8 Things You Need to Know BEFORE Becoming a Real Estate Agent
If you’re looking for a fulfilling and exciting career, with every day different than the last, you might be thinking about becoming a real estate agent.
There are over 3 million people across the country with active real estate licenses, all working to help their clients buy or sell a property.
Before diving headfirst into the real estate industry, there are a few things you should know and consider.
Build your database right now (or as soon as possible)
Relationships are at the heart of the real estate business — and who you know can be the jump start to launching your career as a real estate agent.
From your hairdresser to your old elementary school teacher, everyone can be a potential client that opens the door for future transactions.
If you’re getting started in real estate, you should also create a database to manage and grow your network of contacts.
Your database, otherwise known as a client relationship management system (CRM), is where you can manage, organize and build a strategy around your current network.
It serves as a great starting point for outreach and often can serve as the “home base” for your business.
While there are multiple strategies in place around managing a database, the key is to simply start one.
As you add contacts and grow your business, you can do in-depth marketing campaigns, reach out regularly, and ensure you’re staying in touch with past clients.
Go into the career with a business plan
When you set a goal, it’s essential to create a plan on how you’ll achieve it. By crafting a real estate business plan early in your real estate career, you’ll have a guide to achieving your goals and navigating your career's early days.
Having a plan in place can help you grow your business, stay up to date on current market trends, and provide you with measurable metrics to track over time.
A real estate agent’s business plan is specific to your individual goals and should also outline your personal mission, strategies, and guiding principles.
This is an excellent place to identify your target client and how you’ll reach them through your marketing and communication.
The document can serve as a blueprint for your business growth and ensure you stay focused on your goals without getting distracted by lower-priority items.
You are the boss
If you’re used to working in large companies or big teams, you might be surprised when you become a real estate agent and learn you are suddenly your own boss.
The prospect of running your own business is why many get into real estate, but it can also be intimidating if you don’t know what to expect.
For those ready to take on the challenge, you’ll get to work your preferred hours, set your own goals and call the shots.
Keep in mind though this also means having to do the cumbersome aspects of running a business like taxes and other administrative work.
Your paycheck is based on your productivity
Real estate agents don’t make money hourly or annually like most professions. Instead, real estate agents make a commission off of their sales and transactions, usually anywhere from 2-3% of the sold home’s value.
Because of this structure, your paycheck as a real estate agent is determined by how many transactions you complete.
On the one hand, this means there is unlimited earning potential as a real estate agent. On the other hand, it means that your income can be unpredictable and vary over time.
Have money saved up before or an alternative revenue stream
Since your income is commission-based, experts recommend that new real estate agents set aside some money while starting their careers.
When you factor in the expenses needed to start and the nature of unpredictable income, it can be easy for new agents to run through their savings quickly.
One way to prevent this is to ensure you have a plan for bringing in a regular income — whether through another job or by building a small nest egg to get you started.
A lot of the transactions in real estate are done on weekends or after hours, leaving time during the day for a part-time job until your real estate commissions start to have an impact.
You have to put yourself out there
A big mistake that new real estate agents make when they start in the industry is not telling everyone that they are a realtor.
These “secret agents” don’t disclose that they sell real estate and, in doing so, miss out on opportunities to grow their network and their business. As previously mentioned, working in real estate is a relationship business.
Real estate agents have to be engaged, personable, and always on the search for the next deal.
Why is it so important to put yourself out there? Word-of-mouth marketing is key to helping grow your business.
When one person in your network refers you, you are cheaply getting new business and a thumbs up from a valuable client.
Never stop learning new things
The real estate market is constantly evolving, and as a real estate agent, you’re expected to know all about it.
It’s essential to stay up to date on the industry by taking ongoing training courses and workshops after receiving your license.
Investing in your continued education will ensure you’re informed for your clients and able to speak to the latest industry requirements.
The best real estate agents never stop learning — they’re always working to improve their knowledge to better serve their clients in this ever-changing industry.
You aren’t alone
While much of real estate is a singular business, you are not alone. The real estate industry is vast in its reach, and the amount of resources available to agents is limitless.
Your closest resource throughout your career will be your broker or sales manager, that will sponsor your license.
This person can act as a mentor and guide you through the transaction from start to finish. Also along the way are coaches and other agents that you can work to learn from and build your business off.
Final Thoughts on Becoming an Agent
Becoming a real estate agent is an incredibly rewarding career, but also requires hard work and determination to succeed.
It’s important to understand what you can expect early on in your career.
Having the proper knowledge and expectations before diving headfirst will help prepare you to be the best real estate agent you can be!
TL;DR: When you become a real estate agent, you become an entrepreneur and how much you get paid is based on how much you produce. Nobody is calling the shots for you, that's something YOU have to do. Make sure you understand this and are comfortable with it BEFORE you become an agent.