So You’re a New Real Estate Agent? Do These 7 Things to Master Your Business
Getting started as a real estate agent is one of the most exciting career opportunities: you’re ready to make a good living working on your own terms, with a flexible schedule, while helping people find their dream home. But building up this business doesn’t happen overnight — you need to have a real estate business plan to help guide you through the challenges of getting established.
Real estate agents have to deal with complex, time-sensitive transactions that require great attention to detail. If you have what it takes to help home buyers and sellers navigate the biggest transaction of their lives, you should also be able to tackle the details of writing your real estate business plan!
Here are a few tips on how new real estate agents can get started with a strong foundation for business success.
1. Set up a Formal Business Structure
Just because you’re an independent real estate agent doesn’t mean you should be operating as a sole proprietor. Make your business official and protect your personal assets by setting up an LLC for your real estate business. Using an LLC as your legal business entity will help protect you from certain liabilities and lawsuits while also potentially giving you some tax advantages as a business owner.
2. Write a Real Estate Business Plan
Every business owner should have a business plan, and a real estate business is no exception. Check out our guide, “10 Keys to a Successful Business Plan,” for some ideas and useful templates on how to get started.
Start out by asking yourself some big picture questions: What’s your ultimate goal for this business? How will you find clients? What other support do you need to be successful? Your business plan doesn’t have to be perfect or get all the details right on the first try; you just need to use it as a foundation and road map for how you want your business to work.
3. Get Your Real Estate License
Before you can start working as a real estate agent, you’ll need to pass the real estate licensing exam. Also, make sure you have any other necessary business licenses and permits to operate as a real estate agent in your area.
4. Set Annual Sales Goals
Once your business is formally set up and ready to operate, it’s time to talk numbers: How much money do you want to make during your first year in business? Once you know this, you can estimate how many transactions will it take to get there based on a certain average commission and average transaction size.
For guidance, talk to other real estate agents with experience in your target market. They’ll be able to offer you advice on issues like these:
- How many homes can you expect to sell?
- How much money can you expect to make per transaction as a buyer’s agent?
- How much money will you make from each deal once your costs are covered?
- Do you expect to have any “slow” seasons or months of the year when you might not have much income? How can you account for that?
You might not hit all of your annual goals during your first year, but setting goals will help focus your efforts… and it might help you achieve more than you thought possible!
5. Create a List of Strategic Priorities
With your goals in place, you can also set your biggest strategic priorities for your first year as a real estate agent. These priorities can vary depending on how your want to focus your business efforts as outlined in your business plan.
For example, maybe you want to build your online presence in order to market your business. In this case, your strategic priorities may include building a robust website and social media accounts, or maybe hosting some YouTube videos.
Another strategy could be creating a Center of Influence (COI), or database of potential clients. To increase the number of people in your database, you could make a plan to attend networking events or professional development seminars with the specific goal of finding new contacts.
6. Find a Business Mentor
Many new real estate agents find it helpful to learn the ropes from an experienced real estate agent. Whether you find someone at your brokerage, hire a private business coach or get free business mentoring from SCORE, a mentor can be one of the most valuable additions to your business as you get started. A mentor’s experience can help you clarify your goals, understand your options and hold yourself accountable for getting results as you grow your business.
7. Build Your COI and Personal Network
Success as a real estate agent is all about networking! Your COI mentioned above should always be growing — but how? Start with your inner circle of family, friends and existing contacts from your previous career. Introduce yourself to everyone you know, and don’t be afraid to ask them for referrals.
Bring business cards with you everywhere you go; many opportunities to get new clients might come from everyday interactions at coffee shops, restaurants or fitness classes. Every time you give away a business card to a new contact, ask for one of their business cards too (or jot down their contact details on the back of one of your own). This gives you the power to follow up even if they don’t call you first.
You can also reach out to neighborhood associations and homeowners associations. Offer to do a free lunch and learn seminar, or write an article for the association newsletter/website on preparing a house for sale, for example.
Finally, build a network of referrals with other business owners, like home repair contractors, home appraisers, landscapers, and other professionals who provide services to homeowners. These people often know when homeowners are looking to sell before their houses are on the market, and they can help connect you with new clients.
Building your real estate business takes time and persistence, with lots of ups and downs along the way. But if you enjoy the process of building a business and you relish the experience of meeting new people and creating relationships, in time you will see opportunities coming to you!
Starting a real estate business? Learn more about starting an LLC and how to setting one up can help your real estate business.
Looking to get your real estate license? Sign up for a Business License Research Package from Incfile today! This service includes a comprehensive list of business licenses, permits and tax registrations for your business based on your location. Acquiring and paying fees for the necessary licenses is a separate step that you can do on your own or with further help.