I hear this from friends quite often… “I want to get my real estate license. I think I’d make a good real estate agent. I like looking at houses.”
While the meat of the business is far more than looking at houses, the truth is that most agents fail because they can’t find the people who want to look at the houses – or at least not the ones who wish to purchase them and are ready, willing and able.
Sadly, this agent will not likely make it. You see, the brokerage hired you to find business… not the other way around. And the brokerage was right when they told her to talk to the people she already knows – Are they willing to hire you? Refer you?
In this market, I know I would not hire someone who is new. Buying or selling a home a HUGE investment decision and very complicated. When you hire a real estate agent, you’re relying on their expertise. Expertise they got from doing business. In some cases a new agent may not know as much as their consumer. It takes years and years of experience.
Luckily, when I entered the market as a new agent, I was not new to the business – I’d been working in real estate for decades, and so the transition was easier for me…. but it still took adjusting. I wasn’t used to having to ask for business or referrals either. My advantage was once I had the “lead” I had the experience to justify them hiring me. But what if you were a home maker or negotiated labor contracts for a living before deciding to get a real estate license? Not only are you not used to having to “find” your next client, but once you have them you’re not really sure what to do.
Sure, some people get lucky – and I am often surprised by some of the people that make it in this business. It can defy logic. Maybe that will be you. But if you’re that lucky, maybe you should just play the lottery.
Bottom line, here is my advice to anyone who wishes to get into this business… You are starting a new business, you are self employed, you are not getting a job. It is not the same. And, the projection on what you should make the first year… Here’s how you figure it out:
How many people do you know RIGHT NOW who will buy or sell a home in the next 12 months? Of those, how many people will hire you to help them? Multiple that number by 75%, and those are the clients you’ll have this year. Guesstimate your income per transaction based on sales price and the normal commission charged in your area, and then take out the costs for your broker, taxes, and expenses. (Generally an agent gets to keep 30% of their gross earnings.) That is what your projected income will be in the next 12 months. Are you excited? Probably not so much, but it’s the truth that no one else wishes to tell you.
Yes, marketing helps, but the cold calling, bulk mail, door knocking, etc. can only do so much. It’s a drop in the bucket, because everyone who talks to you will not hire you. Some will. Many won’t. Once they do, if you do a great job, then they will refer you and use you again. That’s why it’s worth it. It’s never about today’s sale. It’s always about tomorrow’s.
Having shared all of this info, I have a message for my friends, family, and clients: I hope now YOU realize why I need your referrals, why I need your business, why I work hard to try to be the smartest, best, most loyal, most helpful, most competent real estate agent you know. If I have managed to establish that impression in your mind, take a moment to think about who you know that needs my help, and then connect me. I will be forever grateful. Without the support of my friends, family, and past clients, I would have no business. Thank you, thank you, for your continued support.
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