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Real estate is an enjoyable and lucrative career for many successful agents. Helping a family move into their dream home or finding the perfect location for a new business can be very fulfilling. However, like starting any business from scratch, you must focus on certain activities like prospecting and lead generation before your business takes off. If you are thinking about starting a career in real estate, make sure to understand what this career path entails and how it may impact your lifestyle. Here are a few important points to consider:
One of the first and most important steps in becoming a real estate professional is researching brokerages and, if possible, chatting with other agents who work for them. From the outside, the brokerage may just seem like a name on a sign, but in reality, the choice you make will impact the trajectory of your business path.
Some brokerages are less structured in how you build and run your business while others have certain requirements such as mandatory floor duty. They also differ in the amount and type of training they offer to new agents. For new agents without any experience, a training and coaching or mentoring program offers lots of value. Here are a few questions you may want to ask when interviewing brokerages:
Many brokerages pride themselves on their training programs for new agents and use this as a way to attract new agents to join their company. They may also assign a seasoned agent to guide you through the process until you have a few sales under your belt.
There is a lot of paperwork involved with selling houses. Paperwork and recordkeeping is required for every profession. It could save you a lot of time to have a team of administrative assistants to help you navigate the paperwork. They can also help you with things like scheduling open houses and uploading listings to the MLS.
New agents especially may prefer to be assigned floor duty as this can be a good way to get leads, whereas others prefer to have more autonomy over their schedule.
There are many technological tools and services that real estate agents use that make it easier to run your business. Many require subscriptions and can be costly, especially for a new agent. It’s important to inquire about all of the resources the company with whom you are interviewing has available along with any associated costs.
Brokerages that invest in local marketing and have high-end websites that generate new real estate leads. It’s a good idea to ask the brokerage about it’s marketing program and advertising resources. Once you begin listing properties, your signs will also generate leads for you. Many companies also have relocation programs from which leads may come. It’s important to enquire about all of the ways the company generates and distributes leads.
Something new agents often forget from their pre-license training class is that all commissions are earned in the name of the brokerage. Thereafter, a portion of the commission is paid to the agent after the transaction closes. Depending on the brokerage’s commission program, the amount paid to the agent may increase as the agent lists and sells more properties.
Other brokerages allow the agent to retain higher percentages from day one and charge a monthly fee to offset expenses. This is sometimes referred to as a desk rent or 100% program. These programs are usually better suited to experienced rather than new agents.
Brokerages have physical locations where you can set up an office and meet your clients. They typically also have computer rooms and office equipment that you can use to further your business.
As more offices go paperless and many functions are performed online, agents may not need their own dedicated space within the brokerage office. It’s important to ask if the brokerage provides you office space right off the get-go or requires you to have a certain volume of sales. Also inquire if the brokerage assesses any other fees for office space and company services.
If you need help finding a brokerage, NCI can help. Reach out to us at 586-247-9800 or send us a message through our website for more information.
Nearly all real estate agents work as independent contractors for their brokerage companies. Since these agents are not employees of the brokerage, they do not receive employee benefits such as paid time off, health insurance, or reimbursements for other business expenses.
There are certain costs associated with building and running a real estate business. It’s a good idea to know these costs and be prepared before you launch your career. Here are a few of the costs associated with being a real estate agent in Michigan:
It is important for new agents to remember that all sales and commission-based businesses have costs associated with them. Real estate is no different. When you examine these costs in light of how much money you can earn, they are very affordable. Your brokerage will be able to help you estimate the costs and when you interview with them.
It’s also important to keep in mind that most real estate business expenses are tax-deductible. Make sure to keep track of all of your business expenses to be able to accurately deduct them from your taxes. Real estate agents should hire an accountant who is knowledgeable in helping independent contractors with their taxes to ensure maximum tax benefits.
Real estate reality TV shows create the impression that a real estate agent’s job mainly consists of touring beautiful houses with happy, wealthy clients. However glamorous this appears on TV, it doesn’t accurately reflect reality. Residential real estate agents actually spend a lot of time searching on their computers, showing multiple properties to undecided buyer clients, and driving to and from appointments. Time is also allocated to researching through hundreds of listings, preparing paperwork, keeping up with past and current clients, and generating new business leads. Once a purchase agreement is accepted, agents still have quite a bit more work to do.
Sellers, and buyers to a lesser degree, rarely understand how much work is performed behind the scenes to bring a transaction to a successful closing. Further, this work sometimes does not result in a closing and earned commission. Overall, however, real estate makes for an exciting and rewarding career. No two clients, properties, or transactions are the same.
One thing all successful agents have in common is the fact that they treat their real estate business like a business. That means having time blocked off for prospecting and lead generation, making listing presentations to potential sellers, scheduling buyer appointments with potential buyers, marketing properties, and having a methodical way to follow up with everything. If you are serious about becoming a top-producing agent, set the appropriate goals, and devote yourself to the dollar productive activities described above.
In real estate, you generally do not make money until you list a property that another agent sells, or you sell another agent’s listing. The process of getting started can take several weeks to a month or so. As noted earlier, new agents need to learn their company contracts, learn how to integrate the available technology, generate their own leads, and process the transaction to a closing. That’s why training, coaching, or mentorship is so important to a new agent.
As it pertains to generating leads, it’s generally best to start by building what’s called a center of influence list. This list includes your family, friends, and others you know on a first-name basis. Next, you can establish a geographic farm. These include the homes located within a several-block radius of your personal home. What’s great about a center of influence list and the geographic farm is that they are all people with whom you are already familiar. Even if you are not personally familiar with every owner in your geographic farm, you share a common bond and values as neighbors.
While you work on your marketing and setting up your transaction pipeline, do not forget to invest in yourself. This is a great opportunity to take some time to learn the market and educate yourself on all the different aspects of the business. If you show people that you are an expert in the local market, they will be more likely to come to you for their real estate needs. This should all be consistent with the new agent training and career resources that your brokerage offers.
Like starting any new business, a career in real estate takes time and effort. Getting over the initial hump may seem tough, but being a real estate agent can be a very rewarding career once you start making sales. As your happy clients refer you to others year after year, you will continue to grow a strong repeat and referral business.
The most important thing you can do for a successful start in real estate is to ensure that you have a solid foundation of knowledge. Begin your career on the right path with NCI’s comprehensive real estate licensing courses. NCI offers in-person, live webinar, and on-demand self-paced courses to fit your schedule. Our instructors have decades of real estate experience and specialize in real estate licensing in Michigan.
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However, fulfilling the promise of a successful real estate future requires the right choices at the right times. The most important decision to make right now? Where you’ll begin — or continue — your real estate training. NCI Associates, Ltd. remains your intelligent choice for Michigan Real Estate Classes.
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