Industry analysts estimate that somewhere between 75% and 90% of all real estate agents fail within the first five years of starting their real estate career. And everyone agrees that the first year is the hardest.
If you can survive your first year, your chances of building a successful real estate career improve substantially.
So we want to help you survive your first year of real estate. Here are ten tips to help you make the most of that first year. Follow all ten, and you’ll do more than survive - you’ll thrive in your first year!
1. Get Your Mind Right
There are a few things you need to wrap your head around before you can build a successful real estate career:
- Real estate is substantially harder than it looks. It’s highly competitive and requires you to wear many different hats (often at the same time!).
You’re an entrepreneur now. You don’t have the consistent income, benefits, and comfortable hours of a 9-5 employee. You have to sell to make any money, figure out your own benefits arrangement, and you’ll need to work evenings and weekends to accommodate your clients.
It will take time to see the results of your efforts. You’re basically building a new business. Expect to invest some time and money on the front end with no pay-off for about six months.
These are the realities of the industry. New agents often get so excited about their new career that they gloss over some of these hurdles. To survive your first year of real estate, you need to accept these realities and embrace them.
2. Choose Your Broker and Your Mentors Carefully
Your Broker is more than just someone to hang your license. Your first Broker can set the tone for your career.
Your brokerage becomes your initial network of colleagues. You’ll first mentor will likely come from that group, so it’s important to choose a brokerage of high-quality, high-producing agents.
And don’t underestimate the importance of a mentor early in your real estate career. They can offer invaluable advice, guide your early transactions, and introduce you to a greater network of industry players.
3. Create a First-Year Budget
Many agents fail because they can’t make enough money in that first year of real estate to pay their bills. They’re forced to take on part-time jobs with a steady paycheck. And that leaves too little time for real estate.
Don’t let that happen to you! Create a first-year budget so you’ll know, in advance, how you’ll make ends meet during these early days.
First, how much income do you need to live on each month? Common wisdom is that it takes new agents between 3 and 6 months to see their first paycheck. So you need to either save money to support yourself for those first few months or have another stream of income that still allows you to focus on real estate.
Then you also need to plan for upfront expenses like marketing, business cards, and any brokerage fees and membership dues. Don’t forget to include these costs in your budget.
4. Learn Everything You Can About Your Market
To gain a competitive edge, you need to know more about your local market than the other agents. Buyers and sellers expect you to know your stuff, even if you’re a new agent. Here are a few areas to focus on:
Review your hot sheet every single day. You need to know the new listings and see what’s gone under contract. You need to know about price reductions. And you need to know what’s hot currently (are there certain price points, neighborhoods, or home sizes that are selling like hotcakes while other homes sit for months?). Also, watch for trends. Compare this month’s number of listings, average list-to-sale ratio, and average days on the market to last month’s numbers. And be ready to rattle off some of these numbers and your analysis of them whenever someone asks, “Hey, how’s the market?”
You need to know your area like the back of your hand. Know how to get to every single listing without looking. Using GPS in front of clients (for anything other than finding the quickest route around an accident) immediately reduces your credibility.
Lastly, you need to get to know the other agents, lenders, escrow agents, and title reps in your market. You never know where a referral or other opportunity might come from. Get yourself out there and start building relationships with key players in your area.
5. Find Your Niche
Casting a wide net for clients sounds like a good idea. But then you’re competing with every other agent in your entire market. If you can focus on a specific niche, the client pool won’t be as large, but you’ll have a greater chance of winning business.
As a new agent, you’ll probably never beat out every other agent in your market. But if you’re one of only a few agents in a niche, you have a shot at beating out those other few agents.
When competition is high, you’re always better off choosing a niche and focusing your efforts. Become the go-to agent for your niche.
6. Set S.M.A.R.T. Goals
S - Specific. Lay out the details of your goal. M - Measurable. How can you measure your success? A - Attainable. Try to find the balance between stretching yourself but still being realistic. R - Relevant. How does this goal tie into the big picture of your life? T - Time-sensitive. Give yourself a firm deadline.
The obvious place to start is with a sales goal. For example, you could set a goal to sell 6 houses in your first year of real estate. It’s specific, measurable, attainable, relevant to your career, and has a time element since the deadline is the anniversary of your first day in real estate.
To give your SMART goals extra power, write them down. The act of writing down your goals creates a sense of commitment. And seeing your goals every day will keep them top-of-mind.
7. Create an Effective Routine
If you want to meet your goals, you need to create a daily routine designed around them. Your routine will become a habit, and once you’re consistently and automatically practicing effective habits, nothing can stop you!
So design your routine with those goals in mind. What time do you need to wake up? When do you need to be in the office? When can you squeeze in some exercise? What will you eat to keep you feeling energized? How much time will you need to spend prospecting every day?
Which leads us to Tip #8...
8. Prospect. Every. Single. Day.
If you want to earn a consistent income, you need to consistently fill your pipeline with new leads. Remember, it can take about 3 months to go from landing a client to getting a paycheck. You can’t stop prospecting when you have a few clients because then you’d have nothing in your pipeline once those deals are closed.
You can cold call, door knock, answer questions in local Facebook Groups, reach out to people in your sphere, or chat with a stranger at Starbucks. There’s no right or wrong way to meet people. Just get out there and meet them and talk real estate. Every day.
9. Build Your Unique Brand
Don’t allow yourself to be a walking billboard for your broker. You need to focus on building your own brand so you’ll always have the option to branch out on your own. Rather than being tethered to your broker for your entire career.
The best way to start building your own brand is to have your own website and social media accounts. The little page on your broker’s website will never bring you leads. But with your own website, you can control your message, build a following, and even rank in Google results when buyers and sellers look for local agents online. And you can actually build your own website for just a couple hundred dollars.
By the way, you’re building your brand, not just in the minds of buyers and sellers, but also in the minds of other agents, lenders, escrow agents, and title reps. Make sure you’re building a solid reputation all around. Always be respectful, diligent, and reliable.
10. Hone Your Sales Skills
Real estate isn’t just about showing homes. It’s about sales, negotiation, marketing, and relationship-building. So as a new agent, you should be setting aside time every day to work on your sales skills.
There are plenty of useful books, blogs, and podcasts that dive deep into the art of real estate sales. Make a habit of listening to those podcasts in your car, reading those blogs while waiting for your buyers, and reading a few pages of a book in the evenings. You’ll be amazed at the sales techniques you’ll pick up!
Your first year of real estate may be tough. But you’re tougher!
Put these ten tips into action to survive your first year of real estate and get yourself on track for a satisfying and successful real estate career.