Congratulations on becoming a real estate agent! Now brace yourself for some hard financial truths. There are certain fixed costs, such as your license, memberships, and broker fees. But many newbies spend far too much on products and services that simply won’t offer a good return on investment. As you launch your career, you’ll want to avoid these common money mistakes new real estate agent make. Your wallet will thank you!
Buying Flashy Marketing Packages
While building your brand is important, you don’t need to spend hundreds—or even thousands—of dollars on marketing as you start your career as a real estate agent. Invest in a good logo by hiring a professional graphic designer; one who specializes in the real estate industry is a plus. Beyond that, most of the marketing you do during the early stage of your career should be based on building personal relationships. Early in your career, all you really need is a professional business card with your logo and a simple, straightforward website. Marketing bells and whistles don’t sell houses—you do!
Forgetting to Save for Taxes
Ignoring this detail is one of the most expensive money mistakes new real estate agents make. If you’re coming to the world of real estate from a traditional job, it may be a shock to discover that you need to pay your income taxes out of pocket. State and federal taxes, not to mention Social Security, add up quickly, and failing to save in advance can lead to disaster. An accountant can help you determine the right percentage to save from every commission check and prepare your taxes when the time comes. Yes, having an accountant costs money, but a good tax preparation service more than pays for itself!
During your first year or so of business, paying for leads is a costly blunder. Instead of buying contact information, look to your own contacts first. Your phone and social media accounts are goldmines for potential clients. Even if no one you know is looking to buy or sell right now, chances are good they know someone else who is. If you’re still struggling to find business, don’t forget open houses. A lot of new agents feel like open houses are a waste of time and effort, but more seasoned real estate agents can tell you it’s worthwhile.
Not Practicing Scripts
Why should you practice scripts? After all, you know the business and feel comfortable talking to people, so memorizing pre-written scripts is a huge waste of time.
If you think that’s true, then you’ve never been caught off guard by a client with strong opinions or fumbled for the right words when answering the phone with a potential buyer. While you don’t want to sound overly rehearsed, you absolutely should practice scripts so that you have the language you need within easy reach no matter what comes up. You can source scripts from continuing ed classes, mentors, and even other agents. There’s no need to reinvent the wheel when it comes to client communication.