6 Mistakes That Tie You Down
It pays to know how to run your business. Here are mistakes some sales associates make and tips for turning them into positives.
We’ve all heard the saying “To err is human …” but in the real estate industry even the smallest mistakes can mean the difference between having a successful career and being stuck in a holding pattern.
“The inherent nature of the business and how different it is from traditional careers makes it difficult for the average person to successfully make the transition into the real estate business,” says R. Eric Bramlett, a broker with One Source Realty in Austin, Texas, and the author of the article “Common Mistakes New Real Estate Agents Make.”
“As a broker, I see many new [sales associates]. They bring a lot of great qualities to the table—lots of energy and ambition—but they also make a lot of common mistakes.”
From failing to build a business plan to deciding that those important tech tools are just too expensive, sales associates can use these tips to build a thriving business.
“There’s nothing fun about starting off your week with a [sales associate] whose hair is on fire because he or she [accidentally] goofed,” says Gwen Treston, broker/vice president at Watson Realty Corp. in Neptune Beach. “But as hard as we try, mistakes do happen.”
We uncovered six mistakes that brokers see their sales associates making on a regular basis, along with some sage advice on how to avoid them.
With freshly minted real estate licenses in hand, new sales associates flock to local brokerages ready to claim their piece of the real estate pie. Unfortunately, many of them just don’t take their new careers seriously. “Many of them are thinking, ‘Oh, I’m just going to sell real estate,’ and don’t treat it like a real business,” says Rebekah Rivers, CEO of The Rivers Team/Keller Williams Realty in Tallahassee.
“I walk through the office sometimes and see agents in the recreation room chitchatting,” says Rivers. “I tell them, ‘This isn’t selling houses.’” Without a focus and plan, many of those sales associates wind up never taking the necessary steps to establish themselves as independent contractors. Some are unaccountable for their actions, while others hang around the office selling one or two homes a year until they eventually leave the business.
“If you’ve ever opened the doors to any business, you know that one of the key ingredients is a business plan,” says Bramlett. “Your business plan helps you define where you’re going, how you’re getting there and what it’s going to take for you to make your real estate business a success.”
Here are the essentials, according to Bramlett, of any good business plan:
- Goals. What do you want? Make them clear, concise, measurable and achievable.
- Services You Provide. “You don’t want to be the ‘Jack of all trades and master of none,” says Bramlett, “so choose residential or commercial, buyers, sellers or renters and in which [geographical] area you want to specialize.”
- Market. To whom are you marketing yourself?
- Budget. “Write down every expense—gas, groceries, cell phone and more. Then write down the new expenses you’re taking on—board dues, increased gas, increased cell usage, marketing, etc,” says Bramlett.
- Funding. “How are you going to pay for your budget without any income? Plan for at least 60 days,” says Bramlett. “With the goals you’ve set for yourself, when will you break even?”
- Marketing Plan. “How are you going to get the word out about your services? The most effective way to market yourself is to your own sphere of influence,” says Bramlett. “Make sure you do so effectively and systematically.”
To help sales associates get a grip on reality, Rivers suggests you talk with them about the importance of creating and following a business plan, and developing marketing and advertising budgets. She has sales associates fill out goal sheets that include yearly goals and details on what it will take to reach those goals. To close two sales in a month, for example, a sales associate would set out to get three listings during that period. “I also tell them that the office is for training and client meetings,” Rivers adds, “but that they don’t make sales there.”
No one really likes hitting the streets to find new clients and customers, but in today’s market, this age-old sales strategy has once again become a necessity for those who want to fill their pipelines. “Most of them just don’t like doing it,” says Gloria Frazier, broker/president at ERA American Realty of Northwest Florida Inc. in Fort Walton Beach.
Frazier says overlooking this important marketing approach is a mistake. “Salespeople have more fun when they have a real buyer or seller in front of them,” she says. “Where the experienced [sales associates] have [licenced] assistants to do some of the screening and prospecting for them, those that haven’t quite ‘made it’ yet have a hard time setting aside enough time and energy to develop new business through prospecting.”
For the latter, Frazier says, her brokerage offers a postcard program based on a specific geographic or demographic farm area. Sales associates can also get handouts (often a small gift tied in with a holiday theme) to use with past clients and customers. “Those gifts get the agent going to the front door to talk to past clients,” says Frazier, who impresses upon sales associates the much higher rate of return that comes from face-to-face contact with potential clients and customers.
“Most new sales associates don’t realize that the hardest part of the business is finding the business,” says Bramlett. “They’ve just shelled out money for their license and board dues, so the last thing they want to do is to spend more money,” he says. “Any good businessperson will tell you that how much business you get is directly correlative to how much you spend on marketing. If you choose the right brokerage, then you’ll get some good inbound leads. However, don’t neglect a good personal marketing campaign from the beginning, to get your own name out.”
“In addition, those who do spend money on personal marketing stop because they spend it in the wrong place,” says Bramlett. “The easiest place to spend your money is in conventional newspapers. This is the most visible place to see real estate advertising, it’s where large offices spend a good part of their money and so many new agents mistakenly spend their money here. This becomes very frustrating to new agents because of its low return. New sales associates should look to their own sphere of influence and referral marketing to see the most effective return on their investment,” he says.
Also important is that customer pipelines have to be replenished through prospecting on a regular basis, not just when business is slow. “Every [sales associate] who gets busy in January and neglects to prospect regularly,” says Frazier, “winds up with no business in June.”
Making assumptions about other people’s wants, needs and knowledge levels can be dangerous, according to Frazier. “The biggest mistake is thinking that the buyer or seller knows what’s going on, when they really don’t at all,” says Frazier, who sees too many sales associates neglecting to clearly explain to customers the steps involved with buying or selling a home.
Skipped issues can range from seemingly small issues (like not telling the buyer to bring a cashier’s check to closing) to monumental problems. In the end, it’s the sales associate who winds up looking bad, and who can even be on the hook for future liabilities.
At ERA American Realty, Frazier says, brokers use a combination of in-house training, case studies and role playing to ensure that sales associates are asking the right questions and covering the appropriate topics with their clients and customers.
Five times a year Frazier holds a class based on real-life mistakes sales associates have made and complaints she’s heard. “Ninety-five percent of [the mistakes] are communication issues,” she says. “Most are based on disconnects that sales associates—had they recognized them at the time—could have dealt with quickly.”
“Getting started is expensive,” says Bramlett. “However, you’ll run into even more expenses when you go to arm yourself with the necessary tools of the trade.” Of course, your first big expense should be your Realtor® Association membership. “Here’s what [else] I think is necessary,” he says.
- Mobile phone with a beefy plan. “These days, everyone has a cell phone. But not everyone has a plan that will facilitate the level of use that real estate professionals need. Plan on getting at least 2,000 minutes per month,” says Bramlett.
- Computer (preferably a laptop) with appropriate software. “There’s no way around it; you have to have a computer and be savvy enough to use e-mail,” says Bramlett. “You’d be wise to invest in some business management software, as well. If you’d like to save some money (and who wouldn’t?), then you can get the client and e-mail management software Thunderbird from www.mozilla.com. And, you can get a free office suite from www.openoffice.org,” he says. “The only downside to these programs is that they do not sync with your PDA or smartphone.”
- Real estate–friendly car. “You don’t have to have an expensive luxury car, but your two-door coupe won’t do the trick. Make sure that you have a four-door car or van that’s comfortable and presentable,” he says.
“Real estate professionals choose their broker for a variety of reasons—they have a good reputation, the office is close to their house and more,” says Bramlett. “While these aren’t bad reasons to choose a broker, they also aren’t going to help you in your success. The No. 1 reason to choose a broker, and the question to ask is, “What do you offer your agents?”
“Ask the broker: Do they have incoming leads? What does their training program consist of? What’s their retention level? What’s their average sales price? Do they encourage their sales associates to promote themselves? A broker’s purpose is to help new sales associates start successful careers and to help established ones progress to the next level,” says Bramlett.
Mistakes aren’t reserved for new sales associates by any means. Rivers, for example, sees way too many experienced professionals thinking that just because they’re hitting their sales numbers, they no longer need training, mentoring, education (above and beyond the required continuing education) or other tools that can give them an ongoing edge in the market.
“They think that once they’re good, they’re good, and that they don’t need to be taught anymore,” says Rivers, who estimates that she herself has taken more training in the last 12 months (e.g., through her franchise’s Rising Star and Mastermind program) than she has in the preceding five to 10 years.
“None of us are ever really that good,” says Rivers. “We can all use ongoing training and refresher courses to get even better.”
To impress this on her sales associates, Rivers says, she offers mentoring, holds role-playing sessions and accountability classes, and talks one on one with them about their ongoing training goals. “I’m constantly reminding them that they need to go to class,” says Rivers. “Mostly, they want to do the fun stuff like schedule appointments and talk to people, but being a good real estate [professional] takes so much more.” Bridget McCrea is a Clearwater-based freelance writer.