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This post is largely taken from Bernice Ross’ previous work on Inman.
For many years, the top producer in my office had “BAK2BSX” as the license plate on his Mercedes convertible. When it comes to being a highly successful real estate agent, the basics always matter.
So many new agents don’t make it past their first year or two of business. Most fledgling agents fail because they don’t master the business fundamentals and build on those fundamentals throughout their careers.
Experienced agents often run into dips in their production for a similar reason: They get too busy and forget to stay focused on the fundamentals that led to previous successes.
So, if you’re new to the industry or find yourself plateauing, it might be time refocus on the basics. Here’s where you start.
The first 3 fundamentals every new agent must master first
When you’re a new agent, there are three basics you must master immediately. After you genuinely nail these three, you can move on to the six that follow them.
1. The contracts
Your clients are counting on you to understand the contracts. If you can’t fill out all the required transaction contracts (agency, purchase agreement, listing agreement, disclosure documents, etc.) without assistance, start practicing filling them out until you can do so alone.
You must also be able to explain the various terms of the contract, including:
- How initial deposits are handled.
- The difference between the down payment and closing costs.
- How the dates for contingencies work.
- All the terms associated with contract and offer trends, especially what’s hot in your area.
- How transactions are closed.
- Why your company does or does not recommend signing an arbitration provision.
If you haven’t learned how to do all these things, it’s time to review your sales licensing training or sign up for additional training on these topics.
2. The inventory
The top producers know the inventory cold. They can walk into a home and price a property without even looking at the comparable sales.
When you’re new, if you’re not studying contracts or conducting lead generation, see as much of the inventory as possible. Track what you see using Evernote or Google Docs.
When you walk into a recently listed house, estimate what you believe the selling price will be. Then track it to see how close you came. If you can’t see some properties in person that are in your market area, check out the MLS photos, virtual tours, online listings, etc., so you are at least familiar with the exterior and interior of the property.
We’ve come a long way in the past couple of years with online listing tools. Most of what you need to know, you can find at your fingertips.
As part of the process of learning the inventory, your clients will also expect you to be able to do the following:
- Accurately price their property, market it successfully and close the transaction.
- Name the types of properties available in each price range, including the price of entry-level homes.
- Identify the best-priced properties in each area.
- Explain how much it costs to purchase a typical three- or four-bedroom home in your area as well as a typical one- to three-bedroom condo.
- Know who the builders are, their reputation, the quality of homes they build, and the price ranges they offer. In this tight-inventory market, you should know all you can about new construction.
- Know the various subdivisions, including the current prices and characteristics of each area.
3. Contact database
Whether you purchase a real estate customer relationship manager (CRM) — which is a necessity, in my opinion — or simply use an Excel spreadsheet, it’s essential that you organize your contacts and leads in one place.
To check out your options, tune in to Craig Rowe’s weekly column here on Inman or wade through his past product reviews here.
The next question is, “Which one is best?” The answer is simple — the one you will use.
Now that you’ve mastered those, focus on these 6
In addition to the three basics above, all agents also need to master the following:
1. Market statistics
You should know whether your market is in:
- A seller’s market (less than six months of inventory with upward pressure on prices)
- A flat or transitioning market (six to seven months of inventory)
- A buyer’s market (eight or more months of inventory with downward pressure on prices)
Today, most MLSs can provide you with this data. Also, be sure to watch your sales board in your office and track MLS statistics.
Inman’s Craig Rowe recommends Attom Data Solutions, Redfin’s research, DashCMA (now part of Inside Real Estate) and CloudCMA (now part of Lone Wolf) — all of which are also great sources of market data for sellers and buyers.
Once you have this data, here’s what to do:
- When inventories decline, prospect for listings.
- When inventories increase, prospect for buyers.
- If you can afford it, use data analytics tools to predict this data down to the individual market area. These tools are probably the best listing conversion tool available in the marketplace.
2. Nothing happens until someone generates a lead
Lead generation is as important as going on a listing appointment. The reason? If you’re not feeding your pipeline with leads, there will be no listing appointments, buyer showings or closed transactions.
Determine where you get the most leads (geographically and from what type of prospecting), and focus your lead generation efforts there. Make prospecting for leads a priority every day.
3. Agents who respond first get the business
Many agents generate leads but never follow up on them. This statement is especially true for online ads, where estimates range from 50-75 percent regarding how many these internet leads go unanswered.
There are plenty of options for quick response, including Opcity and chatbot technologies.
4. Face-to-face appointments win the day
The 2018 NAR Profile of Buyers and Sellers showed that 75 percent of the sellers who list their homes only interviewed one agent.
Around the time of the report, I spoke with Ben Rubenstein, the founder and CEO of Opcity, who found a similar pattern — 90 percent of agents who closed an Opcity lead met with the client face-to-face within 12 days of generating the lead. Get face-to-face with as many potential clients as possible as safely as possible.
5. Stay in regular contact with your sphere and past clients
Do you stay in regular contact with your sphere and your past clients? If not, a simple way to achieve this goal is to identify the top 150 people you know (sphere, family, friends, past clients) who are most likely to send you a referral.
The secret is to interact with at least five of them every day of the month (that’s all 150 in 30 days) by posting a response (not just a “like”) on what they post. “Touching” them at least once monthly is one of the best ways to stay top-of-mind.
Many real estate professionals just had a tremendous year; the post-close follow-up and consistent relationship-building are what will ensure that your 2020 clients become lifetime clients.
6. Referrals are still the name of the game
Year after year, study after study, referrals continue to be the primary source of closed business for new and experienced agents.
The three best times to ask for a referral are:
- When you first start working with a client.
- When you place a property under contract.
- When you close the transaction.
Also, don’t forget to ask those past clients who loved your services if they know someone who is thinking about buying or selling a home.
The great thing about the basics is most only take a little time and effort. You don’t need to spend tons of money on marketing materials or web leads — just focus on being you: Connect with people you care about, and give them such excellent service that they will happily refer you to their friends and acquaintances.
Bernice Ross, President and CEO of BrokerageUP and RealEstateC
