This article is designed for the approximately 60,000 new Realtors who joined the National Association of Realtors last year, or who are among the approximately 1,500-1,700 new licensees per month in California. And the who-knows-how-many new licensees in your fine city!
I want to help the new Realtors succeed by outlining foundational advice that can significantly increase the odds that you will have a financially viable real estate business a year or two from now.
“Financially viable” is open for interpretation. One Realtor’s “financially viable” might be a complete failure for another. One new agent might need to net $30,000 to be OK year one, while another might need to net $75,000 and another $100,000.
I have seen new Realtors whose first-year goal was simply six clients, regardless of price point and net income. And I have seen and coached first-year agents who nailed $100,000 in their inaugural year.
You probably already know the cool things about this business. You know that you get to be your own boss (more on that later), that the schedule is flexible (more on that later), that you get to help people with a life-changing event, that there are no financial ceilings — and more.
To increase your chance of success in this amazing business, there are some other things we think you should know.
5 things you need to know as a new Realtor
1. Your real estate license courses most likely missed a few very important things:
- They did not teach you how to find, attract, track, communicate with and convert client leads.
- They did not teach you how to run a business, how to be self-employed or how to be a solo practitioner.
- They did not teach you the subtleties of writing and negotiating the best offer in your city.
- They did not thoroughly teach you how to manage the contract-to-close process.
2. You are in a lead-generation business first, a real estate business second.
3. The work hours can be ridiculous.
Due to the nature of somewhat being on-call all the time, it’s very difficult to ever turn your business off.
Real estate will significantly tap into your evenings and weekends. Prepare your family for this. This will improve with experience.
4. Real estate is harder than you imagined.
More specifically, building a solid and predictable pipeline of client leads is the most important thing to creating financial viability in your new business.
You don’t need one client; you need 100. You are always building this pipeline. It might take two or three years to achieve solid and predictable status.
Until you have a healthy pipeline, your cash flow will be unpredictable. Unpredictable cash flow is stressful for most people. This building process will be harder than you imagined.
5. Most Realtors are not hard-wired to be entrepreneurs.
For the most part, you will be your own boss.
Recognize that you will have to manage your schedule to get the most important things done first, even if those most important things (like creating clients and following up every day) are not the things that truly jazz you about this business.
I like to say there is the sexy part of real estate: the things you love about real estate, the things that attracted you to the business.
And then there is the not-so-sexy part: the grind, the hard work, the systems to get things done at a high level.
It’s not all rainbows, unicorns and elated clients every day. You have to be a good boss to get this all done at a decent level.
Your broker wants you to succeed. Your family wants you to succeed. You can do this by nailing the right things.
Before I got my real estate license in 1999, I had thought about real estate off and on for years — but each time I got somewhat serious about it, someone I respected talked me out of it with some version of “it’s too hard.”
I believe that finally in 1999, my enthusiasm outweighed my doubts, and I was willing to tackle the beast.
It was the best professional decision of my life.