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Being a real estate agent can be a lucrative career, and some real estate agents have even achieved millionaire status. But this is the glamorous side of real estate, the side that often attracts new realtors to the industry. The unfortunate part is that most new agents come with big business dreams that end up being shattered within their first year in business.
We’ve rounded up what we believe to be some of the most important factors that lead to failure for new real estate agents. Make sure to avoid these mistakes at all costs!
Not having a financial plan
New agents often forget that commissions are a lengthy process. It can take several weeks or even months to close a deal. That big commission check takes time to generate and even longer to arrive in the mail. New agents often forget that they need money in the bank to last several months until a steady stream of commissions arrives. Your first few months will be tough, and you’ll be lucky if you get your first sale within the first 90 days. Without planning, new agents deplete whatever savings they have, causing them to panic as they wait for the next deal to close. This is one of the biggest reasons new real estate agents leave the industry: they can’t keep their ship together long enough for the money to start coming in.
Solution: Keep at least six months of savings in your bank account before jumping into the real estate game. Make sure you have enough to cover groceries, expenses, and overhead until you can generate positive cash flow. This way, you can transition into your new agent role without losing your shirt in the process.
Not being aggressive enough
New real estate agents can be self-conscious and nervous. Not having made any deals, or even the thought of being a seller, scares the hell out of them! But the reality is that the business is not going to knock on your door. You really have to try really hard to get those deals.
Agents have to swallow their fears and jump into the industry knowing that it will take time to learn and become professionals. You will absolutely screw it up, but in the end you will learn and grow from it.
Solution: Get out there and be aggressive. Every day you need to do at least five new things to boost your business. Whether you’re learning a new marketing technique, seeking new clients, or attending a networking function, each new day is another opportunity to try to get your name out there and build your business.
have a scattered brain
Having a plan is the key to success for any new real estate agent; really, for any real estate agent, new or old. Without a plan, your hard work will be spread over so many tasks that nothing will get done right and everything risks getting done wrong.
Solution: Get a comprehensive plan together. We recommend that any new real estate agent should have at least three plans: a financial plan, a business plan, and a marketing plan. These three documents should help keep your business running. One important thing to build into all of your plans is a weekly action list. Break down all the tasks you need to do throughout the year and break them down into small tasks that you can do each week. This way, you won’t be overwhelmed with where to start with your plans, but instead have a clear path of action to take every day.
Being a real estate agent can be one of the most rewarding freelance careers one could ask for. But to achieve six-figure profits, you really need to focus on avoiding cheating. These three tips for new real estate agents should help any new real estate agent avoid first-year failure in the industry.