Considering becoming a Realtor?
THE 4 MUST HAVES TO SUCCEED
So you’re thinking about getting into real estate or perhaps you’re already in the process of getting your license. In this blog we’re first going to talk about WHY agents get into the real estate business and then we’ll talk about what it takes to actually succeed in this industry. After doing this for a decade, I’ve developed a theory that there are 4 must haves to make it. The more you have, the easier it will be. If you’ve got none of the 4 elements, don’t quit your day job and I genuinely mean that.
There are over 49,000 realtors registered with the Toronto Real Estate Board. That’s a lot of real estate agents per household in Toronto and the influx of new agents is not slowing down. Think about it, how many realtors do you know already? It is the most competitive commission-based job out there, so why are so many people – men and women interested in the profession? Well there’s the obvious reasons – the assumption about the gobs of money being made, being your own boss and the “flexible hours”.
Shockingly however, those are not the number one reasons I hear when I interview new agents looking to join a brokerage. On a side bar, our brokerage tends to attract mostly women. I’m not sure if it’s the fact that we have only ever had women representatives or the fact that our brand has a feminine feel. For whatever reason, we’ve only ever had one male interview with us and I’m pretty sure he was just trying to get intel from his current boss.
So what is the reason most new female agents give for wanting to get into the industry? The houses. Yup, these women love real estate – they love design trends and they love making a house a home. They can’t wait to get to see so many houses. What many don’t realize, is that being a real estate agent, in actuality, has very little to do with the real estate itself. Sure you get to see some cool properties every once in awhile. But for the most part, it’s a little bit like ‘once you’ve seen one, you’ve seen them all’. The whole point of being a good real estate agent is to help STOP your buyer clients from being all googley eyed and emotional about a property. If you’re focusing on the emotional aspects of a home, you’re missing the point. You need to be focused on the functionality of a home – put your head on and take all the emotions out. So you should end up being more like a home inspector and it kind of takes the sexiness out of it.
But even the properties themselves have very little to do with the day in and day out job of being a real estate agent. I’d say that’s only roughly 10% of what it’s about. The rest of the time you’re a bookkeeper, an administrator, a consultant, a mediator, a customer service representative, a web developer, a decorator, a marketing specialist, a cleaner, an analyst and so much more. The bottom line, is that you need to be well rounded with some solid business skills to be successful in this industry.
If we circle back to the other reasons people are drawn to the profession, the flexible hours is a big one. But let’s be very clear, the hours are flexible in that they are not 9-5 Monday to Friday, but that is where the flexibility ends. There are no specific hours and clients expect (as they should) that you be available when it’s convenient for them, which is often evenings and weekends. So new realtors need to be prepared that they have no control over when they work. They need to set their lives up to accommodate this. If you have a young family, you have to have a partner that can be home in the evenings and on the weekends to take care of the kids or you have to have a nanny. I’m not suggesting it can’t work. I built a successful business over the last 10 years and raised 4 young children during that time. But make no mistake about it, I missed a lot of family dinners, baths & bedtime stories. I’m sure I’ll regret that one day.
The last reason people decide to pursue a real estate career is the money. I’ll be totally honest that it was a big driver behind my decision to get my license….well actually, it was a Luis Vuitton purse that I owe all the credit to. A friend of mine was a realtor (and co-founder of Page & Percival) and showed up to a dinner party glowing with a gorgeous new bag she’d bought herself after closing a deal and I thought to myself…..I am in the wrong business. Beyond the money, I love this job most because it allows me to be the CEO of a business. I love that I get to oversee everything – the marketing, operations, finances, the strategy and the vision for my company. For the most part, I get to work with amazing clients – many of who I have become great friends with. Those that I don’t see again very often, I’ve still thoroughly enjoyed their company for the time we spent together either looking for a home or selling their property. The laws of attraction are often at work in real estate and I frequently find myself working with like-minded clients. Even stranger, I will often find myself working with multiple clients, with the same name, at the same time! I know John is a popular name, but to have 4 of them in one month is a bit coincidental!
For me, there is nothing more rewarding than seeing the fruits of my labour grow into a successful career. I work a lot, usually 7 days a week. But the vast majority of the time, I don’t feel like I’m working and I love that. The highs are really high, but the lows can be really low. I’ll save this topic for another podcast in the future, because trying to manage the emotional & financial roller coaster of real estate, is a skill worth honing.
While we’re on the topic of money, this is a good segue into the 4 Must Haves to succeed in Real Estate.
Must Have #1 - Money
There is a saying that holds very true in this industry – You have to spend money, to make money. That is the first Must Have. You must have some money saved up, to kick off your new real estate career. Most new business run a loss in their first year or two, why would you expect real estate to be any different? Not only are there a bunch of upfront fixed costs that you need to budget for, but you should have saved at least 6 months of income to tie you over to your first pay cheque (by the way, this practice should never change throughout your entire career. You can do very well in real estate and still go months and months without earning a pay cheque. More on this topic in another blog.)
We spent $80,000 our first year when we launched Page & Percival – and our timing could not have been worse – our new brand launched in Dec 2008, right after the economy and real estate market collapsed. It was downright terrifying. But we had (one of my favourite words) GRIT and we were not going to give up. Thankfully, the downturn only lasted about 6 months and we were off. Our first year ended up being incredibly successful and a lot of that success came from the money we invested to get our name out there.
Advertising is expensive. To take out a full page ad in local real estate magazines costs over $12,000 a year. The postcards that fill everyone’s mailboxes every month, can easily run $10,000 a year. Don’t even get me started on how much it costs for billboards and bus shelter ads. Hopefully you know the rule about advertising…people have to see your name/brand about 12 times before they’ll even remember it. Which means don’t think you can take out one ad or send one round of postcards. You need to do it consistently for a least a year, for it to have any affect or don’t bother. You’re basically pissing money away.
I bet your thinking to yourself – I know lots of agents that do well and I’ve never seen them on billboards or bus stations? Which brings me to my next Must Have….. A Network.
Must Have #2 - A Big Network
If you don’t have a ton of money to invest in your new career to kick it off, it doesn’t mean you won’t be successful, but you better have a really big network.
That network needs to know you, like you and trust you AND be in a phase of their life where they are buying and selling real estate regularly AND ideally located in a confined area. Real estate success is highly built on momentum. I’m sure you’ve seen this in your neighbourhood. One for sale sign goes up by a particular agent and then another and another and all of the sudden it seems like they’re taking over the world – they’re everywhere. At least that’s how it feels for us sometimes. Humans love to feel part of a tribe and if someone sells a lot of properties in a neighbourhood, sellers assume that agent must be the best and they want to use them too. That agent may actually be great, but they can also be downright terrible and still sell a lot of properties. It is beyond infuriating to see, when it happens.
Anyway I digressed. It’s important to try and build a business in a confined area, as you’ll grow much faster. When you’re buying and selling all over Ontario, you may be making money, but you‘re not going to be growing your brand. There’s a stat that it takes about 7 years for your phone to start ringing in real estate from people you don’t know. What that means, is that you’re going to need your network to feed you for the first 6 years and maybe even longer, if that network is all over the city. While we’re on the topic of your network……treat your friends and family very carefully. Do not convince yourself that they are obligated to use you, just because you’re now licensed. Do not put an ounce of pressure on anyone, to use your services. You need to prove that you’re the best person for the job, but if they choose otherwise, go lick your wounds in private and never ever, let it affect your relationship. I’m going to have a whole podcast on this topic, so stay tuned.
Must Have #3 - Relevant Business Skills
So what happens if you don’t have money to invest getting your new brand out there and you don’t have a big network of people that know you, like you and trust you? Well you better have a crazy work-ethic and have some solid, relevant business experience. I’m not going to lie, it’s still going to be a long, hard, uphill battle, but if you are willing to sacrifice a lot and work your little hiney off – then you can still make it. The category of people in this sector that often find success, are those that bring unique business skills from a previous job. Those that come from advertising, marketing, branding, sales and web-based tech backgrounds have a big head start.
Must Have #4 - Really Low Expectations
But what if you don’t have any of the 3 must haves above? Do you have any hope of being successful in this business? If you don’t have money to invest, or a big network or relevant business experience……you better have really low expectations. I say that jokingly, but in all seriousness, if you’re ok with only making $20k – $30k for a few years and you’re willing to do everything you can to build your network and slowly grow who you know, then you can still build a successful real estate career.
You’ll also need to commit to growing your business skills by learning everything you can about web development, search engine optimization, graphic design and other technical skills. After all, if you don’t have the money to hire someone to do these things, don’t fool yourself into thinking you don’t need them. Any realtor that does not have a professional website, should never be hired. Period, no exceptions. If you can’t demonstrate that you’ve marketed yourself well, how on earth can you market a house properly. Sure realtors of years past didn’t need websites and social media savviness to succeed, but those days are long gone and if you can’t keep up, you’ll never make it. Even if you don’t have your own personal website, hopefully your brokerage has a robust one that can effectively market your properties for you, while still giving you exposure.
So that sums up my theory about the 4 must haves to succeed in real estate – You’ve got to have money to grow your brand, or you better know a lot of people in a confined area, or you better have relevant and transferable business skills and if you don’t have any of those things, you better have really low expectations. Don’t get me wrong, there are plenty of other skills that you need to have to be a successful realtor, but these 4 must haves are the cornerstones and without them, none of the other ones really matter.
I had all 4 of the must haves when I started and I attribute a lot of my success to that, as well as some plain old good luck.
Hopefully if you’re thinking about getting into real estate, this podcast has made you more confident or maybe it has made you think twice about quitting your day job.