Your Real Estate pre-licensing course will be jammed packed full of vocabulary terms and concepts that you will need to memorize, which is fantastic, and doing so will help you succeed in passing your exams. But what you WON’T learn in these courses is equally essential. In fact, there are several important topics your class didn’t cover that you should be aware of. Here are the top 10 inquiries I receive from new agents:
1. Costs associated with starting a real estate business.
I still don’t understand why this topic is not covered in the very first class. These fees can make or break some people from the very beginning. Do you have a little nest egg saved up? If you don’t, this may not be the right time for you to change careers. The potential for closing your first deal in the first four to six months is slim. It can be done (this requires hard work and commitment), but you need to be prepared if your first closing does not occur for several months. Also, this is not a “steady paycheck” job. You only get paid when you close a deal. You may have three closings one month and only one the next. You need to know how to budget and how to stick with the budget, so you don’t have to get a side hustle.
*For example, in Northern Virginia, the investment to start your Real Estate career can cost up to $3,000 in your first year. This includes your pre-licensing costs – pre-licensing course, optional supplemental materials, exam fees, fingerprint fees, license fees to DPOR, real estate association fees, and MLS fees, to name a few. While these fees usually are not incurred all at once, they are typically paid out within the first few months. Some additional fees include business cards, signs, and lock boxes. Are you prepared to make this investment? Do you have the money available right now to start your new business?
2. What to do after you pass the exam.
You passed your course exam and were told that you now need to register for your state/national exam (varies by state), but then what? Most people end up asking the “what do I do now” question on a Facebook forum or by doing a quick Google search.
After you pass your course exam, you will register to take the national exam with your state licensing testing center. You may need to have fingerprints taken so a background check can be run. Once you have done so, its time to find a brokerage firm to join. Some states require that you have a sponsoring broker BEFORE taking the state exam; others do not have this requirement. Check your state licensing boards website for more details on the next steps.
One thing to note, in most states, you are not actually licensed until you complete and submit the application for your license to the state board, and are then issued a license number, not as soon as you pass the test.
3. How to find and what to look for in a brokerage firm.
In a previous post, 8 Things to Consider Before You Decide on a Real Estate Career, I mentioned that you should have already started to research potential brokerage firms to join. Why? Because there are SO many to choose from and no two brokerage firms are the same (even within the same franchise). You will need to decide between a large, national firm or a smaller, privately owned boutique firm. Both have their positive and negative qualities in the real estate world. Some brokerages are known for offering a significant amount of training for their new agents; others cater only to experienced agents. Do your research! When I say research, I mean check them out online (their website and social media), see what their online presence and reputation look like. Once you pass the final exam, reach out to them to set up an interview with the broker. Tip: focus on passing the exam before selecting a brokerage firm.
I also mentioned there are numerous attributes you should look at when selecting a brokerage firm; here are my top six:
- Education, training, and available mentor programs
- Branding, advertising, and marketing services
- Technology offered
- Lead generation
- Compensation plans
- Company culture
Tip: Be careful of firms who offer you a signing bonus or offer to pay your start-up fees. By doing so, there will more than likely be some type of commitment you must sign with them or be required to pay them back if you choose to leave.
For more details about this topic, read my past post, Finding the Perfect Brokerage Firm for You.
4. Why it’s important to set goals and create a business plan.
I’m sure you have heard the saying, “a goal without a plan is just a wish (or a dream).” Goals help us set a path for our lives. Life goals can include lots of different areas: business goals, educational goals, money goals, and family goals.
Your number one goal when starting in real estate should be to create a business plan. A business plan is a vital strategic tool for business owners and real estate agents alike (remember, you are an entrepreneur now).A good business plan will not only help you to focus on the specific steps necessary to ensure your business succeeds, but it will also help you to achieve both short-term and long-term goals. This plan should include an overview of what you plan to accomplish, along with the specific action steps required to make it happen.
What kind of goals does one set as a real estate agent? Create goals that will put you on the path to success and create a successful mindset. Set a few goals for the year, maybe 1-2, don’t go overboard and be overzealous – especially for your first year. I have seen new agents’ set specific goals, such as:
- I want to make $100,000 this year.
- I want to sell 15 houses this year.
- I want to add 200 contacts to my sphere of influence this year.
- I want to build a network of 20 specific business vendors to grow my network.
- I want to set 2 listing appointments per week.
Don’t just pick a number by pulling it out of the air. Pick a number that makes sense for you and connect your action goals to your primary goals.
5. How to set up and organize your business.
As a real estate agent, you are officially an entrepreneur, Independent Contractor, and a business owner. You will need to keep track of all your expenses and income. You will need to understand the concept of being a 1099 employee (you will sign an Independent Contractor Agreement with the brokerage firm you select) and know how to file and pay your taxes (since they are not withheld for you). Always consult a tax professional for instructions on doing this.
Other things to consider for keeping your business organized from the beginning:
- a separate business credit card/banking account
- a separate email account for real estate only
- a laptop that you can take with you everywhere
- an organizational style for your electronic and paper files
- an app to track your mileage
- Do you want to form a business entity?
- How will you manage your time – daily/weekly/monthly?
These are just a few of the new business operations that are not covered in your real estate course. This is yet another reason why I cannot stress enough the importance of finding a great brokerage firm that can and will walk you through ALL the aspects of setting up, starting, and running a successful real estate business.
6. How to generate leads and market yourself.
As a new agent, your best source of leads is YOUR database or SOI (sphere of influence). Who should be in your database??? EVERYONE you know! Your family, friends, club members, sports team parents, PTA members, your neighbors… you see where I’m going with this….
Right now, the goal is making a list; qualifying the people on your list comes later. A simple excel spreadsheet will suffice for now; column headers should include: First Name, Last Name, Email Address, Street Address, City, State, Zip, phone number. This will work until you figure out which CRM to use
Use this list to get started along with these other ideas to begin generating your first leads and acquiring some potential clients (no clients = no closings = no $$$).
- Contact your ENTIRE personal circle of friends immediately. Call – text – email. Let them know about your new career.
- Call FSBO’s (For Sale by Owner listing) and expired listings. Your goal here is to get an appointment with them.
- Go door knocking. Yep, this can be intimidating, and you may have a door or two shut in your face.
- Offer to do Open Houses for other agents in your firm. Some agents are too busy to host their own open houses (or they just don’t want to).
- Offer to handle rental leads for other agents in your firm. Like open houses, most experienced, busy agents will be happy to hand off rentals as they can be time-consuming and often have a small payout.
- Start sending out an e-newsletter and mailers to your database. Make sure these marketing pieces are full of useful information and not self-promotion.
For more details and ideas for generating leads, read 10 Ways to Generate Leads as a New Real Estate Agent and Now What?
7. How to understand and complete client paperwork.
In your pre-licensing course, you learned the national and state rules and regulations. No doubt, you saw an example of a contract in your pre-licensing study materials, but did you really understand the flow and wording on it? As a real estate agent, you must thoroughly understand the entire contract and be able to go line-by-line through this document (and plenty of others) with your client. Do you know which disclosures must be included or how to read a closing statement? Can you explain a listing agreement, paragraph by paragraph? This is yet another reason why I cannot stress enough the importance of finding an excellent brokerage firm that will make sure you understand all of the forms and processes!
8. How to stay safe.
All occupations offer some risks. As a newer real estate agent, you may not be aware of the constant concern for personal safety in this career field. There will be many times you will be working alone showing a property or previewing a home, holding an open house, and meeting a new client for the first time. It is essential always to make your safety a priority. Trust your gut and always do some research on your clients before meeting up with them. I can assure you that they are “Googling” you, so you should do the same. Check out my past post 11 Safety Tips for New Real Estate Agents for tips to ensure you stay safe.
9. How to survive in the real estate industry.
Competition in this industry can be fierce. In Northern Virginia alone, there are over 25,000 licensed real estate agents! That makes for some hefty competition. So how are you going to stand out from the rest and have a successful real estate career? Are you going to obtain certifications and create a niche? Do you have influential negotiation skills and excellent customer relationship skills? No two transactions are ever the same, how will you handle every scenario that is thrown at you? A good brokerage firm will include numerous training on these topics and more. Follow experienced real estate influencers such as Tom Ferry and Brian Buffini for more tips on standing out and finding your niche.
10. The importance of having the support of your family.
For the first few weeks/months of your new real estate career, you will be spending a considerable amount of time in training, webinars, and hopefully meeting with and joining your mentor on appointments and client meetings. This will require a lot of flexibility in your schedule and support from your family. Real estate is not a Monday through Friday, 9 to 5 job, there are evening and weekend showings, open houses to host and attend and contracts that need to be submitted and reviewed – at any hour of the day. Having the encouragement and support of your family will play a huge role in your success! Make sure your family is aware of the support and flexibility you need from the start to become a rock star real estate agent!
I hope this post answered some of the additional questions you may have or had when taking your pre-licensing course. In a nutshell, you need to have substantial funds in your savings, find a great brokerage firm, create a business plan, set goals, and make sure you are educated on how to generate leads, understand contracts and find your niche to survive in this wonderful, crazy world of real estate.
Make sure to check out all the previous posts mentioned in this blog. If you have any questions, please feel free to reach out to me!