Editor’s note: This is the second of a four-part series. See Part 1.
What does it take for a new agent to succeed in today’s shifting real estate market?
On Aug. 28, 2012, the Texas Association of Realtors conducted a survey of 277 broker-owners and managers to determine the predictors of new agent success. Their results provide companies, trainers and potential agents a road map that can help new agents become successful, experienced agents.
Below are six of the 14 key factors for success most cited by the broker-owners and managers who belong to the Texas Association of Realtors.
1. Consistently tries to do the right thing
Without question, honesty and high ethical standards are the foundation upon which real estate success is built. The brokers and managers noted agents who withheld information or who had a tendency to shortcut various aspects of the sales process were much more likely to exit the business.
2. Willing to ask for the business
Many new agents believe that their broker is responsible for giving them leads. Moreover, a large percentage of these agents are reluctant to ask for business from their sphere of influence. Unless these agents master how to generate their own leads, they are almost always doomed to failure. In contrast, agents who understand that real estate is a sales profession that requires sales skills, marketing, prospecting and strong negotiation skills were much more likely to succeed.
3. Has adequate financial reserves
A primary reason new agents leave the business is they lack financial reserves. They enter the business expecting income to start immediately, as it would with a normal job. They fail to realize that it takes time to generate leads and then to convert those leads into closed business. Before an agent starts the business, he or she should have at least six months of living expenses in reserve plus about $2,000 in startup fees. Without these, their odds of success are minimal.
4. Continuous learning mindset
A primary trait virtually all top producers share is that they constantly search for new ways to improve and grow their businesses. The survey respondents reported that the agents who were most likely to succeed sought comprehensive training programs including taking Graduate, Realtor Institute (GRI) and Certified Residential Specialist (CRS) classes early in their careers.
Those who failed generally did the minimum they had to do to meet their licensing and post-licensing requirements. Moreover, they were also much more likely to skip broker- or association-sponsored learning opportunities.
5. Contract mastery
Agents who shortcut their licensing process by doing either an online class or classes that do not require extensive practice with contracts almost always have major issues with explaining contracts to their buyers.
As Cecilia Roberts, vice president of sales for Coldwell Banker United, put it: "Agents need to get out of the auto zone. Their mindset is hurry, hurry, and sign this. They use the auto-fill function on zipForms, have the sellers initial using DocuSign, and then email the offer to the listing agent. They use the technology to cover the fact that they lack an understanding of the contracts."
Many larger firms have addressed this issue by providing their own internal contract training. A different alternative is to have one-on-one mentoring with a trainer, coach or more experienced agent. The challenge occurs with those agents who associate with a firm that lacks this critical training.
6. Full-time commitment to the real estate profession
Occasionally a new agent who works part time eventually has a successful transition into the business. Nevertheless, failure to work a full 40 hours per week greatly diminishes the agent’s probability of success.
As Jim Fite, president and CEO of Century 21 Judge Fite Co., put it: "The No. 1 question that new agents ask is, What does it takes to succeed in real estate?’ The answer is that you have to show up, but the problem is that many new agents think you don’t have to show up in real estate.
"Many agents get into real estate wanting flex time. In other words, no one is going to call you and tell you to come into work. Rather than putting in 40-50 hours of actual work like they may have on another job, they come in at 10, go to lunch at 12, pick up their kids at 3, and do an open house on Saturday for two hours and say they worked six days.
"Most new agents don’t get this and even if they do, they’re not willing to put in the hours that it takes to succeed. The second secret to success is you have to WORK when you show up! In other words, you have to do the activities that breed the results."
For the remaining eight factors related to new agent sales success, see Part 3 on Monday.