If you are a real estate agent and you want to grow your business, maximize your take-home income, and actually have a life at the same time, there are three big HORRIBLE career-crushing mistakes you must avoid as if your financial future and sanity depended upon it.
Hi, I’m Mike Regan. Before I got into real estate, I was a process improvement consultant and the author of two books on the subject. Then, as a top-producing real estate agent, I sold over 750 homes in my 17-year career. Now, as the founder and CEO of Relevate Real Estate we’re pumped to have a higher percentage of top producing agents than literally any other mid-sized or larger firm.
In a previous blog, I explained three terrible, and unfortunately extremely common, career and life-destroying mistakes I see agents out there making every day. In this blog I’ll explain three more HORRIBLE mistakes agents frequently make that crush their ability to grow and prosper.
Rather watch a video? Check it out below!
the first mistake is
1. Giving buyer rebates
The first mistake some agents make, and this may be the worst of all the terrible and horrible mistakes, is to give Buyer Rebates. This means to give part of your commission to the buyer as an incentive to use you.
This is the same as discounting your listing commission, as we discussed in our previous terrible mistakes blog, except it’s even worse because normally buyers don’t even pay commissions! The listing agent normally pays the buyer’s agent out of the commission they receive from the seller. So the buyer isn’t even really getting a rebate because they didn’t pay anything. It’s just a bribe from the agent!
And again, just like discounting your listing commission, after you do it, the buyer won’t respect you or listen to your advice. After all, by doing this you are showing a big lack of respect for your own profession and your own abilities.
Next, you’re demonstrating your lack of negotiating ability. After all, if you’ll give up your own family’s money so easily while your client is right there watching you, your client can only assume you’ll give up their money while they’re not watching and you are negotiating on their behalf.
Also, you’re giving up a HUGE part of your take-home income. After all, if you give your client 1% of the purchase price of the home, you are giving away 33% of the 3% commission, which for most agents is equal to HALF of their take-home income after all expenses.
Finally, once you start this, it’s almost impossible to stop. When you get referred by past clients, the referrer will say, “You should use this agent, they’ll give you part of their commission!” Then you’ll be forced to give the rebate because after all, you gave it to their friend, and now you have to give it to them. You don’t want that to be you.
“Oh but Mike if I don’t give a rebate I won’t have that client and one client is better than no clients.” Here’s the solution for that. Stop giving away your commissions immediately. Then you’ll need half as many clients and therefore use up half as much time serving clients to make the same money.
Then, you can invest the time you saved into getting good at getting more clients. And you’ll get ahead faster. You just need to believe in yourself and the value you bring. Check out this blog explaining the top methods for agents to get clients. Choose one and master it and you’ll be way better off.
The solution for this HORRIBLE mistake is the same as the fix for discounting your listing commission. Explain, in a compelling way, how you help buyers find the home they will love, negotiate a great price, and make sure they aren’t getting stuck with a lemon. If they don’t want to pay you, walk away and let another agent experience the joy of working with them.
the second mistake is
2. Not having a CRM
The second horrible mistake agents make is not having their past clients and sphere of influence in really good Customer Relationship Management(CRM) software. It blows my mind when people join our brokerage, that most of them don’t have any kind of organized list of their clients. Most of the time it’s just the contacts on their phone.
This is a problem because your past clients and sphere of influence is the single most valuable asset you have as a real estate agent. And as we discussed in our previous blog, it’s a terrible mistake not to stay in touch with them. Over 75% of clients find their agent by referral, and you are the one they’ll refer… if they can remember your name. You can’t call and remind them unless you have a way of remembering their names and contact information.
The solution is to have a decent CRM! Even a spreadsheet would be better than what most agents have, but really you want a CRM that supports the way YOU work. Most real estate CRMs, like KVCore and LionDesk, are mostly designed to manage cold leads (either purchased directly or through advertising) and distribute them to buyers agents. That’s not what you need, unless you are making terrible mistake #1, being dependent on others for your leads.
The main point of having a CRM is to cultivate referrals from your past clients and sphere of influence. And for that you need to have a database system that keeps relationship-oriented information like birthdays, closing anniversaries, hobbies, and notes from your conversations with them.
We could not find a database that did this well, so we developed our own software at Relevate which is designed 100% to support working by referral. However, if you aren’t an agent at Relevate, my best recommendation is ReferralMaker CRM from Buffini & Company. It’s $49 per month and totally worth it to have a solid CRM
the third mistake is
3. Being on the Client Service vs Marketing Roller Coaster
The final mistake agents make as they work to grow their businesses is actually the normal way most agents do business. This is called “being on the Client Service v Marketing Roller Coaster”. These agents are either completely focused on serving their current clients, or they don’t have any because they neglected to keep marketing while they were seving their clients.
Then they stress out, and worry about their bleak-looking future, and throw together a fairly random marketing effort. They do just enough to get a few more clients and then they again switch over to focusing 100% of their attention on them.
This is a big problem for several reasons:
First, it’s stressful to always be worried about where your next client will come from.
Second, these agents always have not enough, or just enough clients to get by. Because that’s all they can handle at one time. They get overwhelmed quickly because there’s a lot to do in a real estate transaction and they are doing it all themselves.
They never experience an abundance of business because they can’t handle abundance. Therefore, there is no getting ahead; there is only scrambling and surviving as the roller coaster goes up and down, up and down.
And so, these agents might get by, but their growth is capped.
But there is an even bigger issue with this situation. These agents don’t have enough clients to have choices. Since they always have barely enough or not enough clients, they can’t afford to say “NO” to any of them. They need them all.
And that tempts them, or in their minds sometimes forces them, to compromise and make many of the terrible and horrible mistakes we are warning you against. Things like giving up your commission and buying leads. And of course that makes everything worse.
Having enough clients to have choices is the key to happiness and success in real estate. But if you’re doing everything in your business by yourself, you don’t have the capacity to have enough clients to have choices. And that’s a tricky situation to be in.
The solution for this mistake is to have (say each of these slowly) knowledgeable, reliable, solid, affordable, licensed agents on your team that you can trust to help you serve your clients.
And the arrangement needs to be that you pay them when they are needed, and you don’t have to pay them when you don’t need them.
The way you’ll work with these wonderful team members is that you won’t hand the clients off to them, you’ll work together with them to help your clients, like a doctor and a nurse or physician’s assistant, each doing your role to take great care of your client. Clients love it because they get TWO agents for the price of ONE.
Does that sound good? Would that work for you?
And while your teammates are setting up searches in MLS, showing homes and attending inspections, YOU’LL have time to market to get more clients. And of course check in with your current clients regularly, knowing that your trusted teammates have your back now, and in the future, no matter how many clients you bring in at one time.
Can you picture that? Because there are plenty of agents who have this exact setup and they not only have an abundance of clients, and choices, but they also have balanced lives because they’ve got teammates they trust working side by side with them.
So, how do you get to this point? You either need to build a team, or join a brokerage that has it waiting for you. Keller Williams is the best brokerage for learning how to build your OWN team. Relevate is the best brokerage for having a team hired, trained and ready to support you.
However, I suggest that you start by learning about the different kinds of teams. I’ve made several videos to help you figure out what is best for you that can be found on my youtube channel.
The kind of team support I’ve described in this blog can 100% happen for you. You just need to follow the proven path for building your own team, or connecting with a pre-built team, that other agents have followed before you.
Conclusion
Okay. So those are three horrible mistakes I see agents making out there every day, and the solutions to those mistakes so you can escape them… or hey, hopefully never make them in the first place.
I was pretty blunt in my explanations because I don’t want you or your family to suffer from the consequences of making those horrible mistakes. I want you to have everything this great business can give you, without unnecessary pain and suffering.
If you are an agent in the Triangle Area of North Carolina and you’d like to visit with us to learn more about Relevate Real Estate, click HERE to set up a time to talk with us.
Be encouraged. By working HARD at working SMART, you can achieve all your career and life goals.