of the 87 percent of real estate agents who leave the business in the first five years.
Create your own structure with a business plan, defined business processes and the technology to run your business. Track your sales results every month to ensure you’re reaching your goals.
An agent who tries to do everything themselves will spend too much time working in their business and not enough working on their business. Spreading yourself too thin will prevent you from growing your business.
Therefore, use technology wisely and delegate the tasks that don’t require your specific expertise. For an agent, that usually means outsourcing rather than building staff. Between local part-time hires and the trend toward virtual support, you’ll find many ways to free up your time to build the business.
4. Make a Plan
Hold yourself accountable for achieving your goals by writing a business plan and following it. You need to address the issues any small business faces. Identify the standard expenses you need to cover that may include your mortgage, car, cell phone and internet. Don’t forget to include preliminary numbers for expenses such as business cards, website creation and maintenance, and other marketing efforts.
Next, identify your revenue projections. Based on the average sales price in your area, calculate the number of homes you’ll need to sell to meet your expenses and make a profit.
Finally, firm up a marketing plan that will allow you to hit your numbers. Will you farm a territory or use online advertising? After finalizing that plan, adjust your expense and revenue numbers accordingly.
5. Be Realistic
Don’t underestimate the time required to be a successful real estate agent. Helping people make one of the biggest purchases they’ll ever make takes time. Your schedule can be flexible to allow you to hit the gym each morning, but you may need to work late on a Saturday to close a deal. Avoid the burnout that constant client demands can cause.
Real estate can be a rewarding career. Laying a good foundation will help you establish a thriving real estate business.