The real estate industry is an exciting industry. It is an industry that carters for one of the three basic needs of man: shelter. A good shelter is a requisite to a good living and a productive society. It is also a very lucrative industry that rewards its stakeholders with massive returns.
There are many different players in the real estate industry—property managers, publishers, builders, banks, and government agencies, to say nothing of buyers, sellers, and renters. However, the real movers and shakers are the intermediaries, those who constantly move between and communicate with these players: agents and brokers.
The Intermediary Men:
The real estate agent is the workhorse of the industry. He’s a salesman one moment, a buyer’s advocate the next; he’s an analyst, an auctioneer, a consultant, a negotiator, and a marketer; he occasionally performs the services of an appraiser and a loan officer; he accommodates his clients on nights and weekends, and often works well beyond the official stipulated working hours.
Basically, a real estate agent does a little of everything, and for that, he’s paid a modest commission (provided, of course, that he closes the deal). It’s no wonder, then, that so many agents cycle in and out of the industry. It’s also no wonder that demand for their services remains high even in a slow market.
Overwhelmed? Don’t be: this guide will tell you everything you need to know about the challenges and essentials of being real estate agent, as well as important tips to help you get off to a strong start.
1. Real estate is not a hobby: it’s a business.
In recent years we’ve seen some new trends when it comes to the consumer’s relationship with the real estate industry. More than ever before, the average person has access to the kinds of statistics, market analyses, technology, and expert opinions that were previously reserved for people who actively made their living as a real estate agent or broker.
Consider, for instance, the guide you’re reading. Before the Internet, much of this information would only exist in the mouths of working agents or in estate agency textbooks. Consumers had little need for this information because they trusted their real estate professional to know it.
Today, agents are blabbing all over the blogosphere, even making a buck by telling consumers how to do their jobs. “How to Make Money in Real Estate: Five Easy Steps.” Consequently, some seem to think of becoming a real estate agent like taking up a hobby, something to occupy your down time and earn you quick cash at the same time.
But most hobbies are cheap, and even the expensive ones are about the sheer enjoyment of the activity. With a hobby, you’re allowed to be careless because you don’t have anything to lose. Neglect your herb garden for a few days? No big deal. Don’t play your guitar for a month? It’ll still be there when your fingers get the itch.
Real estate, on the other hand, is a business. It’s about money, and as the market has shown in the last few years, when you get careless in real estate, you stand to lose a lot of it. As an agent, you’re an independent contractor, which means it’s up to you to manage your own business. Any agent who picks up your slack isn’t handing it back to you.
Finally, hobbies are personal, while real estate is professional. Typically, only the people with whom you choose to share your hobbies know about them, which means they don’t have a huge impact on your public image. (Unless, of course, you’re still collecting Beanie Babies).
But since your conduct as a real estate agent takes place in the professional world, it has much a longer paper trail. Pretty much anyone can find out about it. Fail to satisfy a client, and you’re telling her and everyone she knows that you’re unreliable—which can have serious ramifications for other areas of your life.
None of this means you shouldn’t enjoy working as a Realtor. On the contrary, you’re not likely to be successful if you don’t. But the best agents are those who marry the pleasure they get from their work to an understanding that it’s, well, work.
2. Leads and listings, but not necessarily in that order.
No matter what business you’re in, selling is hard. As a real estate agent, however, the challenge is even greater because repeat customers are few and far in between.
Homes, after all, are not electronics or fashion items. They’re not designed to be replaced after a year, nor do they become obsolete. People buy homes with the intention of staying put. In a perfect world, your clients won’t need you again for a long time.
So how do you grow your business when demand for your services is limited? By working both sides of the real estate equation. In the old days, agents worked exclusively with sellers, listing their properties for sale and rent. Back then, your job was to get the word out about a seller’s property and attract buyers. The more listings you had, the better off you were.
Today, however, it’s also common to work with the buyer. In this scenario, success is all about leads, people who are interested in buying a home. Once you’ve found a lead, your job is to turn him from a prospect to a customer by helping him secure the home he’d like to rent or purchase.
This usually means you’re a matchmaker, connecting buyers with listings your agency already has. You could also be an advocate, helping them browse someone else’s listings. In either case, the arrangement is basically the same: agents use their experience to ensure that buyers don’t get screwed. Instead of selling a property, you’re selling your expertise.
So which is more important, leads or listings? That depends on your location. But regardless of the figures, it’s crucial to keep a close eye on both. In a difficult market and a changing industry, the best path to success for an agent is to be adaptable and willing to work with sellers and buyers. Concentrate solely on one, and you’ll find yourself struggling keep your business afloat.
3. Relationships are everything.
Every agent is glued to his smartphone or laptop screen these days. However, it’s important to remember on the other side of all those zeroes and ones are real people, and they’re the ones who keep your business going.
Relationships are your bread and butter—and when we say that, we’re not talking the little dinner rolls you fill up on before your meal arrives.
To understand how to maximize your relationships as a real estate agent, start by asking the basic questions: who do you know, and who knows you? The answers will go far in revealing the extent of your sphere of influence, the collection of people for whom you and your business have weight. The greater your sphere of influence, the more of a magnet you become for prospects—and the better your chances of turning them into customers.
The cliché goes that real estate is all about location, location, location. This isn’t just about inventory: it’s about involvement. To maximize your business, you need to participate in your community. Use a service like Hutbay to know agents in your network and connect with them. Become a member of real estate associations like the Association of Estate Agents (AEAN), etc and attend their meetings. Get exposure in the flesh, and make sure people know what you do.
By showing you’re interested in the life of your community, you demonstrate that you have a personal stake in all the business you do as a real estate agent. You should also treat everyone you meet with the same courtesy and attention, no matter who they are or what they can do for you—after all, you never know who may become a customer.
Knowing and being known by as many people as possible is crucial, especially when there aren’t a lot of prospects to go around. But while quantity is good, quality is even better. Visibility is great, but if your only goal is to get everyone and anyone on the hook, knowing everybody in town will actually work against you. Your reputation in your community greatly influences your trade. People obviously want to work with agents they trust.
The most sustainable business model is one in which your transactions with others are always mutually beneficial. Real estate, is about making money; but focus too much on your profit margins, and you’ll find you have fewer and fewer customers looking to hand theirs over.
Finally, once you’ve established your relationships, it’s vital to keep them up, whether or not they’re making you money right now. Follow up with recent customers to see how they’re settling in. Distribute an email newsletter to all your clients. Send personalized notes and birthday cards. Use social media and maintain a presence online. If you feel like you haven’t spoken to an old customer in a while, send them an email to ask how they’re doing. The gesture only takes a minute or two, and it can pay huge dividends in the long run.
Each contact you make has a value, and each customer has a lifetime value. Lose contact with your prospects, leads and customers, and you’ll be squandering your greatest asset.
Continue this article on Part 2: Guide To Becoming a Real Estate Agent – 2