Although all real estate agents will have to pass a licencing exam, this is far from the only test you’ll face when starting out in this competitive industry. To help you maximise your chances of success, here at Engel & Völkers we’ve compiled a list of the most important things to remember. In this first part, we look at getting your business set up.
Before you get your licence, find a successful agent or broker to assist in order to get a clear idea of the way they do business and learn about the aspects of the job besides selling, such as surveys, deeds and title insurance. This should also help to motivate you as you work towards that licence, as getting a taste of the business will inspire you to stay focussed on the career ahead of you. Once you’ve gained some experience and a licence, you should be prepared for some difficult months as you build your client base, so having a back-up source of income or some savings will also prove extremely helpful.
Always keep your expectations realistic. Many new agents give up after their first couple of years due to ‘burn-out’ – often the result of driving hundreds of miles to show off properties without signing a deal at the end of it all. Choose your clients wisely and don’t feel you have to accept every prospective customer that comes along; ask tactful questions about their selling motives or buying schedule to avoid disappointment on both sides. Also keep in mind that competition among estate agents is fierce and know what you can and can’t deliver, especially while you’re still developing your abilities.
Another common reason for failure is the inability to create realistic expenses estimates. Being overly optimistic in your predictions will only leave you short of money, so keep in mind that you’re not solely responsible for business expenses: as an estate agent, your business will also be responsible for paying your personal living expenses. Use a spreadsheet to calculate your estimated income and expenses, divided into quarters to get a realistic expectation of seasonal cash flow – most agents will experience substantial variation in the amount of business generated at different times of the year.
Use a ‘funnel approach’ to obtain a realistic expectation of the number of prospects you will need to attract to gain the desired amount of business. This is not as straightforward as calculating the average number of deals you close per number of enquiries: of course, some prospects are considerably more favourable than others. Therefore, you will need to divide the types of prospects going into the top of the funnel by chance of success – for example, potential clients walking into the office asking to be shown properties and website enquiries – and estimate the anticipated commission per successful transaction emerging from the bottom of the funnel. This way, you will be able to figure out how many prospects you need to attract to stay afloat.
In part two, we’ll consider the best approaches to help you increase business and set yourself apart in an increasingly competitive field. In the meantime, if you want to know more about Engel &Völkers’ excellent Academy and support programme for our new real estate agents, just visit our official E&V website.