Have you decided, later in your career, that you want to transition to real estate? Perhaps you purchased a home and thought, “I like what my real estate agent does.” Or you’ve heard that real estate agents can make plenty of money, and you also want to make plenty of money.
So now you are ready to transition to a real estate career. Not so fast. Don’t let superficial reasons guide you to becoming a real estate agent. The first year can make or break a real estate agent’s future success.
Before taking the plunge and becoming a real estate agent, ensure you get into the real estate industry for the right reasons. Here is some insight into what to expect in the first year, why it’s so hard, and how to be successful during your first year as an agent.
What to Expect As a First-Year Real Estate Agent
After deciding to become a real estate agent and passing your state’s real estate exam, the real work begins. It will take some time to get the type of pay you want and get customers to trust you.
So don’t expect your first year to be easy. The first year will be one of the most challenging years of your career in real estate, particularly if you don’t have mentors who can help. Your first year might not meet all your initial expectations. Additionally, you may not achieve monumental financial success.
During your first year, you can expect to lay a firm foundation that will lead to your success as a real estate agent. If you make it through the first year and subsequently the past five years – two intervals in which most agents quit – you may go on to have a successful real estate career.
Why the First Year as a Real Estate Agent Is the Hardest
You may wonder why the first year as a real estate agent is so hard. It is so hard because you typically work as an independent contractor. This transition will be challenging if you’ve always worked as an employee. Why? You won’t have any income coming in from a steady paycheck. This is one reason this transition to a real estate agent can be difficult.
Another reason the first year is challenging is because of money issues. If you don’t have another source of income to rely on, such as savings, a significant other’s paycheck, or another job, money can become a serious issue. While you will close deals and get paid, it may take some time before real estate income accumulates. After all, closing on homes could take 30 to 60 days. So you may not get paid for several months.
Another challenge in your first year might arise if you don’t organize yourself effectively as a business owner. As a real estate agent, you are an entrepreneur. There won’t be set hours, and you’ll have to determine the flow of your day. This newfound freedom may be too much to bear for many. Some new agents may not do what they need to do to be successful throughout the day. Or they may do too much of what doesn’t lead to success.
Besides money being a significant challenge in the first year, fear of rejection may also intimidate many new real estate agents. If you don’t have previous experience in sales, the enormous amount of rejection may be scary.
15 Tips For Surviving As a New Real Estate Agent
Given the challenges of the first year, how can you pave a path to success? Here are 15 things to focus on as a new agent so that you can lay a firm foundation for becoming a successful real estate agent.
1. Create a Budget
Since money will be a significant issue in the first year as an agent, setting financial goals and creating a budget is a good idea. Remember, you may not get paid for your first deal right away as a brand new agent. However, you’ll still need to pay bills and maintain a stable quality of life. So, it is ideal to create a budget to anticipate how to survive until you start making money as an agent. Keeping an eye on your money will be critical for success in the first year.
2. Develop a Small Business
As a real estate agent, consider yourself a small business owner. Essentially, you will be responsible for your taxes. So, you will have to organize yourself as a small business owner for tax purposes. You can become a sole proprietor or establish yourself as a single-person LLC.
Ultimately, you are responsible for structuring your business and obtaining what you’ll need to help it run successfully. These include health insurance, life insurance, retirement plans, and E & O insurance. You’ll even have to purchase computers, paper, ink, printers, and other critical items necessary to run your small business.
Your managing broker may provide some of these items through their agency. So try to acquire some of the items from them before seeking your own resources.
3. Create a Business Plan
What are your goals for the upcoming years? Who are your main competitors, and how do you plan to attract new prospects? You can answer many of these questions by creating a business plan. This is a great way to put your goals in writing and make projections for your real estate business.
4. Plan Taxes
As independent contractors, taxes won’t come from your paychecks once you start receiving them. You’ll have to be responsible for paying taxes during tax season. So, it is a good idea to keep track of the money you’re earning and the money you’re spending. One plus is that you may be able to write off many of your expenses in the first year as startup costs. Keep important receipts and track your mileage.
5. Communicate Well
A critical aspect of being an agent will be communication. You’ll be talking to people regularly by phone and in person. So you’ll have to be comfortable with your communication skills. Also, don’t underestimate the power of writing skills. These skills can help you market yourself well. It can also help you create enticing listings for MLS or help you create other important marketing material such as brochures and flyers.
6. Network With Other Professionals
It will be critical for prospects to know that you are a real estate professional. But don’t forget how important it is to network with other local agents and real estate professionals. Your clients will see you as a resource for many of their needs. So they expect you to help them when they need it.
For instance, you may instruct your client to stage their home. Do you know anyone who does a good job staging homes locally? Or your client may need home improvement experts to help them fix their homes. Can you recommend someone who can help with gutter or HVAC repair?
As you network with other real estate agents, make sure you also get to know other professionals related to the industry. This will improve our credibility as an agent.
7. Know Your Local Market
In addition to networking, knowing your local market will be in your best interest. Again, the more you are seen as a resource in your community, the more customers will want to turn to you for business. You won’t be just a person who sells homes but also helps customers with closing deals by assisting them to provide the people they need.
Additionally, you’ll be seen as a helpful resource if you know what’s happening in your community. How are the school districts? What is the crime rate? What are some fun things to do? Is your market a seller’s market or a buyers’ market? The more you know about your market, the sooner you’ll become a top-rated real estate agent.
8. Provide Quality Customer Service
In business, quality customer service remains paramount. Even if you are a small business owner running a real estate business, you should ensure outstanding service. This may include going the extra mile for customers and following up on leads regularly.
Remember, you are the brand and have to represent your brand as professionally as possible. Even if you work with a brokerage, excellent customer service distinguishes you from countless other agents within and around town.
9. Use Email Marketing
Believe it or not, email is still a critical way to communicate with prospects and new clients. It is a great way to spread the word and sign up for events, particularly if you provide a strong call to action and proper links. It is also a great way to share your knowledge as a budding thought leader in the real estate community.
10. Take Advantage of Social Media
Again, you are the brand. So, it would help if you did what you could to increase brand awareness. One of the most cost-effective ways to do so is to use free tools like social media. There are plenty of free and paid services you can use to bring in potential clients. Take advantage of these resources to increase your business.
11. Do Something Unique
Besides being on social media, creating a blog or videos to share may be a good idea. The more you are seen as a thought leader, the more prospects and clients will take you seriously. So, discover ways to distinguish yourself as a real estate agent.
12. Focus on Lead Generation
Generating leads is one of the most important activities you will do as an agent. So you’ll need to devote plenty of time to it. You’ll be able to generate leads by cold calling, social media, attending local events, referrals, open houses, and other networking events.
Take all your leads seriously. Just because someone isn’t in the market for a home now doesn’t mean they won’t be in six months or a year. Place your leads in a CRM and follow up on them at regular intervals.
13. Close Deals
One of the most important activities you can do besides generating leads is closing deals. After all, this is the way you make money. It is also the most delicate part of the real estate process since this is where most deals fall apart.
Many deals fall apart during the closing process that may not have anything to do with you as an agent. Sometimes, home inspections or appraisals may not go well. Or underwriting teams may discover red flags with potential buyers. The bottom line is to see your deals through until the end to ensure you get paid.
14. Start Considering a Niche
You may want to consider specializing once you start closing deals and making money. What aspect of real estate gets you excited? Do you like selling luxury homes? Or do you like working with customers who are looking for vacation homes? Perhaps you love helping customers who want fixer-uppers.
Whatever your interest, you may want to focus more on that niche market. This will allow you to have a specific target audience and strengthen your brand.
15. Keep Learning
One of the most important things you can do as an agent is to continue to learn. As a matter of fact, this is a requirement in most states to keep your licensing. Take the additional continuing education classes required to maintain your licensure.
Also, consider exploring other facets of real estate that intrigue you. For instance, you can learn more about becoming a commercial real estate agent or investing in real estate. The more you know, the more you grow.
