Another year. Time to reflect about what I’ve learned (so far)
I have a work anniversary coming up. I’ve got twelve years in as a local Realtor, though sometimes it seems longer. I feel like I am at the top of my game. I read somewhere that the average Realtor hits peak earning potential in his 14th year. So I still have that to look forward to.
A colleague posted recently that the number of Realtors in Kitchener-Waterloo had grown by half since last time I checked. I don’t think we really have 1800 Realtors in the Kitchener Waterloo Association of Realtors, but if we do it seems to me, sustainable. Since I’ve been a Realtor, the average price of homes has doubled but commission rates have not been cut in half — they fell by 20%.
So, we will become like Toronto with one Realtor for every 300 people (or something like that).
The statistics say that the average new Realtor will not last two years. If the statistics are accurate, 70% of new realtors will be completely out of the business before their five year anniversary. Becoming a Realtor is like opening a restaurant. You’ve got to make it to that five year mark before you have any chance of success.
Real estate is one of the last bastions of the free market economy. The number of Realtors will always balance with the income and revenue levels. I meet Realtors all the time. Some have been in business for seven years and I’m meeting them for the first time. A Realtor in my office told me that he was reading my blog, this blog before he became a Realtor. That’s pretty satisfying.
So Realtors come and go. Some, like me, stay. This blog post is about staying.
What have I learned?
1. Time is business. Business is money
I had a lot of jobs before I became a Realtor. For most of them, I showed up and got paid. Real estate is not like that. In real estate you work for yourself so you always have to be conscious of where your business is coming from. A busy Realtor’s time is our second most valuable commodity*
*Our most important commodity is the knowledge that we know.
2. Not the job of a parking attendant
I’m sure most people who have jobs will say that whatever it is they do is not as easy as it looks. I’m certain that is true. Real estate is a lot harder than it looks on TV. Let’s just leave it at that.
3. Nurture relationships
Last year, 70% of my business came from past clients either moving up, moving out and referring friends and family. There are Realtors out there with a “burn ‘em and turn ‘em” attitude. The successful Realtors with that attitude are always advertising for new business — you see them everywhere: on buses and benches, in magazines and with postcards. The unsuccessful agents don’t last long with that attitude.
4. Every day is a new problem
One of the things I like about being in sales and especially about being in real estate sales is ‘problem solving’.
There are two parts to this one
- Clients come to find help buying or selling a home. Their problems are pretty typical. Help is needed.
- Things happen along the way to a successful purchase or sale. Transactions happen upon unforeseen situations that need to be steered through.
5. Success as a habit
When I was a new Realtor, I asked a Broker in my office why so many new Realtors failed. I was struggling to learn the business and frankly the high failure rate worried me. He told me I had nothing to worry about. Most Realtors who fail have failed before. It they turned to real estate because it looked easy, or if perhaps no one else would hire them, then they would likely fail. But if you were successful in your past jobs and careers then you would succeed. It just takes time to build up momentum for most new Realtors.
6. Clients matter. Brokerages don’t
For new agents, brokerages will give you a business card with the Brokerage logo and contact information front and centre. They will give you a brokerage email address and a website. The brokerage likes to brag about how many agents they have, how many listing they sell and all that brokerage brand building stuff.
But Realtors are free agents. We are independent contractors. We are our own brand. It matters not to informed buyers and home sellers where we hang our licenses. They choose to work with us, not a generic agent at a big box brokerage brand.
Believe me. I’ve worked under four different Brokerages, big and small. They do not matter.
7. Me inc.
Real estate forces you to become who you really are. Your true nature is revealed through real estate. If you are a hard worker or a critical thinker, or a good negotiator or trend spotter…whatever your true skills and secret powers are, they will come out through working in real estate.
When you are starting in real estate they say, “fake it till you make it”. You can fake it for a little while, but you cannot fake it for long.
8. Zero to sixty
I have seen new agents come out of the gate and start making money right away. (They usually stall in their third or fourth year). They are the exception to the rule. Most agent slowly build over the first five years until they hit their stride. It is really tough to work for nearly free for the first few years. Really tough, especially when you see other agents in your office doing so well.
It’s not fair. The universe is random. You cannot control everything. The highest bidder doesn’t always get the deal. The nicest agent doesn’t get the client. Life is hard. Get a dog. You have to be resilient.
10. Too much noice in the line
You have to pick and choose who to listen to for advice. You have to decide on what foundation to build your business. I was mentoring a new agent a couple of years ago. He had shiny object syndrome. He paid for training, gimmicks, paraphernalia…and he was going in every direction at once. I told him. Forget all the bells and whistles. Forget the empty promises. Just choose three things and do those consistently.
11. A business with no product
Real estate is a unique business in that we as Realtors don’t have a product to sell. As such we are always looking for clients. Everything starts with clients. If we have no clients then we have no business. Some Realtors behave as if they are the product and I suppose if lead generation is their goal then they are. But I’ve long thought that the product is the relationship. I know that’s a little esoteric but without relationships we would have no business.
12. Measuring what matters
To avoid ups and downs in business, it’s a good idea to track everything. Who are your clients? Where are they coming from? Which times of year are your busiest? How do you spend your time?
13. Reflect and correct
The market is always changing. The Realtors working in the marker are always changing too. Some big names from ten years ago are no longer big names. I always wonder why that is. I’m supposing its because they don’t adapt. That or their business model was unsustainable for some reason or other.
14. It’s a marathon, not a sprint
I know a hot young Realtor from a few years ago who burned out. He could not sustain the morning meetings with the team, the two hours of telephoning every morning and whatever else put him on the fast track to early success. Whatever it is that you are doing to get successful, are you willing to continue doing once you are successful?
Those are my reflections on my chosen profession as I enter another year doing the voodoo that I like to do.
Note: I’ve written about this before. Funny how things have changed
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