Beginner’s Guide to Being a Real Estate Agent by Seth Price
are many different players in the residential real estate
industry—property managers, publishers, builders, banks, and government
agencies, to say nothing of buyers, sellers, and renters. Nevertheless,
the real movers and shakers are the intermediaries, the people
constantly moving between and communicating with these players: agents
Connecting all the dots
The real estate agent is the workhorse of the industry. He is a
salesman one moment, a buyer’s advocate the next; he is an analyst, an
auctioneer, a consultant, a negotiator, and a marketer; he occasionally
performs the services of an appraiser, a clerk, and a loan officer; he
accommodates his clients on nights and weekends, and often works well
beyond forty hours a week. Basically, a real estate agent does a little
of everything, and for that, he’s paid a modest commission—provided, of
course, that he closes the deal. It’s no wonder, then, that so many
agents cycle in and out of the industry; it’s also no wonder that demand
for their services remains high even in a slow market. Overwhelmed?
Don’t be: this guide will tell you everything you need to know about the
challenges and essentials of being real estate agent, as well as
important tips to help you get off to a strong start.
1. Real estate is not a hobby:
It’s a business.In
recent years we’ve seen some new trends when it comes to the consumer’s
relationship with the real estate industry. More than ever before, the
average person has access to the kinds of statistics, market analyses,
legal documentation, and expert opinions that were previously reserved
for people who actively made their living as a real estate agent or
broker. Consider, for instance, the guide you’re reading. Before the
Internet Age, much of this information would only exist in the mouths of
current agents or in realtor licensure textbooks. Consumers had little
need for this information because they trusted their real estate
professional to know it.
Today, realtors are blabbing all over the blogosphere, even making a
buck by telling consumers how to do their jobs. “How to Make Money in
Real Estate: Five Easy Steps.” “Flipping Homes for Fun and Profit.”
Consequently, some seem to think of becoming a realtor like taking up a
hobby, something to occupy your down time, like woodworking or coin
collecting. But most hobbies are cheap, and even the expensive ones are
about the sheer enjoyment of the activity. With a hobby, you’re allowed
to be careless because you don’t have anything to lose. Neglect your
herb garden for a few days? No big deal. Don’t play your guitar for a
month? It’ll still be there when your fingers get the itch. Real estate
is a business. It’s about money, and as our current market shows, when
you get careless in real estate, you stand to lose a lot of it. As a
realtor, you’re an independent contractor, which means it’s up to you to
manage your own business. Any agent who picks up your slack isn’t
handing it back to you.
Finally, hobbies are personal, while real estate is professional.
Typically, only the people with whom you choose to share your hobbies
know about them, which means they don’t have a huge impact on your
public image (unless, of course, you’re still collecting Beanie Babies).
But since your conduct as a real estate agent takes place in the
professional world, it has much a longer paper trail. Pretty much anyone
can find out about it. Fail to satisfy a client, and you’re telling her
and everyone she knows that you’re unreliable—which can have serious
ramifications for other areas of your life. None of this means you
shouldn’t enjoy working as a realtor. On the contrary, you’re not likely
to be successful if you don’t. But the best realtors are those who
marry the pleasure they get from their work to an understanding that
it’s, well, work.
2. Leads and listings
But not necessarily in that
order. No matter what business you’re in, selling is hard. But as a real
estate agent, the challenge is even greater because repeat customers
are few and far in between. Homes, after all, are not electronics or
fashion items. They’re not designed to stop working after a year, nor do
they become obsolete. People buy homes with the intention of staying
put. In a perfect world, your clients will never need you again—or, at
least, not for a long time. True, unforeseen circumstances require
people to move, and in 2010, 69.3 percent of all movers stayed within
the same county, which means more than two thirds of movers could be
returning to the same realtor.
Nevertheless, altogether only 12.5 percent of the U.S. population
changed residences in 2010. That’s a slight increase since 2008, but in
general, this share has decreased by about half since the late 1940s.
Furthermore, these statistics vary widely depending on where you live.
About 14.7 percent of Westerners moved last year, but that does you no
good if you work in the Northeast, where only 8.3 percent did the same.
So as an agent, how do you grow your business when demand for your
services is limited? By working both sides of the real estate equation.
In the old days, agents worked exclusively with sellers, listing their
properties for sale and rent. Back then, your job was to get the word
out about a seller’s property and attract buyers. The more listings you
had, the better off you were.
Today, however, it’s also common to work with the buyer. In this
scenario, success is all about leads, people who are interested in
buying a home. Once you’ve found a lead, your job is to turn him from a
prospect to a customer by helping him secure the home he’d like to rent
or purchase. This usually means you’re a matchmaker, connecting buyers
with listings your agency already has; but you could also be an
advocate, helping them browse someone else’s listings. In either case,
the arrangement is basically the same: agents use their experience to
ensure that buyers don’t get screwed. Instead of selling a property,
you’re selling your expertise. So which is more important, leads or
listings? That depends on your location. But regardless of the figures,
it’s crucial to keep a close eye on both. In a difficult market and a
changing industry, the best path to success for an agent is to be
adaptable and willing to work with sellers and buyers. Concentrate
solely on one, and you’ll find yourself struggling keep your business
3. Relationships are everything.
Every agent is
glued to his BlackBerry or computer screen these days. However, it’s
important to remember on the other side of all those zeroes and ones are
real people, and they’re the ones who keep your business going.
Relationships are your bread and butter—and when I say that, I’m not
talking the little dinner rolls you fill up on before your meal arrives.
I’m talking about the stuff that sustains the vast majority of people
on this planet.
To understand how to maximize your relationships as a real estate
agent, start by asking the basic questions: who do you know, and who
knows you? The answers will go far in revealing the extent of your
sphere of influence, the collection of people for whom you and your
business have weight. The greater your sphere of influence, the more of a
magnet you become for prospects—and the better your chances of turning
them into customers. The cliché goes that real estate is all about
location, location, location. This isn’t just about inventory: it’s
about involvement. To maximize your business, you need to participate in
your community. Join your local realtor’s association. Coach a little
league team. Attend town government meetings. Get exposure in the flesh,
and make sure people know what you do. By showing you’re interested in
the life of your community, you demonstrate that you have a personal
stake in all the business you do as a real estate agent. You should also
treat everyone you meet with the same courtesy and attention, no matter
who they are or what they can do for you—after all, you never know who
may become a customer. Knowing and being known by as many people as
possible is crucial, especially when there aren’t a lot of prospects to
But while quantity is good, but quality is better. Visibility is
great, but if you’re known for being sleazy and underhanded, knowing
everybody in town will actually work against you. As we noted in Part 1,
your reputation in your community and in the public domain greatly
influences your trade. People obviously want to work with agents they
trust. The most sustainable business model is one in which your
transactions with others are always mutually beneficial. Real estate,
like any other venture, is about making money; but focus too much on
your profit margins, and you’ll find you have fewer and fewer customers
looking to give it to you.
Finally, once you’ve established your relationships, it’s vital to
keep them up, whether or not they’re making you money right now. Start a
newsletter. Send personalized notes and birthday cards. Use social
media and maintain a presence online. If you feel like you haven’t
spoken to an old customer in a while, send them an email to ask how
they’re doing. The gesture only takes a minute or two, and it can pay
huge dividends in the long run. Each contact you make has a value, and
each customer has a lifetime value. Lose contact with your prospects,
leads and customers, and you’ll be squandering your greatest asset.
4. Develop a personality.
It’s often said that as a
salesman, you’re not just selling your product: you’re selling yourself.
That’s why as a real estate agent, it’s important to develop a
personality. We’re not saying you don’t have one—we’re just suggesting
that you lean into it. Whether you’re a pet lover, a motorcycle
enthusiast, a foodie or an online gamer, don’t hide your personality:
embrace it. You’re in real estate—so, for God’s sake, be real. Your
personality fosters relationships, which builds your reputation, which
generates leads. You get the picture.
As we noted in Part 3, getting involved in the life of a community
helps build your relationships. But it’s important that your involvement
be consistent with who you are as a person. Enthusiasm is difficult for
most people to fake, so if something you say or do doesn’t ring true to
you, people will pick up on it. If you’re an avid carnivore, looking
for leads at an ASPCA meeting probably isn’t a good way to find
leads—and in fact, it may cause both the people you meet and the people
you already know to think of you as a hypocrite. Instead, you’re better
off finding opportunities to broadcast yourself to people with whom you
have common ground.
As far as those opportunities go, some say it’s better to keep
politics and religion out of business. But politics and religion build
strong communities, and depending on where you are, getting involved can
have huge benefits. At the same time, it’s important for you to decide
what you’re comfortable wearing on your sleeve. Finally, we’re talking
about work here, it’s important to see personality in a professional
context. In general, moderation and a sense of boundaries are keys to
success here. Come on too strong or get too personal in your dealings
with clients, and you may end up alienating more people than you connect
with. Instead, let customers be the ones to open up to you, and they’ll
often be happier for it—after all, many people enjoy talking about
themselves more than anything else.
5. The best agents have endless hustle.
estate industry has had a rough few years. It’s difficult to avoid
looking back at the housing bubble and wishing it hadn’t burst. But the
fact of the matter is, things have changed, and as a new agent, you’ll
have to accept that more than anyone. The days of plenty are over, and
that means the only way to be a successful agent is to have hustle. Talk
to any top producer about their work habits, and you’re guaranteed to
find he or she is an incredibly hard worker. Successful businesses don’t
create themselves, and being a realtor is no exception. There’s a
direct correlation between how hard you work and how successful you will
Still, having hustle doesn’t simply mean working twelve-hour days
from Monday to Friday. After all, working in real estate isn’t really
about putting in a lot of time—it’s about putting in the right time,
doing what’s necessary to close the deal. Because of this, hustle is
also about being prepared to work at a moment’s notice. It’s about
getting a phone call from a potential buyer at eight o’clock on a Friday
night, when you’re sprawled out on the couch watching a movie, and not
thinking twice about contacting your client to set up a meeting. Are we
saying you should you neglect your responsibility to your family or your
spouse for the sake of work? Of course not. But if the benefits of
working outweigh the benefits of whatever you happen to be doing when an
opportunity presents itself, you need to be prepared to suck it up.
If this all sounds incredibly difficult, here’s a bit of
encouragement: most people don’t work hard enough. If they did, they’d
all be top producers. So don’t worry about competing with every agent on
the planet: if you work hard enough, you’ll be in a class of your own.
6. Measure, analyze, and evaluate.
In Part 5, I
discussed the importance of hustle in becoming a successful agent. But
no matter how hard you work, if you don’t measure your performance, you
won’t know whether that labor is yielding results. This is not just a
fact of real estate: it’s a fact of life. When I was learning to play
the drums, for instance, I held my sticks the way that felt most
natural. Years later I found I was having trouble keeping up with the
tempo of a song I was trying to master. I decided to sit in front of a
mirror and examine my stroke. Sure enough, the movement in my weak hand
was quite a lot different than that of my left, and I found it was
seriously limiting my play.
To a certain extent, we improve subconsciously. Through repetition,
we learn how to perform a function more swiftly and more efficiently;
through observation, we internalize better practices and adopt them,
often without even realizing we’ve done so. With sheer muscle memory, I
was able to make strides in my coordination as a drummer. At the same
time, I never would have discovered the problem in my stroke if I hadn’t
taken the time to sit in front of the mirror and watch myself hit the
same snare drum over and over. The most significant improvements come
from consciously reflecting on the way we do things and actively
questioning whether that’s what works best. The top quarterbacks spend
hours watching film, examining their throw and looking for missed
opportunities. The best teachers don’t wait for their annual evaluation
to ask themselves if they’re doing all they can to deliver the material
to their students. Instead, they ask themselves that question after
Similarly, as a real estate agent, you should constantly be examining
and measuring your performance. You can do this in a number of ways.
First and foremost, consider keeping a daily journal to record your
impressions of that day’s work. Keep count of how many prospects you
explored and how you felt about your interactions with them. Articulate
what you accomplished. Did you get enough done? If not, why might that
be? No need to get incredibly detailed: just get into the habit of
jotting down judgments and ideas as they come to you. You’ll have time
to organize them into something more coherent later. You can also learn a
lot about your performance by taking a long view on your prospects.
Track them from beginning to end and figure out what your pipeline looks
like. Are some parts of your sales strategy working better than others?
Do you tend to lose prospects at a particular stage in your pipeline?
If so, you might need to change your approach.
Finally, crunch the numbers to see the results your work is really
getting you in black and white. Check your prospects against the numbers
you have and the numbers you need. Getting a lot of leads, but not
making a lot of sales? You may be better off devoting more time to fewer
clients. How many closings do you need to make a living? Compare your
stats to that number and set goals accordingly.
I’d like to say that after my drumming revelation, I spent the next
few months correcting my stroke. Alas, I didn’t, which means my bad
habit continues to hold me back. This brings me to the last step in the
self-evaluation process: implementation. If you’re not going to try to
correct the mistakes and inefficiencies you’ve worked hard to uncover in
your business practices, what’s the point of seeking them out? Start
making a weekly list of skills you plan to work on or solutions you plan
to try out. At the end of the week, evaluate your progress. Did you
practice what you set out to practice? Did the corrections you made lead
to more prospects, more sales, more success? If not, why do you think
that is, and what else could you try next week? Make no mistake,
self-evaluation is usually not fun, and it can add a lot of work to an
already hectic schedule. But if you’re really committed to being a
successful real estate agent, you’ll find the time—and pretty soon,
you’ll see the results.
7. Make peace with technology.
Let us tell you what
you already know: the Internet has transformed the entire real estate
industry. Twenty years ago, potential real estate buyers were largely in
the dark about their choices; all they had were a string of
abbreviations and a grainy photograph of a property’s exterior. Real
estate professionals, on the other hand, were wizards. They had a
secret, mysterious knowledge of their trade, and clients could benefit
from that knowledge for a price. Welcome to the twenty-first century.
Today, there are no secrets. Buyers can view live video feeds of the
area, read reviews of your agency, access all kinds of user-generated
stats and rankings on the neighborhood, check the seller’s asking price
against trends for the surrounding area, take virtual tours of every
room, even sign contracts digitally. Nevertheless, if clients now have
access to information usually reserved for agents, agents are
experiencing the same increase in access to potential clients. Social
media and technology are changing the way agents interact with their
clients. Eight years ago, Facebook didn’t exist; today, nearly 80
percent of real estate professionals are using the service in their
This has led not just to changes in communication, but more
importantly, to changes in advertising and marketing. The Internet has
come to dominate real estate marketing. That means there are increased
opportunities to reach potential clients more quickly, more efficiently,
and more cheaply. On the other hand, this also means there’s more
pressure on agents to adopt the new tools. But agents who complain by
responding that they “just don’t understand technology” are completely
ignoring their business sense. Fads and trends become norms Internet for
a reason: because they make life easier, they make life better, and
they make people money. True, there is certainly a learning curve,
particularly for agents who did not come of age with the Internet; but
this is no excuse for ignoring it. An effective real estate agent must
keep current and continue to educate himself on the ways technology is
being adopted and adapted to the industry. That means humbling yourself
and asking people in the know, who are often younger.
There are also more formal ways to educate yourself. Read books. Take
classes. Go to conferences. Put in the time. Finally, it’s important to
remember that when it comes to technology, just because you have to
understand it doesn’t mean you have to be an expert. As with any
solution that requires a high degree of skill, you have the option of
recruiting someone else to handle your technology for you. Nevertheless,
you’ll have to know enough to be sure that you’re not throwing your
money away. Hiring someone to build your website will be a waste of time
if what they produce is based on the demands of the previous year’s
customers. This brings to mind a final point about technology: perhaps
the biggest challenge of using it is the fact that it’s always changing.
But that’s all the more reason to be active about adopting it. Don’t
wait for some grand epiphany: search for knowledge. It’s part of your
8. Know your market.
Though more real estate
professionals are beginning to work internationally thanks to
globalization and the ease of communication, most agents continue to
work close to home. This brings us to an important and often-overlooked
fact about the real estate industry—namely, that it isn’t a single
industry at all, but rather a collection of local and regional markets.
Though in many ways we’re no longer limited by geography and boundaries,
the real estate profession is still regulated at the state level, not
the federal level. True, some of the differences in laws practices
between states may seem arbitrary; others, however, exist for a good
reason. But regardless of how you feel about this reality, you must
accept it and plan accordingly. The dynamics of your market can have a
profound effect on how you conduct your business, and with whom—and the
lower to the ground you are, the more evident this becomes. To
illustrate, let’s consider two very different urban rental markets:
Boston and Los Angeles.
In Boston, students make up a fourth of the population, and inhabit
an even larger share of the city’s rentals. This means agents in Boston
experiences two rushes: First from January to May, when the
undergraduates start looking for a place to live, and then from May
until mid-August, when graduate students and young professionals get
their acceptances or job offers. The vast majority of leases run 12
months, from September to September. Off-peak leases and shorter
arrangements, including month-to-month, are difficult to find and
usually more expensive. There are a few large management companies, but
agents and agencies tend to dominate Boston’s real estate market; though
most properties are advertised online, renters must almost always go
through an agent to get to them.
By contrast, Los Angeles’s rental market is characterized by
flexibility. Though it has a similarly high population of students, they
make up a smaller overall proportion of renters, leading to more
variation in leases. Since Los Angeles is not a city governed by public
transportation, most residents drive, which means that renters can be
less picky about where they live in relation to where they work or
learn. Whereas Boston occupies less than 90 square miles, Los Angeles
counts 500 square miles within its borders. Consequently, though Los
Angeles has over five times as many inhabitants, its population density
is a third lower than Boston’s. That means there are fewer people
competing for more properties, so it’s easier to find a decent place to
live, which decreases demand for agents’ expertise. Consequently,
agencies are less dominant in Los Angeles, with more property owners
handling their own marketing and working directly with renters. Less
competition also tends to mean fewer hoops for renters to jump through,
which translates to more informal, less stringent contracts. At the same
time, as a huge hub for the entertainment industry, Los Angeles has an
unusually large proportion of people looking for expensive, high-quality
rentals. Unlike the typical rental market, competition in the high-end
market is fierce, which means agents handle such listings almost
As these two examples show, your location as an agent has an enormous
effect on how you do your job. The technologies and software that work
for agents in New York and San Francisco may not be right for agents in
Minneapolis or Detroit. It’s up to you to learn what aspects of your
business you need to focus on and what solutions to employ in order to
be responsive to your clients’ needs.
9. Learn from the best.
In Part 6, we talked about
learning and improving from reflecting on and measuring your own
performance. One of your greatest assets as a real estate agent is
self-reliance. But you should still look elsewhere for guidance and
support, especially if you’re new to the game. Let’s get philosophical
for a second here. We live in a subjective world. Everything you
experience is colored by the unique flavor of your consciousness. This
means that we all see the world differently, but it also means we all
see ourselves differently. That goes for your reflection in the mirror
as well as your sense of your abilities. This has major implications for
your work as a real estate agent. Confidence is an important quality in
a salesman; but too much confidence can alienate your prospects—and if
there’s a truth about confidence, it’s that the person who has too much
doesn’t know it.
The only way to solve this problem is to “average” your perspective
as an agent with those of the agents around you—and the top performers
are the ones who have done this work for themselves. Start by building
and maintaining your relationships with your fellow agents and brokers,
the people you see every day. You’ll not only strengthen the network of
contacts you need to be an effective salesman—you’ll also have access to
their hard-earned wisdom. Listen to horror stories as well as their
success stories. Find time to ask questions. If an experienced agent
doesn’t have time to help you during work hours, offer to buy him or her
a beer afterwards. Worried about your rapport with prospects? Have
someone whose opinion you trust listen to one of your sales calls. He or
she may be able to point out a tic or mistake that you’re unable to
see. Not getting the response you want from your advertising? Get
feedback from someone who has it figured out.
Next, you should widen your focus. Step outside your office and find
out which agents are the best and/or most visible in your community or
region. Do your research. What are they doing that others aren’t? How do
they market themselves? What tools do they use? Look at their numbers.
How much business are they doing, and where are they doing it? You may
say that because agents are independent contractors, they won’t be ready
to divulge their sales secrets. True, it’s not in their best interest
to tell you everything. But if there’s one thing people in real estate
profession—in any profession, really—love, it’s being viewed as an
expert. By consulting a peer, you’re telling him that he is worth
consulting. You’re validating his years of hard work. Plus, the people
you’ll be asking for help are already successful at what they do. That
doesn’t mean they’ll give up their edge completely, but it does mean
they can afford to help the little guy. In truth, the secret that most
people are keeping is that they don’t really know what they’re doing. If
they have real wisdom, they’ll have no problem sharing some of it with
10. Choose your broker wisely.
As a realtor, you
have both added freedom and added responsibility. Your business is your
business, but it’s your business. Still, working for yourself doesn’t
mean working alone. Unless you choose to earn an additional broker’s
license and work completely independently, you’ll almost certainly be
working under a broker at an agency. That being said, just because you
can hang your license anywhere doesn’t mean you should. Before
committing to a broker, you’ll want to make sure you have the right fit.
Start by doing some research on the company’s earnings. Clearly, it’s
important that your agency be profitable—but how successful are they in
your niche? If you find you work primarily with buyers, an agency made
up of seller’s agents probably won’t help you; if you’re most
comfortable selling to middle-class families, an agency with primarily
high-end listings may not be the right place.
In choosing a broker, as in cultivating your personal relationships,
visibility and reputation are also crucial. If you’re going to tie
yourself to an agency, you want to make sure they’re going to help you
get noticed and gain clients’ trust, particularly when you don’t have
many contacts of your own. The most profitable agency in your region may
have a reputation for being full of shysters and snake-oil salesmen; a
big, international franchise may sound like the ticket, but people your
area may be more comfortable and more experienced in dealing with local,
family-owned establishments. Furthermore, there’s a reason plenty of
real estate brokers don’t opt into a major chain: they’re expensive.
Franchises can charge local thousands of dollars as an initiation fee.
They can also charge renewal fees and get additional income by marking
up “business & promotional items.” Plus, most franchises take an
additional percentage of every commission sellers pay. All of these
costs will affect your bottom line as an agent. Additionally, depending
on where you are, a big name may not amount to much at all. That is,
RE/MAX may have offices in 82 countries, but if everyone in a
twenty-mile radius knows “Big” Jim Sullivan at Sullivan Realty, you’d
probably be better off with him.
Finally, it’s important to get a sense of the nuts and bolts of
working at an agency. The best way to do this is by talking to other
agents. Try to meet with as many as you can from the agencies you’re
considering. Ask about commission splits, technology, administrative
support, and advertising. Try to get a sense of the culture there. Is
the lead broker an egomaniac with a temper? Is he interested in
expanding the business, or apathetic? Is the dynamic among agents
competitive or collaborative? How does this match up with your
philosophy? Align yourself with the agency that is going to support your
ConclusionHopefully, the tips we’ve given you will help you get off
to a strong start. But as any seasoned veteran will tell you, this is by
no means an exhaustive account of the potential challenges you’ll face
as a real estate agent. It may be a while before you start closing deals
regularly, and you can be sure you’ll have your share of failures and
awkward or embarrassing moments. But don’t get discouraged. Like many
jobs that require a high degree of social interaction, real estate is
best learned by doing, by interacting with as many leads, clients,
agents, and brokers as possible. So get to work!
By Seth Price in Lead Management
"I spend the majority of my time delving into what creates success for real estate professionals."