What every new real estate agent should know in 2022
Where you begin
So you’ve gotten your real estate license and are jumping at the bit to get in on the action of a never-before-seen booming market. You’ve logged your contacts in CRM (client relations management system) and let your friends and family know that you’re in business. You patiently wait for business to come in. And then you wait some more… Now what?
Most new agents sign on with a brokerage and begin paying monthly fees for office space, floor duty (answering calls at the front desk), and priceless mentoring from experienced agents. This is a great start, but it’s hard to get traction in a market that is right now buyer heavy and seller light. It’s frustrating to watch money go out the door while other agents are out showing homes. The idea of “I’m investing in myself and this will eventually pay off” starts to fade as the months go on with slim to no transactions. Sellers seem to go only to their trusted experienced agents. What’s worse, none of the buyers you have are able to get their offers accepted because the market is so competitive right now. Your contact circle is exhausted, and you’re still struggling to get off the ground when this is supposedly the best time in recent memory to be in real estate.
You do the next best thing and search “how to buy real estate leads” and come up with a list of great resources. The only problem is that they want another slice of your “I’m investing in myself” money that’s already being taken up by your brokerage and local, state, and national real estate fees. It’s hard to cough up more money when there’s no guarantee of a sale. (They guarantee leads, not sales).
Understand that your pain is all part of it
It is not well known to most of the population that being a real estate agent means being a 1099-independent contractor, complete with upfront expenses that are not reimbursed, not to mention all the paperwork and tax complication that comes with it. Annual licenses and fees for real estate agent run around $5,000 per year, and you need to make much more than that to make it worth your time. And not only do the majority of those around you not know those numbers, but they also think that realtors take a huge cut of the sale for “doing nothing.” It’s rough. We get it.
Real estate merges a bit of marketing, sales, and politics. As a new real estate agent, 98% of your time is letting others know you exist (marketing) and that you’re the best person to help them find a home (sales). The political aspect is that you have to run an ongoing campaign of sorts in your local area and convince people to “vote” for you—by calling you as opposed to another agent in the area when it comes time to relocate. It’s tough. We get it.
Trust that you are playing a numbers game. And, also, a waiting game. Nurturing leads takes a lot of effort with about 1-3% return, and leads take, on average, about one year to go from considering a move to closing on a home. You want to be in the forefront of a buyer or sellers mind long before they are looking for an agent. Once buyers are ready to seriously browse homes and contact an agent, it will take three to six months to find the home and close. Waiting for that is like watching water boil (but worse).
Where you want to be: in a place where clients come to you
You want to run a local game. Overwhelmingly, more than half of people find an agent based on a referral from someone they know, which is hard on new agents. But the majority of people select the first agent they interview, which is great for new agents who are worried about having to compete against more experienced agents.
A recent survey conducted by The Neighborhood Score team revealed that the minority of people who actually interview more than one agent (i.e. experienced home buyers/sellers) choose a real estate agent primarily because they are an expert in the area they are interested in buying. These are your investor clients that will come back to you for repeat business if you keep in touch. And as most successful real estate agents get their business from repeat clients, this is the market you want to target to consistently grow your business. This is even despite the fact that they are in the minority of the real estate market.
Become a local expert so your clients can find you
Because you decided to become an agent, you are likely well versed in your local area. However, no one knows this but mom, grandpa and the kids. The key is to get the word out to your neighbors that you are the first person they should call if they want to know about the housing market in the area.
You can build yourself as a local real estate expert by doing the following:
- Learn how to geo farm effectively. This involves creating flyers with things like neighborhood-level stats to pique their interest.
- Downside: lots of time and money, and almost every one of them ends up in the recycle bin, but again, it’s a numbers game.
- Build meaningful relationships with people you would want to work with. This does not mean building friendships with anyone and everyone. You really need to genuinely care about people if you want to build lasting relationships that don’t feel forced. Then the conversation about what’s happening in the real estate world comes naturally and organically, and is seen as information sharing rather than selling (which it is).
- Downside: it takes time to have these conversations and build relationships, but in the long run it’s totally worth it and way more fun to work with people you like.
- Make weekly or monthly videos to update your clients on market trends and other interesting happenings in the area. The key is to be both consistent and hyper-localized, such as what it’s like to live next to XYZ park, or provide an opinion on an upcoming event or exciting home on the market.
- Downside: making videos is not everyone’s strength, and a bad video can hurt your image.
- Go to home showings on a regular basis. This is a weird one because you’re not there to buy, but doing this helps you truly understand market prices, real-time changes in home values, and gives you a ground truth feel for what’s happening in your area. Plus, you’ll often find a bored seller’s agent dying to talk about the market.
- Downside: it’s time out of your day, but in the end, it will help you assess home values and understand and quickly pull up housing ‘comps’ in the area.
- Apply to be a Neighborhood Expert on http://www.nhscore.com. This website is a research tool designed for investor-buyers who search for their optimal areas using targeted metrics and specific trends, seeking out the best areas across the country. Rather than using a high-cost lead buying website that spam your name across the ether, users come to you when they are ready. The users on this site see your name as the Neighborhood Expert when they click on a given area during their research, and chances are they don’t already have an agent in mind since they’re mostly looking from out-of-state.
- Downside: there is a vetting process to become an expert, but on the plus side, once you are approved your name and picture is up immediately and you can cancel anytime.
Start by sharing your knowledge
Have you lived in a number of areas across the country? Help others out by going to www.nhscore.com, search your city or zip code, navigate to the neighborhood you’ve lived, and fill out a review!