If you’re new to real estate, or simply struggling to get clients, then this blog is for you!
But first, let’s frame the conversation here by answering this important question…
What’s your goal for real estate?
Are you in real estate because you are waiting for your next job? Then this blog isn’t for you.
Are you in real estate because you see dollar signs? Then this blog isn’t for you.
However, are you in real estate because you love helping people, and you love learning about real estate, and you want to make money doing your passion? Then this blog is for you!
Now those questions may sound simple but it’s so important to start with an end goal in mind.
And if your end goal is to have a career in real estate, and to build a consistently growing real estate business, then this blog will help you understand:
- WHAT to THINK about on a daily basis
- WHAT to DO on a daily basis
- HOW to get clients & referrals
- WHY certain activities work and others don’t
Now let’s get started!
Tip #1 – Model Success
When you enter the real estate industry you should find agents who have the business AND lifestyle that you want and model them!
Now first, notice I said lifestyle too, and didn’t just talk about business.
Because here is the reality.
There are agents who make a lot of money, but work 80+ hours per week, are unhappy, unhealthy, and divorced (or getting there).
There are agents who make 6-figures and who work 40 hours per week, with tremendous time flexibility to see their family and friends, give back to their community, and invest in their health & happiness.
So step #1 – figure out your goal.
Do you want to have a team or be a solopreneur?
How much money do you want to make?
How much do you want to work?
Get clear on what you want.
Then Step 2 – Find agents who have what you want and ask them how they got there.
Also notice how I didn’t say “ask them what they’re doing,” because that’s now what you need since you’re starting from scratch.
The key is to learn HOW agents went from making no money to making lots of money, because what they do in their business AFTER they are making money is different than what they did TO make money.
The great thing about real estate is that there are so many people you can talk to who are 1 step ahead of you, and who have exactly what you’re striving for.
So talk to people who have achieved the result you’re looking for, get their blueprint, and follow it.
Don’t try to recreate the wheel.
Do it Now.
Tip #2 – Respect The Consumer Buying Journey
Did you know that all consumers buy all products and services in the same way?
McKinsey Consulting Group – one of the largest strategy consulting firms in the world figured this out and they call it “The Consumer Buying Journey.”
And have you ever wondered why 50% of agents fail in their first year and 95% fail within 5 years?
It’s because they don’t know how to get clients and make enough money to survive in the business.
Now, do you want to know WHY most new real estate agents don’t get clients?
It’s because the things they do to get clients don’t work!
…and they don’t work because they don’t align with the way homeowners figure out which agent they’re going to use to buy or sell a home
…and they waste a bunch of time and money doing the wrong things until the time and money has ran out!
So let’s make sure this doesn’t happen to you by teaching you the Consumer Buying Journey!
The first phase of the consumer buying journey is “living life” with no need to buy any service.
OK so just imagine a homeowner, living their life, with no need to buy or sell a home.
Important Realization #1 – this is the majority of the time!
According to the NAR, the average homeowner moves every 14 years.
This means that for 13 years, they don’t need a realtor!
So should you ONLY talk to homeowners who have decided that they are looking to buy or sell?
And THIS is a critical mistake made by so many agents.
I’ll explain in a second, but let’s progress to phase 2 of the consumer buying journey – Awareness, meaning, at some point, a homeowner becomes aware that they want to buy/sell a home and they need a real estate agent.
Now after a homeowner becomes aware that they need a real estate agent, do they start looking at flyers, bus benches, online ads, and magazines to find an agent to work with?
The first thing a consumer does after they become aware that they need a product or service is to THINK to themselves, “is there a brand that I know, like, trust, and want?”
This is called “Primary Research”, which is Phase 3 of the Consumer Buying Journey, and when it comes to real estate, a homeowner is thinking to themselves, do I have a relationship with an agent that I like and trust, and whom I want to use for this transaction?
If the homeowner answers YES, then they don’t ask anyone for a referral or turn to any form of advertising, they just contact the agent and say something like, “hey can you come list my house,” or, “hey can you help me buy a home?”
Now think about this for a second – how long do you think it takes for a homeowner to think of an agent that they know, like, trust, and want to use?
The brain moves quickly.
So getting back to my point about WHY “waiting” for homeowners to move before you talk to them is a critical mistake – it’s because you cannot wedge yourself into that moment, that last seconds, when they become aware that they need an agent, and when they think of one.
The only way to be the agent who is thought of is to have invested time and money into that relationship before they became aware that they needed an agent so that when they became aware, they think of YOU!
So remember this…
If you want “come list my house” and “help me buy a home” conversations, then you MUST spend time and money building relationships with homeowners BEFORE they need you.
Now does every homeowner know, like, and trust an agent? No.
Just like not every consumer can think of a brand they trust when they become aware that they need a product or service.
Which is why phase 4 of the consumer buying journey is called “Secondary Research”, which is commonly known as “asking for recommendations and referrals.”
Now how long does it take for you to ask your friends and sphere of influence for recommendations on places to go, things to do, and services to use?
You just call or text them.
…and it’s the same thing for homeowners!
And just like I said above, do you think you can wedge yourself into this moment to talk to the influencer who the homeowner is going to turn to for a recommendation of who to use, so that you can give value to the influencer to make them want to refer you?
So how do you get referred then?
Same as before, you invest time and money into people, so that when their friend comes to them asking what agent to use, your name gets given.
Now what if a homeowner doesn’t know anyone who can give a referral? They turn to advertising. This is Phase 5 of the Consumer Buying Journey called “Tertiary Research.”
And after a consumer looks at a bunch of advertising, they proceed to Phase 6 of the Consumer Buying Journey, where they interview their options.
Then they move onto phase 7 which is where they evaluate their options.
And finally, the consumer buying journey ends in phase 8 where they make a decision and buy the product or service.
Now as it pertains to real estate, there is one statistic that you must know.
76% of sellers find their agent through a relationship and referral, and only 24% through some form of advertising.
(Side Note – 65% of buyers find their agent through relationships and referrals, and only 35% through some form of advertising)
Therefore, where should the majority of your time and money be spent?
Your time and money should be spent on people BEFORE they need you and BEFORE their friends ask them for referrals.
End of Story.
Do NOT wait until people are moving to talk to them.
Respect the Consumer Buying Journey and make sure the majority of your sales & marketing activities are on people before they need you.
Tip #3 – Follow the KISS Principle and Keep It Simple
… you thought it, I never said it 😉
But in all seriousness, business is simple!
Step 1 – Find out what your prospects & clients want
Step 2 – Go get it
Step 3 – Give it to them
And good news … The NAR got homeowners to fill out surveys to tell the industry what they want!
Here’s the list
It all boils down to:
- Do you have a good reputation?
- Do they trust you?
- Do they like you, like a friend?
- Do they think you’re a local market expert?
- Do they think you care about them (vs the paycheck)?
- Do they think you’re responsive?
So all you need to do is make sure all the actions you take make the answer to the above, YES!
Now let’s think about ALL forms of advertising which includes
- Online advertising like: Facebook & Google Ads, Zillow Ads, Retargeting
- Display Advertising like: Bus Benches, Billboards, Magazine & Newspaper Ads
- Print Marketing like: direct mail, flyers, postcards
Does it improve your reputation? No. In fact, social conscious consumers (which is the majority of people now) probably think less of you for wasting paper and millenials (the largest group of buyers) will laugh at you for doing bus benches and billboards.
Does it make them trust you? No. This is 2021. Everyone by default thinks that everything in an ad is a lie!
Does it make them like you more? No. Just think about the ads and spam you get… it irritates you doesn’t it?
Does it make them think you’re a local market expert? No. Again, even if you say you are in your ad, everyone just thinks you’re making that up! Let’s be real here!
Does it make them think you care about them? No. Advertising to get business is literally the opposite of caring about someone to get their business.
Does it make them think you’re responsive? No. Advertising by definition, is an annoying form of one-way communication.
So why does advertising work for some agents?
Because they’re getting the people who know no one, have no referrals, and are desperate to get a deal done and do not care who it’s with, and will likely squeeze the agent for their commissions because they see you as a commodity – a means to an end.
And do you even want that business?
(Sidebar for all the devil’s advocates reading – Yes, if you have the budget, and you need write-offs, can you do advertising and make money, absolutely, but we’re assuming you’re a new agent or one without a big budget, so in that case, no, you do not want to spend your money on advertising)
So what’s the solution?
How do you give homeowners what they want?
The first step is to ask ourselves, “what do they want?”
Now luckily for you, after working with over 350,000 locals in North America, we have the answer!
- Local News
- Local Events
- Local Deals, Sales, & Specials
- Local Business Information
- Local School Information
- Local Job Opportunities
- Local Items for Sale
- Local Connections
- Local Reviews
Sounds like a Local Newspaper doesn’t it?
The reality is that most neighbourhoods don’t have one and that is a HUGE Opportunity for you!
(and even if they do, that’s one source, from a for profit organization, that now makes consumers think it’s biased)
So the insight is this – your prospects want local information from a person they trust!
Now, how can you give them this information?
- Call them
- Text them
- Email them
- DM them on social media
- Post about it on your website and social media
- Tell them in person
- Create blogs about it
- Create videos about it
There’s a reason why everyone in the industry is talking about video marketing, blogging, SEO, and social media…it works!
And you want to know why it works?
It checks all the boxes for the homeowner! It gives them what they want!
Does it improve your reputation? Yes! If you put lots of content online, you show up a lot. This improves your online reputation. And if you give people information they want, that improves your reputation with them. And if they see others liking, commenting, and sharing your content, that boosts your reputation even further. Add in client testimonials over time, and your reputation will be on point!
Does it make them trust you? Yes! When you give people accurate and timely information that helps them live a better quality of life, they trust you more! This is why you may hear real estate coaches talk about “being a trusted advisor.”
Does it make them like you more? Yes! If you give value to people, they go “thank you,” and whether they say this or not, their brain says, “I like this person.”
Does it make them think you’re a local market expert? Yes! If you’re keeping people up to date with what’s going on in your geographic farm area, that shows them you ARE a local market expert.
Does it make them think you care about them? Yes! If you are giving people what they want vs asking them for what you want, it is literally showing people that you put other people’s needs first, and homeowners MUST think and feel this before hiring you.
Does it make them think you’re responsive? Yes! Because if you’re constantly in communication with them, giving them information, and asking what they need, then you are showing them that you’re a proactive service-based professional which is exactly what they want.
So keep business simple:
Step 1 – Find out what your prospects & clients want
Step 2 – Go get it
Step 3 – Give it to them
Tip #4 – Focus on Influential Homeowners (aka Business Owners & Local Professionals)
There’s a very famous business strategy book called, “Blue Ocean Strategy.”
Basically it says that in business there are two types of oceans: the red ocean and the blue ocean.
The red ocean has lots of sharks in it, going after the same fish, and it’s just red with blood from sharks eating sharks, trying to get after the fish.
The blue ocean has no sharks in it, because the sharks don’t think there’s fish over there, but usually, they’re wrong, and there’s a strategy to find fish, that you can eat, so you’re full, and you don’t have to worry about fending off other sharks to get what you need to feel full.
So the book encourages business owners to find a blue ocean and create a strategy to get clients in that blue ocean.
Now when it comes to real estate, this blue ocean is business owners and local professionals, or what we like to call, “Influential Homeowners.”
If you ask 99% of realtors who they’re trying to target, they will say “homeowners.” This is the red ocean.
Therefore, no matter what strategy you come up with, if it’s based on targeting homeowners, then you’re going to fight against other agents for that business.
Now let’s compare and contrast homeowners with business owners, because it’s clear that it’s easier to make money off business owners!
First, we are in agreement that you need to talk to people in order to get their business, right?
Ok, so answer this question, “when can you talk to homeowners?”
Before the internet, it was easy. Evening and Weekends.
But now, people lead busy lives, and it’s hard to know when you can contact them! Therefore, you can waste a lot of time trying to get in touch with them if you follow the old school cold calling and door knocking rules of 9am-12pm and 4pm-7pm.
However, ask yourself this question, “when can you talk to a business owner?”
Easy! Look at their website. The answer is right there. They tell you when they want to talk to people.
Furthermore, a homeowner doesn’t want to talk to an agent. But a business owner wants to talk to a fellow business owner!
Therefore, Reason 1 why focusing on business owners is better than homeowners – they are easier to talk to.
Next, we’re in agreement that you need to help someone with their life in order to make them want to use you and refer you business right?
Ask yourself this question, “how do you help a homeowner with their life?”
It’s hard to answer isn’t it? Because you would need to know a lot about their goals, challenges, family, friends, occupation, hobbies, and more.
Now ask yourself this question, “how do you help a business?”
Easy. Give them referrals. Promote them. Get them more customers. The key to their heart is simple – make them money!
And after you help them make money, what do you think they’re going to want to do for you?
They will want to help you make money!
So reason #2 why focusing on business owners is better – they’re easier to help.
Next, we’re in agreement that if you want word of mouth marketing about your business, you need people in your database who not only want to promote you but who also have lots of people to promote you to, right?
Therefore ask yourself this question, “how many prospects the homeowners in your database interact with on a daily basis?”
Not a lot. Most people keep to themselves. They go to work. Come home. Talk with their immediate family. And then go to bed and repeat.
Now ask yourself this question, “How many people do business owners interact with on a daily basis?”
Not only do they interact with their immediate family, but they interact with dozens to hundreds of people per day!
And if they owe you a favour because you’ve done something for them, they are going to promote you to their audience!
Furthermore, ask any business owner if they want to be a trusted source for recommendations to their clients. They will ALL say yes.
Now ask a homeowner who is just an employee somewhere if they care to give recommendations and referrals to their database. Most will say no.
As a result, reason #3 why focusing on business owners is better than homeowners is because they interact with your prospects on a daily basis and have a higher potential to promote your brand and refer you business.
Next, let’s compare referrals from a business owner vs a homeowner.
Now we have all experienced our friends on social media reaching out to everyone in their network asking for recommendations and referrals.
And what happens is you get a bunch of people tagging people in the comment section.
What’s the risk to the person who throws a name in the hat? Nothing. And that IS the problem.
See if your friend gives you a referral for a product or service that ends up not working out, there’s no negative ramification.
However, imagine if a business owner gave you a referral for a product or service that didn’t work out. You would think “jeeze, that business owner doesn’t know what he’s talking about” and even worse “that business owner screwed me over with that referral.”
And what’s the ramification of that? You spend less to zero money at that business and don’t refer them business.
THAT is a HUGE deal to a business owner.
Therefore, WHEN business owners refer products and services to their customers, they are 100% confident in those referrals because they know the negative ramifications of giving a bad recommendation.
As a result, when you get a referrals from a business owner, they are stronger and they close more often because the person who is being referred knows that the business owner wouldn’t give a name that they don’t trust.
So reason #4 why you should spend more time and money giving value to business owners is because their referrals are higher quality.
Finally…and most importantly…
Reason #5 why there’s a greater opportunity in focusing on business owners instead of homeowners is because they are homeowners too, typically with more money to spend as well!
That’s why we call them influential homeowners.
Reasons #1-4 talk about the impact and influence that business owners can have on your business.
But Reason #5 speaks to the simple truth that business owners are homeowners too, and if they’re successful (which you can easily tell), they definitely have more money to spend on higher-priced homes AND real estate investments.
Ok so business owners are:
- Easier to talk to
- Easier to Help
- Talk to your prospects daily
- Give more referrals
- Give stronger referrals
- Buy and Sell Homes too
- Have more money to spend on real estate
Therefore, start spending more time and money on turning these people into your raving fans.
SECRET – The Businesses and Professionals who Refer the Most Business
After working with thousands of agents, and helping them get tens of thousands of referrals we have seen the data around who sends the most referrals to agents.
#1 – Home Service Professionals who fix homes up before they sell. These include: Painters, Landscapers, Plumbers, Renovators, Handymen.
#2 – Personal Care Professionals who spend a lot of time with their clients, chit chatting about life. These include: hair stylists, barbers, aestheticians, personal trainers.
#3 – Businesses and Professionals whose industry is involved in Major Life Events that Trigger the Need for a New Home. This includes: Birth, Death, Marriage, Divorce, Employment, Unemployment.
Now how do you get their referrals?
Easy – Give them referrals!
Tip #5 – Treat Your Business Like A Business
If you treat your business like a business, then it will pay you like a business…the sky is the limit.
If you treat it like a hobby, then it will pay you like a hobby…not much
If you treat it like a dream, then it will pay you like a dream…nothing
Now what does this really mean?
It means you need to spend money to make money like every business in the entire world.
It’s a fantasy to think you can make $1,000,000 and only spend money on your car and real estate fees.
And if you only spend $5,000 on your business, like you would on a hobby like golf, then you’re not going to make a lot of money.
Just trust us on this.
You will never spend $5,000 a year on your business and make $500,000.
But you know what happens ALL THE TIME in business.
Business owners spend $50,000 on their business and they make $100,000 – $250,000.
Now there is a SKILL to spending money and that’s for another blog.
And having immigrant parents who just went to school, got a job, saved money, and retired at 70, I know firsthand that it can feel uncomfortable to spend money
… at first.
However, after you get a win, where you spend money on giving value to people in your database, and then they give you their listing or a referral, your brain will start to get conditioned to do it again.
And then when you spend money on getting people to do work for you so you have more time to prospect and serve your clients, and it helps you increase your revenue, you look for even more ways to spend money to make money.
And even though your expenses are increasing, when you see your total profit increasing, you will start shaking the bad habit of not spending money and saving every penny you have.
See when you’re an employee, spending less, and saving more IS the formula, because it’s not easier to make more money.
But when you own your own business (which spoiler alert, you do!), where you have an uncapped income potential (which you do), this formula does NOT work!
Therefore if you want to have a career in real estate, and have a growing business year in, year out, so you can pay off debt, and have more resources for your family and future, then you MUST put money into your business, FIRST.
I know it’s scary, especially if you haven’t made any money in real estate.
BUT just think about how EVERY great business in the world gets started.
They invest capital into the business!
This means they either take some of their savings and/or they get a loan!
So it’s NORMAL if you do this too!
SECRET – How to Effectively Spend Money…Get a Guarantee!
There’s a lot of education around spending money properly, but if there was ONE secret to spending money as a business owner to guarantee that you got a positive return on your investment, it’s to GET A GUARANTEE from the person or company that you’re giving money to!
It’s that simple.
If you give money to a contractor or an employee – get a guarantee on the result you are going to get from them.
If you give money to a company – get a guarantee on what you are going to get from their product and/or service.
For example, if a marketing or advertising company contacts you and they cannot guarantee that you will make more money than you give them, then say no and find a company who will (they exist!)
Notice how I didn’t say impressions, or clicks, or views, or leads because those metrics do NOT guarantee that you will make MONEY.
So when you’re getting started, and when you have limited money to spend, make sure you give it to a person and/or company that can guarantee for every $1 you give them, you make $2 or more, or you get 100% of your money back.
Summary of Tips on How to Make Money as a New Real Estate Agent
Here is a summary of the principles for how to grow your real estate business:
- Spend Time & Money on Talking to People & Giving Value Before They Need You
- Focus on Activities that Help You Build Friendship & Trust
- Focus on Activities that Help You Demonstrate Your Reputation & Knowledge About the Neighbourhood
- Get to Know Prospects and Make Them Feel that You Understand Them
- Spend Time & Money Build Relationships with Influential Homeowners (ie Business Owners and Local Professionals)
- Focus on Having More Meaningful Conversations, Every Single Day
- Leverage the Law of Reciprocity and Give Information and Referrals
- Spend Money on Your Business with Guarantees