I don’t think I’m really all that unique. Like a lot of people who entered the real estate profession in the mid ‘90s, I had to stumble through a lot before finding my way. Training protocols certainly weren’t what they have become today and the hiring process was far less transparent. Don’t get me wrong, no one misled me in any way… they just didn’t volunteer too much in the way of expectations or insight into what the business really was.
I’ve often lamented with my peers about what I wish I’d been told before I started. As a result, when I’m interviewing prospective new sales people, I make it a point to paint the full picture – warts and all.
I did a little thinking and came up with about 22 things that I wish my broker had told me before I started in real estate. What would you have added to this list?
The actual cost of running my real estate practice.
When I first met with my broker, I had zero notion of what it meant to be a real estate professional, let alone the huge costs that go along with it. Something the public isn’t often made aware of are the ongoing costs associated with simply maintaining a real estate license. Things like: license fees, insurance, advertising and marketing, ongoing education, association fees, franchise fees, travel, communication, technology expenses, accounting, legal fees, tax filing (HST and income taxes), memberships in three levels of organized real estate, convention expenses, etc. Honestly, if I’d been told about all of these, I may have considered a different career path. That doesn’t mean I regret the choices I’ve made, but I do wish I’d known what I was getting into.
The need to keep my pipeline full – constantly be prospecting.
New entrants to the real estate business often have no idea of the need for constant prospecting and the ever-present gnawing hunger that comes with not knowing where your next deal will come from. I’m going out on a limb and saying that most new licensees will be shocked at how much time it really takes, during your first three years in particular, to build a reliable and profitable database.
Expect that not every other agent out there will be your friend.
As much as we need each other and we really do work to keep excellent relationships with our colleagues and competitors, human nature is still a thing. We simply cannot get along with everyone. Not only that, as you’ll find in every industry and profession, there are those that really don’t care to get along with everyone. There are those that simply couldn’t care less whether they build long term positive relationships. The dirty little secret is that there are some real jerks out there, so watch the shop talk in private conversations and in meetings. You never know when it’ll come back to haunt you. Please don’t misunderstand me; the vast majority of real estate professionals are wonderful people who would give you the shirt off of their backs if you needed it. Just be sure you can trust the person across the table before you spill your guts.
There could be a significant time lag before I get paid.
Rather than fill my head with ‘what-ifs’ and ‘sky-is-the-limit’ ideas, I wish I’d been told that it takes time to start earning any significant money in real estate. Sure, tell me the good stuff and show me how a properly funded and motivated sales rep can earn big bucks, just be sure to relate the realities too.
Let’s look at the typical life cycle of a residential transaction. I’m going to ignore the current market conditions, which are anomalous, to say the least. In a balanced market, it would normally take about 30-60 days to find a suitable home for a buyer client. I know I’ve done it faster, and sometimes it took far longer, but this is a good baseline. So 30-60 days to find and negotiate a firm transaction, then, generally speaking, another 30-60 days to close the transaction. Then, cheques have to be cut, couriered, processed, and a final paycheque cut for me, the REALTOR®. Total time about 60-130 days. So, to recap, you get your license, the stars align, you find a buyer immediately, you negotiate a great deal and then wait to get paid in, at best, 75 days but more likely 4-6 months after you start! Yes, that’s right, you can expect to work for 4-6 months without earning dime one. In fact, the opposite is happening, you’re SPENDING money that whole time! I really wish someone had told me about that! By the way – it took me about 3 months to get my first listing, a duplex that never did sell, and another two months for my first deal. That first deal earned me a whopping gross commission of $630! Show me the money :)
Listen, there are exceptions to this rule, I’ve hired a few over the past few years and they are amazing, but they are just that; exceptional.
You need a thick skin and you need to learn to expect rejection. A lot of it.
This is a business built on rejection. Really. If you can’t learn to love rejection, or at least to live comfortably with rejection as your constant companion, then this might not be for you. Nobody told me how horrible I’d feel when family members and close family friends would say no to me. It hurts. Nobody told me that 90-99% of people I approached would not want to talk to me. The lesson is that you can’t take it personally, the timing simply isn’t right for those people. Ken Clark was a fantastic, old-school (in a good way) Realtor that worked at our company back in the ‘90s. He taught me the invaluable phrase, ‘Next.’ Ken’s perspective was that a ‘no’ meant one less person he had to talk to get to the next ‘Yes’. Learn to enjoy hearing, ‘no’, and you’re on your way to success.
Say it with me, “Next!”
You need to develop discipline – also known as clear priorities.
Goal setting; the bane of the modern business world. Everybody knows that they should be doing it, but a surprisingly small number of people actually write down clear goals, also known as priorities. These can, and should, include: personal and financial expectations. When I started out, I made the poor assumption that I just needed to put in the time and my dreams would come to fruition.
What I wish I’d been told was that, without a clear sense of direction, your life will happen by accident. Dreams are not goals until they’ve been written down and had time constraints placed upon them.
You only have three jobs. Generate leads. Convert leads. Get contracts signed. Everything else is secondary.
There are SO many different things you can do on a daily basis. There is, and always will be, another shiny new gadget or social media tool every few seconds that can suck up your time and keep you from the things that really matter to the growth of your business. Knowing that you have three core mandates: generating leads, converting those leads, and getting contracts signed, keeps you focused. Now, don’t misunderstand me – this kind of pure simplification of what we do is extreme and doesn’t address the essence of what we do which is provide premium services to our clients, but at the end of the day, the business of real estate really is this simple. Keep these three tasks top of mind and every time you have an opportunity to take on another activity ask yourself if it fits one of these three. If not, then perhaps you should reconsider going forward with it.
Time management is important for your survival and your sanity. Your time will often be wasted unless you get very good at qualifying prospects (and even then, you can’t avoid it all).
This one is a bit of a misnomer: time management. I’m of the belief that you can’t really manage time; it’s going to pass with your ‘management’ of it. All you can really do is control your priorities and, most importantly, the tasks you choose to take on. To that end, I’d rather use the term task management. This is true for every task you do, and in particular, qualifying your prospects. Anyone can lead generate. Really, it’s difficult and can be time consuming, but it’s simple. Talk to enough people and some of them will tell you that they are actively considering buying or selling real estate in the near future. What you then need to do is become an excellent questioner of their motivation. Are they truly sincere in their wish to make a move? Now, or next year? Have they been pre-approved for financing? Etc., etc. You know the drill (I hope). If you jump at every opportunity without first making sure it’s genuine, no amount of time management or task management will help you.
I’ve often said that real estate will eat you up and spit you out if you let it. Don’t make the mistake of treating every lead as gold.
You need to develop multiple sources of business.
When I started, I was told to call every one that I knew and talk to them about the fact that I was in the real estate business and that I’d appreciate their referrals. I was also told that I should go do some open houses. Maybe throw an ad in the paper. That’s about it. I guess the rest was supposed to just happen for me. If someone had told me that I needed to pursue multiple sources of business, I may have succeeded much sooner. So, what do I mean by multiple sources? Why not do a bunch of different lead generation tasks concurrently? Open houses, door knocking, sphere of influence marketing, floor time or duty time, networking, volunteering, and on and on and on. If you think about it, the only real limit is your time availability to develop lead generation systems and your task prioritization skills.
Niche – you can’t be all things to all people.
Now hang on, this sounds like a contradiction of the last point, but stay with me. One of my favourite things to tell new agents is that they should go small to go big. What does that mean? It means you can either compete in a large segment of the market just like everyone else, or you can dominate a very small sub-market if you choose. Over the years I’ve met some fantastic niche players! I once dealt with a guy out of the Lindsay, Ontario area that did nothing but trade in golf courses. When I was taking my pre-licensing courses there was a dentist also taking the courses. Her goal was to broker dental practices once she was licensed – she had absolutely no interest in selling houses. Brilliant!
So what are you passionate about? How can you use that passion to find like minded people that have a real estate need? Do you have specialized knowledge of the gasoline business? Maybe you know what it takes to find the best locations for gas stations and could parlay that knowledge into a business of finding and brokering nothing but service stations. Do you have a specific interest in working with senior citizens? There are a number of specialized education programs to help you dominate the seniors’ markets.
At the end of the day, we all like to work with people who have similar tastes, interests, and values as ourselves. What better way to find meaningful business than to find people that mirror your own style and work with them?
Here’s the secret sauce: You probably have more than one interest, or can at least recognize more than one niche that is either underserved or unidentified. My advice and something I wish I’d been told earlier in my career – find a niche, fill it, dominate it, and then find another and repeat the process. Then do it again. And again. Counter-intuitively, you can develop multiple sources of income from multiple small niches.
Building relationships with your fellow agents will be far more important than you think.
You’ll need to work with these people, hopefully, over and over. The issue we face in this profession is not unique to us, but it was a rapid change that had a profound effect on Realtors – technology, specifically the internet. In real estate it put multiple high-res photos online making a trip to see the place ‘unnecessary’, at least in the eyes of over-worked Realtors.
A long time ago, in a real estate business far, far away, we actually went out and toured properties as a group. I know, weird right? Our local MLS® held weekly tours and competitors and colleagues came together to talk about new listings, active buyers, and to view new listings. We got to know each other. We went for coffee and had a meal together from time to time. The same problem happened with offer presentations; it got too easy to just fax or email the offer to the other party and wait for a response. Not surprisingly, we grew apart. Now it’s perfectly normal to go to an association function and hear whispers of, “I have no idea who most of these people are.”
Shame on us.
Get out and preview properties when you can. Actually present your offers in person! Don’t say you’re too busy either; if you really feel you don’t have the time, you need to ask yourself a couple of questions:
- What is my job really, and who do I work for?
- How messed up are my priorities if I can’t make time to become an expert on behalf of my clients?
We need each other.
You will absolutely need to treat your support staff well
The unsung heroes of the real estate office are our staff. Without these people, we couldn’t provide the high level of service that our clients expect. They answer your calls, they set your appointments, they input your listings, they handle irate calls for you, they help with your database management, they may even be typing your offers for you. Remember however, that you are not the only rep in the office and your business is no more important than any other member of the team. You will be helped in a fair and timely fashion – just like everybody else - provided you treat the staff with respect. Yell, threaten, or berate them at your peril. It’s pretty easy to drop your set of duties to the bottom of the pile.
And if I hear this kind of thing happening in my office you can bet your fanny you’ll be called into my office for a ‘conversation.’
You need to make time for yourself and your family – FIRST!
Rule #1 of scheduling: Family time and personal time FIRST. Business building activities come second.
I can hear the business owners and managers of decades past turning over in their graves! Traditionally, if you wanted to get ahead, you put family aside and did everything you could to churn as many deals as possible. And guess what, it worked to some degree. You can sell a lot of property if you neglect yourself and your family. But how many people lie on their deathbed and regret not working enough? Most care workers will tell you that their patients will confide in them that they wish they’d spent more time with their kids, their spouses, doing community work, exercising, etc. So make these things a priority now. Don’t wait for a retirement that may never come.
My central moto is: You’re in business to live, you don’t live to be in business.
Here’s the upshot: if you make your family and yourself priorities, you’ll actually find yourself to be more productive and happier. They’ll have their mom or dad around more, and you’ll maintain your sanity, stay energized and be more focused. Will you be forced to make tough decisions around your work? Yes, but it will make you examine your activities and keep you on the tasks that have the highest chance of success.
Motivation doesn’t come from the outside. You must be self-motivated.
This is a tough one. No one feels motivated every day. It takes effort, sometimes, to get out of bed and go to work. Especially in a profession where you have to give so much of yourself before you know if you’ll be paid.
There are tons of motivational videos, podcasts, books, posters, self-affirmations, and more that you can access to try to keep yourself motivated. At the end of the day though, those are external and you’ll need to find your own internal motivation. I wish I’d been told about this, but honestly, I think this is so misunderstood that it is still often missed today.
You need to find your reason for doing what you do and constantly remind yourself about it. If that reason doesn’t keep you going, it probably isn’t a big enough reason. Find something that almost scares you with its immensity and you’ll be close.
Keep your courses up to date. RECO has no sense of humour on this and your clients will thank you.
Want to keep your license? Yeah, me too. Then get your courses done on time. Enough said.
Follow up is your friend. 80% of the money you make in this profession is in the follow up.
Ok, the 80% number is one that was quoted to me and I can’t find the source, but it sounds just about right. Lead generation is pretty simple. It can be hard at times, but really, it’s not that complicated. The hard part is the follow up.
The most common reason to avoid follow up? “I don’t want to be a bother!” Pardon? Presumably, the folks that you’re trying to follow up with have already expressed an interest in buying or selling a property, so how is following up with them in any way equated with bothering them?
Well, I think I know the answer to this one now.
You’re probably avoiding follow up because you don’t really know how to do it well and you’re afraid of looking foolish. Be honest, is this your concern too? Come on, it’s just us, you can tell me…
Listen, the answer lies in leading with service. I think the best kind of service in this instance is providing information and guidance, and more importantly your interpretation of that information, in a timely and impactful way. Look for ways to share data and the meaning behind that data on a regular basis and you’re on your way to doing great follow up. Be the expert they deserve! Of course, occasionally you’ll need to re-qualify the prospect and verify that they still have a need for your services and to gauge ongoing motivation on their part, but that’s part of good follow up and fantastic service.
One of the worst feelings you’ll experience in real estate is getting an excited call on a Monday morning from your would-be client exclaiming that they, “found the perfect house at an open house and the attending agent told them they could do an offer with them and they got it at a price that they’re happy with and, the closing date is just like we discussed, and, and, isn’t that wonderful??”
Trust me, if it hasn’t happened yet, it will…unless you adopt the attitude that consistent and powerful follow up is an integral part of great service.
Business planning is vital. If you don’t have a map, how can you reach a new destination?
By the same token, don’t be immobilized by planning. Business planning is an exercise that illuminates your shortcomings while at the same time helps you create the conditions under which you can thrive. See this earlier article: https://goo.gl/Rd8Cji about the importance of Business Plans.
Tax planning is important! Avoid late payments and penalties!
“So, newly minted sales person, you’re an independent contractor. You know what that means? Write-offs! Great news at tax time!” …wait, what’s a ‘write-off’? Well, my manager was correct, as a business operator, I do have the opportunity to use legitimate business expenses to offset revenue generated and pay less tax as a result. Here’s the issue though – most people who enter the real estate business have no idea what this means, or if they think they do, they’re usually wrong. I was. I got into a bunch of cash trouble in the beginning because I didn’t understand the need for careful tax planning.
Here’s what my manager should have told me: “Hire a professional tax planner. They know the laws, regulations, and speak the language of Canada Revenue. Sure, you can try to do it yourself for free…but remember, as in most things, you get what you pay for.”
Negotiating skills are more important than you think.
This is where great real estate sales people stand out from the rest. The ability to negotiate on behalf of your clients is where you really earn your commission. Anybody can put up a good looking sign, a decent website, and create ads that make the phone ring. It takes a professional negotiator to really get the best deal for their clients.
Spend time learning the art and science of negotiating every day. Yes every day. Forever.
“I fear not the man who has practiced 10,000 kicks once, but I fear the man who has practiced one kick 10,000 times.” Bruce Lee
Consistent skill improvement is paramount.
In the same way as you need to work on your negotiating skills, you also need to be working on your other skills on a regular basis. We use the terms, ‘scripts’ and ‘objection handlers’, among others, freely when we train sales people. I’ve never really been a fan of these words, even though I use them myself in my own training sessions for new and experienced reps alike. They smack of deception or sneakiness and that’s just not who I want to be or how I want our sales team to be perceived. The underlying principles, when used for good and not evil, however, are fundamental to success in this profession. Just knowing what to say at the appropriate time will get you so much further than simply ‘winging it’. The look of wonder on a new rep’s face when we role-play scenarios is marvelous to behold. Learn what to say, how to say it, and when. This isn’t deception; it is crafted language, usually in the form of probing questions, that often helps a client come to a decision faster and more clearly than if left to their own devices.
Other skills you’ll need to work on: copywriting, marketing, accounting, building systems knowledge, municipal building codes, real estate law, mortgages, appraisal, property management, investment analysis, and on, and on.
At the risk of using too many quotes by famous people, Abraham Lincoln said, “Give me six hours to chop down a tree and I will spend the first four sharpening the axe.”
Technology (in particular, new and as-yet unseen technology) will be invaluable, frustrating, and unavoidable.
The learning curve is steep and never ending. In my time in the business, we’ve seen the fall of fax machines (honestly, if it weren’t for real estate’s stubbornness, these things would have died out completely 35 years ago!), alpha-numeric pagers, pay phones, MLS® books, rotary phones, type writers, and more. I’ve also seen the rise of the internet and websites, online lead generation, smart phones and apps, HD digital photography, cheap aerial video, easy access to up-to-date satellite imagery, more complicated documentation – remember the paperless society we were promised….yeah, not so much (though we are moving in the right direction again with digital signatures). Thinking about it now, we wonder how we did business without some of these tools, but at the time, they were disruptive to the industry and therefore sometimes scary.
We decried websites and the democratization of information as the death knell of our business, but that didn’t happen. In fact, the opposite has been true – the process of buying and selling has become more in-depth and surrounded by more obstacles than before. Our expertise has never been more beneficial than it is now. Our roles have changed along with technology and turned us into consultants. Sure we still sell, but the process is much more client centric now and focuses on outcomes for the consumer far more than it did 20 years ago.
Being able to adapt to technology changes and innovations should be strengths, not stumbling blocks. The sooner we understand this and embrace changes, the sooner we get to use these new tools for our client’s benefit which in turn means more business for the savvy and adaptable agent.
Who knows what the next 20 years will bring?
Building a business referral network can save a ton of deals!
You will have difficult deals. It goes without saying that occasionally problems crop up that need additional professionals to assist you in making sure your clients’ needs are met. Get to know well drillers and inspectors, septic pumping and installation experts, plumbers, electricians, lawyers, accountants, building inspectors, roofers, flooring experts, deck builders, property maintenance companies, appraisers, painters, etc. Offer your help to them in any way you can and when you need a favour in return, you might be better positioned to ask. In my experience, the agents that have the best networks have the best success rates. Become a connector and everyone wins!
I’m sure there more things that would have been nice to know when I started on this journey called real estate; these are just the most important in my experience.
Still think real estate is for you? Great! Give me a call.