For those of us working the 9-5 grind for the man, real estate can seem like the perfect career to get into. With no boss and no hard and fast schedule, you make your own rules, mapping out your own road to success while doing everything along the way your way.
The truth is, in real estate, as in life, you’ll only get out of it what you put in. Success isn’t about luck and it doesn’t happen overnight.
If you’re a real estate noob, we’re here help you put the right foot forward and sidestep the most common pitfalls so you can fast track your career goals.
1. Poor Financial Planning
People tend to flock to real estate expecting to make quick, easy money without doing the research first. It can take 60 days to close on a sale, and chances are you won’t make your first sale on day one.
Many end up struggling with bills before ever closing a sale. As a result, they end up having to get another part-time job to make ends meet, which in turn affects their availability and focus.
This is the number one reason many don’t remain in the game through their first year.
Solution: Secure Your Future and Understand the Timetables
If you want to take this kind of financial gamble responsibly, the hard reality of entering real estate is that you need to have $100,000 in the bank on average. This variable number should account for at least six months of your total cost of living as well as a marketing and business development fund.
2. Skipping Strategery.
Most new agents are just shooting blindly in the dark and hoping they’ll hit something.
Solution: Identify and Tailor Your Plan.
Do you regularly:
- Review the “Hot Sheet” daily for new listings, sales, price reductions, and amendments?
- Pay attention to sale pricing market trends?
- Discuss the current math and data of your market with your clients?
- Step back to look at different markets to identify what’s hot now, what’s up-and-coming, and what may be on its way out?
Skipping out on these real-time happenings and trends can mean the difference between making sales and missing opportunities.
3. Expecting Success without Goals or Follow-Through
Did you know the average new real estate agent has to talk to 40-60 people to generate enough leads to close one sale?
If your goal is to make 18 sales in a year, you’ll need to talk to almost a thousand people in the first ten months in order to reasonably expect to achieve it.
Solution: Set a Goal, Know Your Numbers, and Track Your Success
If you’re giving yourself 10 months to speak to a thousand people, you’ll need to reach 100 people every month, or 22 per week.
Though the average return on investment (ROI) of talking to people is 1 per 40-60, each person’s numbers will vary. Keep track of how many people you reach each day. At the end of each quarter and year, assess your ROI by figuring out how many people you spoke to per sale.
This is your success-rate number. Track it to see how your ROI improves over time.
4. Skimping on Marketing
The vast majority of new agents aren’t attracting enough clients. They let their fear of rejection stop them from focusing on lead generation, marketing, or prospecting.
Solution: Employ 4 Core Tools of Real Estate Lead Generation
- Your Database: Reach out to the people who know, like, and trust you. Personal referrals are the gold standard in real estate.
- Your Open Houses: Take time to chat up buyers, sellers, and neighbors, even if they seem to have no real interest in the particular house. Every person you meet represents a potential sale.
- Your Geo-Farm: Choose a community with a turnover rate of around 5-7%. Then, stake your claim by learning everything you can about it to become the unofficial subdivision expert.
- Your Online Presence: Advertise anywhere and everywhere you can, from sites like Zillow, Realtor, and Trulia to Facebook ads, Google, and Bing.
5. Trying to Reinvent the Wheel
Striking out on your own is daunting and it’s important to have a support network of other realtors to look to. But remember: like attracts like. If you’re spending the majority of your time with other rookies who haven’t sold a house yet, it is likely that you won’t either.
Solution: Find and Follow a Successful Role Model
Finding someone who is newly established and enjoying success is imperative to your own. Use your best observation skills to dissect how your role model thinks, plans, talks, walks, and acts. If you do what they did, chances are you’ll get what they got.
6. Fear of Mistakes and Rejection
We get it. This is your business and your professional image is at stake. You want to save face and make a perfect impression.
However, every successful agent has been where you are and made their share of mistakes. Don’t be afraid of rejection or missteps. The ability to learn the lessons and do better are what got the top-tier agents to the top.
Solution: Pitch the Hardest Sales First and Learn from Mistakes
The school of hard knocks isn’t for the weak, but it will make you strong. Getting out there and making as many mistakes as you can is one of the best noob strategies for gaining experience and expertise in the real estate game.
Try putting yourself in the hardest sales positions you can find. Call the “For Sale By Owner” or “expired listings” sellers and practice your negotiating skills by trying to convince them to give you a shot. You’ll get rejected a lot, but you’ll also hear all the counter-arguments and learn in a hurry what works and what doesn’t.
This is how you gain experience and wisdom.
7. Retaining a Workweek Mentality
Many people turn to real estate after having become accustomed to the typical Monday through Friday 9-5 grind. Having to work at the convenience of your clients can be a hard adjustment.
Solution: Be Prepared to Work Nights and Weekends
Shift your perspective from having a job to representing your business. All the money to be made in real estate happens before 8, after 5, or on the weekends. If you aren’t available when your clients are, don’t expect them to stick with you for long or recommend you to their friends and acquaintances.
8. Forgetting Your Game Face
Years ago, the National Association of Realtors discovered the vast majority of new agents were entering the game with zero experience or background in sales, negotiating, or marketing.
What’s more, over time in the field, many of them never took the initiative to develop those skills or worked on their personal brand to establish a sales persona or script.
Solution: Develop Your Personal Sales Swagger
Have you ever watched a salesperson and thought, “Wow. That is one smooth operator?” This effect likely didn’t happen overnight, but instead was cultivated through years of practice.
Put the work in on your sales pitch. Figure out what to say and what works for you. A successful approach for one personality isn’t going to fly for everyone. Try out various scripts, take note of how they were received, and tweak as necessary.
Learning the objections and counterarguments to your sales pitches helps you allay fears and put your clients at ease as you negotiate the sale.
9. Allowing Yourself too Much Freedom
No one likes feeling tied down. For many, one of the major calling cards for getting into real estate is that it offers a flexible schedule. However, not establishing your own set schedule and routine is one of the biggest predictors of failure.
Solution: Be Your Own Tough Boss
Schedule in your tasks and responsibilities, establishing a predictable routine to get your daily tasks out of the way in the morning. Block out time in your schedule to regularly:
- Talk to people
- Make calls
- Send direct mail
- Attend appointments
- Meet with your broker
- Conduct market research
- Work on advertising campaigns
Make sure to hold yourself accountable for following through on your plans. Discipline is key.
For instance, we mentioned the goal of selling 18 houses a year, which typically tracks to 100 calls per month or 22 per week. If you don’t schedule the time in your routine to make those calls, you won’t reach your goal.
Setting aside routine time blocks the same time each day allows these tasks to become habits.
The Real Estate Game: Are You Interested or Are You Committed?
As many come to this career field after years in various other industries expecting to “take it easy” while “striking it rich,” they are in for a rude awakening.
The real estate racket today is more competitive than ever before. If you aren’t ready to put in the work, expect to get left behind. The difference between just being interested in a real estate career and being committed to success lies in being willing to do whatever it takes.
Success in the field involves much more than just making calls, showing homes, creating plans, and learning the script when it’s convenient for you.
A career in real estate can be extremely exciting and rewarding, but be ready to throw the notion of convenience out the window and commit to being there for your clients and prospects.