3 Stupid Mistakes New Realtors Make
Summary
When you’re a new agent, you are going to make mistakes. But the more you learn from others’ mistakes (and avoid them) the better off you’ll be.
Here are 3 stupid mistakes new realtors make:
1) Starting too slow. It’s harder to succeed as a part-time agent (I talk about it HERE [link to old post]) because it takes too long to get all these things that matter- skills, confidence, street credibility, momentum, and market presence. If you want to make money fast, you must go all-in, full commitment as a professional.
2) Starting too smart. Don’t think for a minute that having some professional background in a related field will make you great as a real estate agent, because it’s totally different actually getting people to hire you to sell their house for top dollar. It’s okay to start stupid, just get a coach or mentor who’s a top producer to train you.
3) Starting too stingy. Don’t go out there looking for the lowest splits or refusing to split a transaction with a seasoned broker who can help you. Get the best support to help you get a lot of wins under your belt if you want to win in real estate. Think about the long-term.
Now that you know these mistakes, do whatever it takes to avoid them. Get yourself in the game, get success, and win!
For the best training for new real estate agents or if you are in the process of getting your real estate license, go to http://AgentPowerLaunch.com.
Full transcript
You’re going to make mistakes. However, the fewer mistakes that you can make and the more mistakes that you can learn from others’ mistakes and avoid them, the better off you’re going to be- if that makes sense.
When you’re a new agent, you’re going to make mistakes. I know because I was a new agent and I made a lot of mistakes. Today, I want to talk to you about three stupid mistakes that new realtors make. I made one of the three. And then the other two, I just see too many real estate agents making these mistakes and it’s crushing them.
And I believe, that’s the reason that there is an 80 to 90% failure rate in the real estate industry in general. Now, when you really think about it, an 80% failure rate in real estate is not really that surprising because when you look at new business startups, they say within two to five years, 80% of all new businesses fail. Well, becoming a real estate agent is technically a new business startup because you’re an independent contractor and it is your business. So the good news is that you own it, you control it. The bad news is you own it, it’s up to you. It’s sink or swim, you succeed or you fail, you win or you lose. The worst thing you can do is just drag it out forever and be miserable, making just enough money to stay in the game, just enough to renew, but not enough to really ever feel like you’re getting a lifestyle or really getting ahead.
So I want to talk about three mistakes that real estate agents make that are all avoidable. And that’s the best part about it, these three mistakes are all avoidable.
Number one: starting too slow. You try to just wade into the water really, really slowly because it’s too cold if you just jump all in, head first. So I’m going to go in slow. Now, people ask all the time, “Can I start real estate part-time?” And I’ve got a couple of videos that you can find. You should look up Kevin Ward, part-time real estate or part-time realtor, and you can watch those videos on how to get started part-time and go from part-time to full time. Can you succeed as a part-time agent? And the answer is yes, but it’s harder, especially if you’re trying to start slow.
Now here’s the reality of starting slow. When I say starting slow, it’s like, “I’m not going to really go in full-time,” or, “I’m not going to go in a hundred percent. I’m just going to kind of learn the ropes and get my feet wet a little bit,” and all that. Here’s the problem. It takes too long to get skills and skills matter. It takes too long to get confidence and confidence matters. It takes too long to get street cred and credibility matters. It takes too long to get momentum and it’s when you get deals piling on top of deals and this deal leads to another referral and this deal leads to this deal. Whenever those things happen and you get momentum, it’s unstoppable, and it just takes too long to get market presence, which just means you get more deals from your deals and from the fact that people get to recognize you and know who you are.
So I just look at it this way, do you want to do this slow, or do you want to do it fast? Do you want to make money slow or do you want to make money fast? Now, for me, I want to make money fast. I’ve made money slow and I’ve made money fast. Fast is more fun and it’s a whole lot easier over time. When you go in fast, you pump the pump, you hit it hard, even if you’re coming in part-time. Just hit it hard, work hard, put in every hour you can, put in all the time you can, burn the candle at both ends if you have to. And the reason that’s critical is you get then to that point of critical mass where “Boom!”, you click over the top, you click into that hyper-speed of now you’re making money, and you can get out of your other job- assuming that’s the plan.
You get out of the other job and now you’ve just bought back your life. You just bought back 40 hours a week the moment you exited another full-time job to go full-time in real estate. And then you can really explode. I believe this was a mistake I did not make. I did not start slow, when I started real estate, the thing that I think I did right was I started fast, and I think my success is largely because I put my back against the wall. I had no plan B. I had no options. I had no savings. I had no other job. I quit my job. I started out, all I had was some credit cards, I had no savings. It was sink or swim. Failure was not an option for me and so I had to start fast.
I had to go in, I was pedaling as fast as I could with both feet. I was working six, seven days a week, and I didn’t have to do it for long. But when I went in, I went in 100%. The agents that I see that dive all- in and go in full commitment, full-bore as a professional are much more likely to succeed both in the short term and particularly in the long term than when you try to start slow. So, number one, don’t start slow. That’s a huge mistake.
The second stupid mistake that new realtors make is starting too smart. You think, “I got this. Yeah, I’m good. I got this. I’ve been studying real estate, I’ve been looking at houses, I’ve been going to open houses, I’ve bought and sold my own houses,” or because you have some type of background that you think will make you great at selling real estate.
You may have a sales, finance, marketing or construction background, or, “I have an architectural background or a design background,” and I’ve heard all of these. And I’ve heard brand new agents come in, and they go, “Well, I have a background in architecture and real estate is architecture so therefore I’m going to be great at selling.” And they come in and “Bam!”, they hit their head against the wall and they find out that their architectural knowledge does not help them get a single deal.
You see, saying, “Because I know architecture and houses are architecture” is kind of like saying, “Because I like birds, learning how to fly an airplane will be easy for me.” It’s a totally different thing and yes, is there some connection? Probably. You may know interior design, but that’s not a whole lot connected to actually getting people to hire you to sell their house and then being able to sell it for top dollar.
Don’t be too smart. When you start, start stupid. It’s okay. In other words, start going, “I don’t know what to do. I need to find somebody that can train me. Somebody that can help me.” Get a mentor, get a coach, learn all that you can.
Okay, now I’m going to be doing another video here in the near future on “The worst place to learn how to succeed as a real estate agent”. I’m going to give you a little insight right now, and that is don’t learn from other people who are brand new. Don’t try to learn from other people who aren’t good at selling real estate. Get a mentor coach and get all the training you can, but it’s best if it’s from somebody who’s actually got fruit on their tree. Get somebody who actually is selling or has sold a lot of houses, that’s had massive success.
And then learn from them, learn everything you can from them, shadow them. Talk to them, go with them on a listing presentation. Not for you, go on one of their listing presentations with them. Just ask, “Can I go along and shadow you. I’ll help you. I’ll do whatever you need me to do. I’ll do measurements. I’ll put signs up. I’ll put on lockboxes. You tell me whatever you need me to do,” and do that with them, with another top producer and learn from them. Work for them for free. And I know that’s crazy. You’re going, “What?” I want you to learn from somebody who knows what they’re doing and don’t try to act like you’re too smart and let your ego get in the way. And I’m totally serious. I would be willing to work with them as a new realtor, I’d be willing to work with a top agent for free, do stuff for them just so that I can learn what they do.
I did not say join their team. Build your own team, build your own business, make your own money, but learn from them and be willing to do things with them, shadow them, help them, and all of that to get credibility and to learn their knowledge, learn from their success. Watch how they do it and what they do. And you’ll find they make mistakes too. And over time, you’ll learn that they do things that are probably not the right things. And if you find they’re doing something that’s BS, you don’t need that. There’s a better way, you can get yes without the BS. But don’t go in thinking, I got this, and refusing to ask for help or trying to …
Well, here’s the third. Let me just give you the third stupid mistake that new realtors make. And that is they start too stingy.
They are like, “I’m looking for the broker where I get to keep all the commission. I want the cheap broker. I don’t want a big split. What, are you kidding? What are they going to do for me? I’m going to do all the work. I want to make all the money.” Well, you may be doing all the work, but you don’t know what you’re doing, so don’t be stingy. Don’t be out there looking for the lowest splits. Now, I’m not saying that you should look for the biggest splits, but I’m saying look for the best support. Look for the long game. Where can I go and who can I affiliate myself with, what can I do as a new real estate agent, that will help me get wins under my belt?
And I’m going to tell you, you want to make a lot of money in real estate, get wins and success under your belt. Success breeds success. You get wins under your belt, you get listings, you get sales. I don’t care if you’re getting only 10% of the commission. If you get listings and you get sales, you’re going to get a track record. You’re going to get confidence, experience- all of that stuff. You’re going to get credibility and all of that is going to help you get to a position where you can build your business. But I’ve seen agents that they’re like, “I don’t want to work with a mentor because they want to split the deal 50/50 and I know I’m going to do all the work,” and all of that. Now let me say this about working with somebody and splitting a deal and mentoring and all that.
The reason a lot of agents don’t want to split a transaction with a mentor is that they’ve had a bad mentor. And I totally agree. A bad mentor is as bad as no mentor, and in a sense they’re worse because they’re going to take half your money and they’re not going to really help you. But finding a great mentor or finding some way that gets you the track record, that gets you the listings that gets you sales, that gets you success under your belt- whatever it takes to get there- is worth it. I want you to start with a longterm game plan, don’t think about the short game. Think about the long game. The short game is, on my first deal, I want to get all the commission. I’m just like, “If I can save the commission then I only need to get half as many deals.” But the problem is, you’re going to get fewer deals because you’re trying to do it on your own and you’re being stingy.
Now I’m going to give you one example of a friend of mine who’s been in real estate a lot longer than I have. When he started real estate, he did a strategy that to this day, when I hear it, blows my mind and yet it put him on a track to become a top producer fast. He is the number one broker real estate agent in all of Phoenix, Arizona- even today, after all these years. And here’s how he did it. When he was a brand new agent, he was young, he didn’t have a clue, he had no experience, no credibility, nobody knew who he was or anything. And so he said, “Here’s what I’m going to do. I am going to go out and I’m going to market myself to everybody I can. I’m going to market myself to FSBO’s, Expireds, anybody that’s looking to sell their house, and I am going to offer to pay all of the commission to the agent that brings the buyer.”
And so, he went out and he started prospecting and he said, “Make every agent the listing agent.” So when he would be prospecting, he would talk to a potential seller and the seller would be, “Why should I hire you? What about all these other agents?” He said, “Listen, here’s the deal. I’ll make every single agent- when you hire me- the listing agent because I’m going to pay the full commission, the whole thing.” And I don’t know what it was, 6%, 7%, whatever it was, but let’s just say it was 6%. He said, “I’m going to pay the whole 6% to the agent that brings the buyer. So when you hire me, every agent is going to be the listing agent.” Now, he used that and so basically said, “I make no money.” And there, sellers were going, “Why would you do that?”
And he says, “Well, here’s why you should hire me. Because one, you know when I take your listing I’m going to hustle to find a buyer for it because if I don’t find the buyer for it and another agent brings the buyer, I make nothing. But if I bring the buyer, I’m going to get the full commission.” He went out there with that message basically saying, “I get no commission, unless I sell it myself and I will promote it, I’ll put it out there on the MLS and if they bring the buyer, they get the full commission.” I mean, which agent is not going to fight tooth and nail to bring a buyer to that listing? That’s what he did. In his first month, he took eight listings because he’d go out there and talk to Expireds and FSBOs, and if they were going to hire an agent- and most Expireds were- he would go, “Well, if you’re going to hire an agent, hire me because I’m going to give all my commission to them.”
And they’d go, “Why should I hire you instead of him?” “Well, if you hire him, he’s not going to have the same thing. When you hire me, you’re actually hiring him because if he has a buyer and he brings him, I’m going to give him the whole commission.” He took eight listings in his first 30 days. And you’re like, “Well, yeah, but he’s not going to make any money on them.” Well, here’s what actually happened. He took eight listings in his first 30 days. He sold all eight listings. He brought the buyer on two of them. So on two of the eight listings, he brought the buyer so he got the full commission- both the buyer side and the listing side. Of all of those eight listings that he sold, he helped four of them to buy their next house.
So, in 60 days, he had eight listings sold and had six buyer sales. He got paid on all six of the buyer sales. He got paid on two of the listings sold, and in 60 days, he had instant street credibility. He had a huge market share and nobody cared how he got it. When it showed up on the MLS, when it showed up with signs in yards, he showed up with the credibility. After that, he never ever again had to do that. Now he can go out and get listings and he can do the full, just regular commission splits and all that kind of stuff. Now he went out with credibility as somebody who had actually taken listings and sold them. And in 60 days, he had more experience than most agents will have in a full year, because he was willing to go out there and he didn’t start stingy and go, “Well, I’m not going to give away all my commission.”
Now, granted, I’m not saying that you should do that and you have to have a broker that was willing to let you do it. Basically, he got to talk to the broker into saying, “Let me try it for 30 days.” The broker goes, “Okay, you try it for 30 days.” He tried it for 30 days, got eight listings. After that, he couldn’t do it anymore. But it didn’t matter, because he wasn’t thinking about how much money he was going to make on those eight listings. What he was thinking about was how much business, how much street credibility and track record he could create out of doing that. And it didn’t matter so much how much he made out of those first eight listings. What mattered is that he would have a credibility and a track record that would allow him now to get more listings and get more listings and get more listings where he was guaranteed that he was going to get paid.
It’s a longterm thinking strategy to get success, knowing that the money would come. And my whole point is not that it’s a strategy that you should necessarily try. I’m not recommending it, and I’m not your broker, so you’ve got to check with your broker and your attorney before you try anything like that. But my point is don’t be stingy. Think, how can I get track record? How can I get success? I’m going to say it again. Success breeds success. Get yourself in the game, get things happening, get business, whatever it takes to find the business and get the business, get success and win.
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