Hiring a new real estate agent to join your team can help increase sales, expand your client base, and generate new business leads. While bringing on a new team member can be exciting, the process is never without a few hiccups as the agents find their footing.
To help your team grow successfully, you’ll need to know what problems could come up along the way so you know how to prepare for them. We’ll walk you through six of the most common mistakes your new agents are likely to make — and what you can do to prevent them from the start. As an experienced real estate professional, your advice can help your new teammate tackle the ins and outs of the job with ease.
Mistake #1: Having unrealistic expectations about timelines.
According to Shannon Thomas, a licensed real estate broker in the Indianapolis area, new agents are so sure they’ll make money quickly that they don’t budget their own finances properly. While there’s nothing wrong with being excited about business prospects, it’s important to help them stay grounded and manage their expectations.
“Real estate agents come on board with unrealistic expectations of a sale right away,” says Thomas. “Some new agents may have strong leads. But more likely than not, it’s going to take some time for the agent to build up their base and make that first sale.”
Prevention Tip: Let them know how long it takes to close a sale.
Be straight with your agent about how long it usually takes to complete a sale, as well as how much they’re likely to take home (after fees and taxes). Thomas says it can take anywhere from 30 to 45 days to complete a sale and get paid. To accommodate this reality, she recommends that real estate agents -- and particularly new agents -- make sure that they have at least six months’ worth of savings in the bank.
Mistake #2: Not following through on all possible leads.
Thomas says it’s important for agents to follow through on all leads, not just the ones that are a promising or guaranteed sale. She says that sometimes, agents who are new to the business won't follow up on internet leads, or ones where the buyer isn’t pre-qualified. This is a big mistake.
“Having leads is one of the most important things that you have out there to get you going,” says Thomas. “Without having a lead, you don’t have any business.”
Prevention Tip: Share ways to go the extra mile, even on “dead end” leads.
Work with your real estate agent to create a plan of action for new leads that provides a timeline and ways to follow up. Thomas’ advice is to follow up with everyone, even if the individual or couple hasn’t completed the home-buying prequalification process. She suggests that brokers guide their agents on how to build a relationship (and let them know what types of expenses they might incur along the way are tax deductible).
“Sometimes, going the extra mile can help you earn new business,” she says, and sometimes new agents don’t know how to do this, especially if their budget is tight.
Mistake #3: Not being familiar with local zoning and permitting laws.
Your real estate agent may or may not be a local. Regardless, it’s an agent’s responsibility to be familiar with the local zoning and permitting laws; it’s not just beneficial to the agent, but to the client as well. Failing to stay up-to-date on these regulations can create problems during the buying process, especially if the buyer has a question about installing a new fence or putting in a well. Giving the wrong information, or even failing to accurately disclose information, to a client can result in a lawsuit, especially once the paperwork’s been signed. In fact, misleading clients is one of the top reasons why agents can be sued.
Prevention Tip: Put together a new real estate agent training manual that covers common zoning and permitting regulations in your area.
Your training handbook should contain everything you want your new agent to know about permitting and zoning laws, along with any other city and county regulations that potential buyers and sellers may have questions about.
“There are some things that aren’t taught in classes, and that’s your local jurisdiction and how that impacts you to help the client,” Thomas adds.
In addition to creating a training manual, Thomas also suggests that you encourage your new agents to meet with local zoning authorities to identify common problems, as well as review new laws. This will help the agents avoid giving misinformation, and ensure that they’re doing the best jobs possible with their clients’ needs in mind.
Mistake #4: Putting your marketing efforts in the wrong areas.
Though closely aligned, paid and organic marketing are two very different beasts. At a very high level, paid marketing (as its name suggests) is any strategy that involves paying to get your business’ brand in front of your target audience. You can do this by paying for ads that appear in Google search results and on social media channels; you can buy ad space in a publication; you can pay to have content you write appear as “sponsored content” on a specific website; you can even sponsor an event that’s relevant to your audience.
Organic marketing, on the other hand, is all about getting your business’ brand in front of your audience for free. With this type of marketing, the goal is to engage with your target customers in a genuine and meaningful way, which in turn works to establish trust with them. You can do this by creating blog posts that educate them on topics they care about and provide the answers to their questions. You can do this by being active on the social media channels they use the most and creating content that encourages them to engage with your brand. Self-promotion doesn’t come into play with this type of marketing; you’re simply trying to build a relationship with your audience that makes them view you as an invaluable and relevant resource for them (and ultimately keeps you top of mind if they ever need your services in the future).
As you can see, both types of marketing can be highly effective in helping you develop and promote your business’ brand, but they get at this goal in very different ways. One isn’t better than the other: They both have their pluses and minuses. But because paid marketing can bring in more results in a shorter period of time, many new real estate agents can become infatuated with this approach as they see the leads pouring in from a Google ad here or a sponsored article there. However, it’s easy to get carried away and start to overspend on these opportunities. (They do add up fast, and sometimes they cost more than what you get back from them.) For this reason, it’s important for agents to have a marketing strategy that blends paid and organic efforts.
Prevention Tip: Use your own experiences with marketing campaigns to guide your new real estate agents' efforts.
As a seasoned real estate professional, you’ve probably already figured out what your business’ “secret sauce” is when it comes to your marketing strategy. You’ve worked hard to strike the perfect balance between paid and organic marketing efforts that gets you results. Now, it’s time to pass that wisdom onto your newest team member. They’ll reap the benefits of your current marketing efforts by learning what you do and putting his or her own spin on it. Explain what you expect and then show where you provide freedom to test.
Be sure your new agent knows what marketing and branding services your office provides, as well as what your budget is for ad spend. If they’re looking for new ideas, encourage them to try creating a newsletter or blog (local topics are always a huge hit) or growing Instagram organically.
Mistake #5: Getting involved in the ‘drama’ of a sale.
Many agents get caught up in their clients’ concerns, most of which arises during the buying process. This can include problems like being unable to secure financing through a certain lender, or struggling with issues that come up during the home inspection process. On occasion, new agents can become overwhelmed by these controversies, instead of focusing on how to help their clients fix the problem.
Prevention Tip: Help your agents grow their network of service providers and vendors.
As a seasoned broker, share a few of your favorite service providers. This way, when your agent has a buyer (or seller) and is in need of a solid recommendation, the agent can refer to your approved list to help keep the process moving along.
Mistake #6: Giving financial or legal advice to a client.
New agents may feel like they’re helping out a client by offering an opinion during a sale, but it can land them — and possibly even you — in legal trouble. A real estate agent shouldn’t be giving input or direction when it comes to a client’s finances or legal issues. This is not only due to the conflict of interest inherent in such a relationship (i.e., the more a client spends, the more money an agent stands to make), but also because a real estate agent is not a financial advisor or lawyer, and therefore isn’t qualified to give such advice.
Prevention Tip: Coach your agent on how to answer tricky questions.
“How much should I offer the seller?” “How much should we accept?” “How much should we deduct from our offer for the [insert legal issue here]?” “Is this a good loan?” “How much will my taxes go up after we renovate?”
Tricky questions are going to come up, and your green agent needs to know how to delicately defer them.
First thing’s first: During your onboarding process for new agents, go over the basics of how to interact with clients. Give examples of financial, legal, and tax questions you’ve received in the past and how you’ve responded to them. Thomas says that brokers should help new hires commit these important logistics to memory in the form of an employee handbook, written alongside a list of other important rules on the whiteboard of the conference room (or other commonplaces within the office), and through procedural review meetings several times a year.
Adding new agents to your team is great for business growth, but make sure you’re leading and teaching along the way. In the end, teaching agents about industry best practices isn’t just about growing your business: It’s about protecting it.
Image courtesy of iStock.com/DNY59