One of the first questions new Realtors have for me is always 'how much money will I make in my first year?' and in order to answer that question, you need to understand how Real Estate Agents make money. How much commissions you make in your first year as a Realtor will be entirely dependent on you and how much business you're able to generate. Your gross income is different than your net income, so make sure you're tracking your expenses. The advice below is from 17 Veteran industry leaders who offer tips on how to build your business when you're starting out.
If you're looking to make 100k in your first year as a Realtor you'll want to first reverse engineer the process. What is the average price of sold homes in your area? How many homes will you need to sell in order to reach your desired commissions? Also, how much will you have to spend to reach that number? Knowing your key business metrics and keeping track of where your money is going will help you survive your first year in real estate!
This article is for first-year Real Estate Agents, whether you're six months in and still searching for your first deal OR you just received your license in the mail. The intent of the following Realtors® who contributed to this article is to help those who are seeking help/advice. If you haven't already, you should connect with each one of the following Realtors® on the social media platform of your choice!
If you'd like to add to the conversation and assist first year Agents, drop us a line in the comments section below!
Without Further ado...
If you could go back to your first year as a Real Estate Agent, what advice would you give yourself?....
Anita Clark | SellingWarnerRobins.com
Without a doubt, the top thing I would tell myself if I was able to turn-back the clock to my first year in this industry is to become an online local community real estate expert as quickly as possible. Not only does this help new agents learn all the inventory in their local markets but it also gets them familiar with driving through all the subdivisions and neighborhoods. If you know what is available and have seen the areas first hand, you can much more easily assist consumers who are either not sure exactly what they are looking for or even aid those who have done their online research and have a good idea where they want to live.
It also helps new agents understand the real estate digital tools available to them, how to build a Web presence, and the various ways to share their information both organically and socially, to generate online interest and potentially bring in new clients as well as referral partners too. When others are chasing the next shiny real estate “thing”, sometimes the best course of action is to get back to the online basics and become the definitive source for all things real estate in your area.
Joe Samson | JoeSamson.com
I believe that success is based on a combination of multiple things that one does on a consistent basis. Real estate agents are known to wear multiple hats all the time and to boot strap themselves more often than one could imagine. Therefore I found this topic to be one of the most important questions that we need to ask ourselves not only in the first year of being in real estate, but every day when we open for business.
After reflecting of my ten years of being in business, the number one advice that I would give to new agents is: “forget about the sale, and start caring about people”.
People like to deal with people who can genuinely show that they care about them. We live in busy times and we tend to streamline a lot of tasks to become more efficient. Staying in touch with your clients cannot be replaced even by the best technological tools or by another individual. If you want that client to be loyal and supportive to you, you will need to find the time to care about them.
Andrew Fortune | GreatColoradoHomes.com
Looking back, I wish I would have trusted my instincts, rather than listening to everything my brokerage was teaching me. There are MANY different ways to run your business, generate new business, and manage your database. The problem with many brokerages is that they only teach the “tried and true” methods of getting new business. If you like to talk on the phone and network all day, then those tactics may work for you. I’m not that kind of person though. I would hate to have a Realtor contacting me all the time, especially when I’m not even in the market for a home. I knew if I was that way, other people were as well.
The skills required to help home buyers and sellers successfully buy and sell real estate have nothing to do with networking all day. You can generate new business in multiple ways using the internet without bothering anyone. I was discouraged from this when I got into the business. I went against my better judgment and did all of the old-school methods of generating business when I started. I worked open houses, made daily calls to my database, and focused on my “sphere”. I almost went out of business in the first year.
I decided that if I was going to go out of business, I was going to do it my way. I quit my expensive brokerage and started working with a 100% commission brokerage ($199 fee per transaction). I then started focusing on internet leads and my business hasn’t stopped growing since then. I now have my own brokerage and work with agents who like to do things differently than the old school methods.
So, if I could go back in time and give myself some advice, I would tell myself to ignore the people who have been doing the same thing for years and start being innovative online. Since the internet has completely changed the industry over the last 10 years, there’s no time for following the herd, in my opinion.
Tyler Zey | EasyAgentPro.com
The first thing people have to understand about real estate it this:
Being an agent is not a career.
You are starting a business. You’re becoming an entrepreneur.
This is VERY different than having a job or going into a line of work where salaries, benefits, and 9/5 exists.
Here’s what it means to be a real estate agent:
Since those are the two biggest things you need to focus on, here are some tips for helping you get started in real estate.
Tip 1) Understand how many leads equal your financial goals
You need to know how much income you want to make.
And then you need to understand how many leads it will take to get there.
I made you a Income & Lead Calculator here with Google Sheets. Take this, and figure out your goals like this:
What you’ll immediately understand is the steps you need to take to hit your desired income. There will be no guessing whatsoever! This is very important. The average agent will be afriad of failure. Or hedge their entire success on that one deal going through next week.
Don’t be those agents!
Use the law of averages to your benefit and understand that if you generate enough leads, the income will follow.
Tip 2) Quantify Your Lead Sources
The second sheet on that spreadsheet I shared above will help you quantify where your leads are coming from.
In real estate, you can either buy leads or earn them with time. This sheet will help you figure out where you will generate what leads from. And hold you accountable for generating them.
Tip 3) You’re a business owner now. Here’s what that means:
Finally, being a real estate business owner is dramatically different than having a normal career.
* When there are problems, people call you. Doesn't matter the time of day. This exists for the first year until you hire people to answer those calls for you.
* Your commission check does not equal your take home pay. You have to invest that money back into the business and lead generation sources.
* You are taxed differently. This is a good thing for the most part.
* No one will be there to make sure you don't fail. It's up to you to start work at 9am.
* Weekends were made for real estate transactions.
* You should read: E-Myth - It's the best business book for new entrepreneurs.
Hopes this help you get started in real estate! If you need any lead generation tips, be sure to check out my writings at Easy Agent Pro.
Bill Gassett | MaxRealEstateExposure.com
Things were very different back when I first got into the business due to the internet being in its very early stages of development. Back then we did not rely on our websites to bring in business. In fact much of what we did relied more on old fashion marketing including advertising in newspapers and magazines. Fortunately for me I was an early adopter to the internet and the power that it held for capturing business. I made having a dominant website/blog as part of my business strategy.
If I were to give a new agent one piece of advice it would be to create an unmistakably good real estate website that locals would want to sink their teeth into. One of the things I have spoken about on multiple occasions is creating exceptional community pages for all the cities or towns you do business in! So what is a community page you ask? Essentially a community page gives consumers everything they would want to know about a city or town. Information such as demographics, town history, local attractions, restaurants and of course a description about the real estate market. A good local page will also have some information about yourself and what makes you a hire worthy agent.
One important point to emphasize however is the need to market these pages well. As an agent you need to make sure they are done well to perform online. Having the basic understanding of both on page and off page SEO is important. For a Realtor to capture business from these type of pages you should come up in search for a phrase like top Real Estate agents Grafton Mass. When a consumer does a Google search like this they are looking to hire an agent. While this might not be a high volume search, it is a money search! This is not a casual real estate enthusiast but someone who is looking to hire a Realtor!
If I were to do things over again, I would have focused on creating these type of pages a lot sooner!
Debbie Drummond | TheLasVegasLuxuryHomePro.com
Surviving the first year as a Real Estate agent can be challenging. One of the most common mistakes new agents make is not using our budget efficiently. It’s a good idea for any agent to review their hits and misses at least once a year.
For me, the end of the year is a perfect time. It allows you to pre-pay for some of next year’s marketing, memberships or events. Prepaying next year’s expenses is a useful tax tool when you’ve had a good year.
It is important to track where each deal originated. I have a host of different emails set up. When advertising in print, etc., I will use a different email address for each ad. My website is designed so I can see whether a lead came from PPC, organic, or a blog post. My CRM shows when a lead comes from the website or one of the lead gen sites. If someone calls, I ask them where they heard about us. One of my best ROIs over the past year has been a YouTube Video. I produced it myself. Spent no money promoting it but it has brought some excellent clients.
Unfortunately, most of our marketing costs more than YouTube. One of the typical pitches we hear from vendors is “In your market, you only need one deal to recover the cost.” Trust me, you will hear that line throughout your career in real estate. The catch is, how long does it take the product they’re pitching to bring you that one deal. By tracking ROI of everything, you will know which items to cut.
Be careful with marketing programs that need 6 months or even one-year contracts. Lots of vendors will try to rope you into them. If their programs are so good, then why don’t they offer a monthly subscription? Or at least a three-month starter package? Make sure someone in your specific market is having success with the program. Do read the fine print about canceling the contract. Bottomline, once you realize that something isn’t giving you a good ROI it needs to be cut.
Chris Highland | FrederickRealEstateOnline.com
When I was getting into the real estate business 24 years ago, I had one piece of great advice from my real estate agent: Start in a brokerage where you have direct access to the broker. You'll want training in the technical aspects of the contract and you'll want to have answers to your questions when you need them. I started with a small boutique brokerage in our town, and the broker's office was just a few doors down. She was available and was a great teacher.
Good training is probably one of the most important aspects of starting out in the real estate business today, and it seems like its becoming more and rarer. It's crucial to understand the contract in the state where you practice real estate and to know how to structure an offer, and how to properly shepherd a transaction. Learning good practices from the beginning will help your career immensely.
The piece of advice that I never got but wish I had: Treat your real estate career like a business. You'll probably not find that kind of help in a local brokerage, you'll have to seek for that information. As a real estate agent today, you are an entrepreneur. As such, you wear all the hats: the CEO, head marketer, lead generation, education director, etc. Start learning right away about business and you'll do well.
Kyle Hiscock | RochesterRealEstateBlog.com
The first year in real estate is generally the toughest one. In fact, the first year will either make or break an agent. With so many different ways to generate business, it can be confusing which will provide the best results.
The best advice I can provide for a first-year agent is to start building an online presence. While the results may not be instant, the longevity of building an online presence will outlast any direct mailing or newspaper ad by a long shot.
The first suggestion to building an online presence is getting a website and blog up and running. Within that website, designing detailed and thorough real estate guides to your local communities is critical.
For example, this Realtor guide I've created the Webster NY real estate market performs very well in the search engine results for terms such as "Top Realtors Webster NY" and "Webster New York Real Estate."
By creating these detailed community guides it shows local residents who are searching for these key terms that you have a strong knowledge of the local area, which ultimately can lead to an inquiry from them.
Again, while creating an online presence may not be an instant source of leads and income, if you're able to overcome the challenges year one will present, the presence you create will pay you back, ten times over!
Paul Sian | CincinKyRealEstate.com
If I were to go back in time and advise myself as a new real estate agent I would tell myself to focus on the technical aspects of real estate. Not just technology related to signatures and taking great pictures with professional photography gear but also focusing on the Internet and social media technology to help connect with people. Our work is primarily about connecting with people and helping everyone reach a common ground so homes are sold and people are happy.
The Internet helps with connecting with others by helping us as real estate agents learn more and are able to market more widely. It also helps us to convey our message more to those who want and need to hear our message. By remaining connected via the Internet and in real life a new agent can deliver the best value and best help whenever it is needed by clients. By delivering that high caliber value we ensure our client's needs are met and our own goals are met at the same time.
Wendy Weir | WendyWeirRelocation.com
Looking back, the advice I would give myself now as a first-year Agent in R.E. is really insightful.
1. Most of the day – you will say “I don’t know, but I will find out for you as quickly as possible.” This Builds Trust.
2. Treat each person as if they were a ‘little piece made of GOLD you are carrying around on Cotton Bunting’ (that’s from my grandma Jand it’s for all people not just clients)!
3. Drive the route of homes you will be showing at least twice, to make sure you can move easily and without becoming anxious – cause then you’ve got it!
4. Show the BEST house First – the majority of buyers will be comparing ALL the others to that one – if their Transferees – they’ll buy that one – Almost guaranteed.
5. If they ask why you showed them all the other homes, say ”I wanted you to see everything available in your price range and parameters, and I NEEDED you to have a Good one to compare them to.
6. Make sure you schedule 3 appointments every hour – this includes driving time and giving the clients, plenty of time in between houses – in case they stay longer at one.
7. ALWAYS Give other Agents the ‘Courtesy’ of Feedback – even if it’s a few days later – This will Build your Reputation and Respect.
8. If you are asking other agents or your Broker for advice – LISTEN – if you don’t agree – don’t argue, they have more experience – RESPECT that.
9. NEVER pull out a map (or GPS system) – it will not inspire TRUST from the Buyer that this is Your Territory – This is Key – I’ve referred many clients who called me after the first day they were assigned to an agent and they said “Don’t you have anybody who knows these areas with using a map or GPS system?” So of Course – the Buyer wanted to re-assigned re-read step #3)
10. Finally – give yourself 6 months to start making money – if you can’t support yourself after that – you’re doing something wrong ( re-read steps 1-9)
Debbie Gartner | TheFlooringGirl.com
1. Have a business plan. A true P&L that leads to the profit you need. Building blocks to reach that target and then break out by month and week. Be realistic and build in contingencies. Life happens. And, track it!!!
2. Develop a niche and/or positioning (and target audience). It took me 3 years to develop “The Flooring Girl” positioning. And, wow, what a difference it made. I made it easy for my customers, realtors and other professionals to recommend me (and remember me…everyone loses business cards). If they put me into google, they found me! And, of course, many of my customers love working with a woman-owned business, especially in construction which is dominated by men. It’s catchy and memorable.
Things I wish I had done sooner:
1. Hired a virtual assistant or admin –It paid for itself instantly as it allowed me to focus on more productive activities.
2. Get set up on Quickbooks and get accounting help – don’t be penny wise pound foolish…it will cost you later.
3. Blogging –It has been a huge differentiator and represents 1/3 of my biz.
Jeff Knox | KnoxRE.com
If I had it to do over again, I would probably try and find a firm where I could get a good, successful mentor.
You won't make the most money but you will gain some very valuable knowledge of the best ways to do things in the business and the right way to handle clients/problems. Jeff Knox is a Broker in the Dallas area with a focus on real estate & homes for sale in Plano Texas.
Kevin Ramirez | NCHomeBuyers.Org
Thinking back on my first year full time in real estate, I made a lot of mistakes. If I could go back in time I would advise myself to take massive and consistent action every day to generate leads. At the time, I had a campaign or two ongoing but was not doing daily prospecting activities on top of that.
Once i implemented daily lead prospecting activities into my daily actions, I saw a huge positive change and started gaining more momentum. I would definitely tell myself to figure out a way to systematize the everyday mundane tasks that must be done in order to make sure they actually get done on time every day!
Angela Duong | MADHomesUtah.com
I would like to first thank you for the opportunity to be included in your round-up. If I could go back to my first year in real estate, I would have told myself that real estate is not an easy business. You have to be diligent in advertising yourself to let people know you are in the business.
I would have made me a list of 100 people in my sphere of influence to market to. On top of that, I would have chosen a couple farm areas to market to on a regular basis.
I knew that I needed a website, but what I didn't do was customize it to the fullest. In fact, I am still a work in progress on that part. Blogging is a great way to get your website seen. Creating community pages (I am still working on this one) adds value to your website and makes you the go-to person in the area.
One of the big things you have to know is that you will get a lot of "no's" for every "yes." When you begin your career in real estate, you have to be strong and not let the "no's" get you down.
Be strong, be persistent, show your knowledge to the community, and advertise the heck out of yourself and you will do great!
Xavier De Buck | NorthcliffRealEstate.com
Listen, Xavier, I know you’ll think I’m yet another real estate agent trying to tell you what to do as you get started with your 1st year in real estate, but believe me when I say your future self will thank you for having listened to AND followed these 2 basic, yet crucial tips of advice I’m about to give you:
(1) Be very firm with your most important client (YOU!) when it comes to continuously training your skill set, and (2) make sure you religiously time-block a couple of hours every day to make those valuable phone calls to previous, current and future clients. It may not produce any results right away, but you’ll be pleasantly surprised what the effects of following up with all your clients on your business will be!
Lynn Pineda | ImagineYourHouse.com
I started out being driven to succeed. There’s not a whole lot I would have done differently other than starting my Real Estate career sooner in my life. But I did find the following suggestions to be beneficial.
Don’t be a jack of all trades. Build a niche, and zero in on an area where you’d like to focus your Real Estate business. Let people know that you eat, sleep and breathe Real Estate. You can always add to your niche at a later point in your career. This also means that you need to focus on Real Estate and no other side job outside of Real Estate. Part-time doesn’t work in Real Estate.
Focus on Real Estate and learn all that you can. It’s up to you to learn, it’s your business. Don’t rely on others to bring information to you. You want to cling to educating yourself. Don’t assume you’re going to wing it. Playing with your customer’s well being isn’t an option. Learn the steps that are required to sell a home. Learn the contracts. Learn the ropes. Don’t be afraid to ask a proven Real Estate Agent when you don’t know something. Ask questions. Seek out information over the internet, especially if your office doesn’t provide exceptional training as my Keller Williams office did.
And lastly, get writing. A Real Estate blog is a must.
And hopefully, you started early enough in your Real Estate business so you don’t have to wish as I had, that I had only started sooner in my life!
Ryan Fitzgerald | RaleighRealtyHomes.com
Looking back to my first year in Real Estate, the advice I would give myself as a new Real Estate Agent would be to trust your instincts. There are a lot of different ways to generate business whether that is leveraging your network, calling expireds and FSBOs, or even focusing on attracting leads vs. chasing them. It all depends on your personality and what you enjoy doing. For me, that was online marketing and generating leads through attraction vs. chasing.
Additionally, you need to understand what your ultimate goals are as well as why you're doing what you're doing. This will impact your daily routine. Are you working for short-term goals or long-term goals?
One of my main goals is to build the best real estate website in Raleigh, NC. One that people could enjoy using to find the home of their dreams, as well as learn tips and tricks about buying and selling real estate that saves them time and money. Ultimately, I want to have a team of people that will be following up on the potential clients that use our website daily.
One of the features people like best about Raleigh Realty is the ability to search homes for sale by Wake County school district. This feature allows someone to choose the school and location BEFORE they choose the home. Picking the location is more important than the actual home, so giving buyers searching features that zones in have been immensely helpful for them.
Remind myself every day why I am doing what I am doing. My motivation comes from building something special that the city of Raleigh can be proud of. When anyone searches homes for sale in Raleigh NC, I want to make sure they have a great experience from searching the website up until the day they move into their new home!
Having tried the corporate world with several different companies, my personality just wasn't a fit. Being boxed in from 9-5 Mon-Fri wasn't me and I knew that the minute I graduated college. I spent almost every Saturday and Sunday building my other companies at the time. Looking back I wish I was more grateful every day I woke up as a Real Estate Agent. Grateful for the opportunity to do something I love which is to help people who are buying and selling Wake County real estate!
If I could give myself one tip it would be not to listen to 'everything' you're told and to trust your instincts. I was told I could never compete with Zillow so don't bother trying to generate leads via a real estate website. Sure glad I didn't listen. Take chances, don't be afraid to be different or make mistakes, because failure is not only the best way to learn, but each failure will bring you one step closer to success. Building the right habits will take you far in this industry, without great habits you will struggle. Doing the right things, consistently, is indispensable to your success as a Real Estate Agent.
Fast forward to 2019 and I'm in my 5th year in Real Estate and have since opened a Charlotte Real Estate Brokerage alongside Raleigh Realty.
Hi there! I'm Ryan Fitzgerald, a REALTOR in Raleigh-Durham, NC and the owner of Raleigh Realty. Chances are you and I share a similar passion, Real Estate! I also have a passion for technology, sports, and people. Would love to hear from you. Drop me a note in the comments section below and feel free to share this article socially!