This post is largely taken from Bernice Ross’ previous work on Inman.
Are you new to the real estate business and would like to know your odds of succeeding? There is a profile of new real estate agent success. Here’s what you need to know.
Target Training International (TTI), the California Association of Realtors, Texas Realtors and the Real Estate Simulator have all conducted extensive research on the correlates of success in real estate. Based on this research, the questions below are highly predictive of whether a new agent will make it in the industry.
Answer yes or no to the following questions, and find out how you scored at the bottom.
1. Do you have enough income to support yourself for 6 months with no commission income?
Inadequate capitalization is the No. 1 reason new agents leave the business. Typical startup costs are approximately $2,000, and even if you sell a house on Day 1, it still takes about 60 days to close. Even the most talented new agents seldom see their first commission before three to four months.
2. Do you plan to work full-time?
Real estate success requires a full-time commitment. The probability part-time agents will succeed is only about 2-3 percent. To maximize your probability of success, save up enough money so you can work six to eight months with no commission income. Alternatively, consider working as a salaried assistant or joining a high-producing team where you will have a more a more reliable income stream.
Questions 3-7 reflect real estate behaviors associated with key sales predictors from the TTI’s DISC assessment, which also includes the Personal Interests, Attitudes and Values (PIAV) assessment.
There are four primary behavioral styles: dominance, influencing, steadiness and compliance. The fifth factor, “utilitarian,” is from the PIAV.
3. Are you willing to door-knock and cold call if that’s what it takes to succeed?
“Yes” answers indicate a high “D” (dominance) individual with high drive and a high likelihood of success. These get-it-done types are emotionally resilient and have little trouble coping with rejection — two key factors highly correlated with real estate sales success. They are seldom detail-oriented.
4. Are you comfortable striking up a conversation with strangers?
“Yes” answers indicate someone who scores high on the “I” (influencing) factor. They enjoy meeting and connecting with strangers, which is a key skill when it comes to prospecting.
Please note: According to TTI, only 5 percent of the total population has the D-I combo, but almost all top salespeople do.
5. Are you comfortable with an unpredictable environment where your schedule varies from day to day and where you will may have to work evenings and weekends?
According to TTI, approximately 60 percent of the population scores high on the “S” or steadiness factor. These individuals are slow to trust, prefer predictable working hours and a predictable salary — all of which make commissioned sales challenging for them.
Note that teachers typically score high on the “I” and “S” factors and are often well-suited for real estate. They enjoy people, they’re good at solving problems, and their ability to create a lesson plan is transferrable to creating a business plan.
6. Would you prefer to be out networking rather than trying to figure out how to improve your website or working on a spreadsheet?
Being face to face is critical for real estate success. “Detail” people — those who would rather work on their website or spreadsheet than being face to face — typically score high on the “C” or compliance factor. They make excellent accountants and computer programmers, but seldom do well in sales.
7. Are you a bottom-line person who focuses on how a technology, strategy or idea will help you get better results in your business?
High scores on the utilitarian factor are the best predictor of real estate sales success. Studies conducted by TTI show high scores on the utilitarian factor predict sales success in the United States at the 72 percent level, regardless of the person’s behavioral style.
For recruiters: Any new agent with high scores on the “D,” “I” and utilitarian factors is highly likely to become a top producer.
8. Do you have a ‘learning mindset’ and constantly seek ways to improve yourself?
The two Texas Realtors’ New Agent studies showed having a learning mindset was key predictor of whether a new agent would succeed. This is also the case for top producers as well.
Avid learners constantly seek to improve themselves, stay up to date on laws, technology and other changes. The Texas studies also showed agents who shortcut the pre-licensing training almost never succeed in the business and are often a major liability for their brokers.
9. Are you actively involved with your community, your place of worship, local charities or in other activities that help others?
“Yes” answers indicate a top characteristic shared by a substantial majority of top-performing agents. According to Steve Kantor’s research in Billionaire Real Estate Agent – Lessons Learned, about two-thirds of these mega-producers cited being active in their community as a key factor in their success.
10. What are your income expectations for your first year in the business?
The two Texas Realtors’ studies showed very few agents make more than $25,000 their first year since it takes time to develop their pipeline of leads, put properties under contract and close them.
Encourage agents to think of their first year in real estate more as an apprenticeship to learn the business. This is another reason it is important for agents to be adequately capitalized.
How the scoring works:
On questions No. 1-9, the more “yes” answers an agent has, the more likely he or she is to succeed as a real estate salesperson. Agents with scores from 7-9 are very good candidates. Anyone who scores 4 or less is probably a poor fit for sales but may be good in an administrative, technology or compliance role.
Real estate can be a highly rewarding business provided you are a self-starter, can handle rejection, are emotionally resilient, and can handle the irregular hours and income fluctuations.
Bernice Ross, President and CEO of BrokerageUP and RealEstateC
