When you begin your real estate sales business it is just that, a business. Make sure you watch your money. In my interviews with hundreds and hundreds of real estate agents I have found that financial literacy in regards to your real estate business is sorely lacking. Take these four steps to set yourself up with success;
Open an separate checking account.
Lead with revenue.
Play “Red Light, Green Light” with any money you spend.
Choosing the right real estate broker for you is probably one of the most important things you can do when beginning your real estate career. Yes, you can always change offices later. Yet, why go through the disruption and uncertainty twice? Take your time, ask the right questions and attend an “average” day are just three pieces of advice I’ll give for how to choose the right real estate broker.
TAKE YOUR TIME Sometimes, when something feels right, it feels right. I get it. Yet, if it feels right today it should also feel right tomorrow. There is absolutely nothing wrong with meeting with a Team Leader, a broker, a productivity coach (or whomever) more than once to be sure you agree with the “feel” and culture of the office. There are basically three different kinds of brokerage philosophies;
Traditional Brokerages – The feel will be more corporate like. Generally, they may keep a larger percentage of the commission you work for though they may be more involved in lead generation or carrying the costs of office supplies, signs, etc. Think Coldwell Banker, Reece Nichols, and Better Homes and Gardens.
Hybrid Brokerages – These brokerages will feel more entrepreneurial, will offer a higher compensation to the agent though most of the costs will be up to the agent. Costs like signs, office supplies, advertising, etc. Think along the lines of Keller Williams.
Low Cost Brokerages – These brokerages lead with low, low costs to the agents. They don’t do much (if anything at all) and yet they don’t take much. Think Platinum or Realty One.
ASK THE RIGHT QUESTIONS Listen, 99.9% of the agents who are getting started don’t know what they don’t know. And that is dangerous to your business and to the customers/clients you will work with. Here are some things to think about and to ask about;
What are the total costs to be an agent with this office? ie, splits (cost of sale), office supplies, signs, advertising, websites, databases, errors and omissions insurance, etc.
What benefits come with being associated with this real estate office? ie, tell me about your training calendar, class offerings, mentorship or productivity training program for new agents, leads generated and/or dispersed from office to agent, etc.
Who is my go-to person when I’m stuck?
How many agents are there in this office? How many do you want there to be? (There are advantages to both small and large offices.)
What can you tell me about the real estate technology you participate in, what are the costs and your general feeling about where technology is taking the real estate business?
May I talk to two of your most successful agents who have been in business less than two years? (Don’t skip this step. You will find out a lot from them on how responsive the office is to agent needs…and compare from office to office who is developing new agents the most effectively.)
ATTEND AN AVERAGE DAY Before affiliating your license with any office attend an “average” day, or two. How would they feel about you attending a couple training classes or team (sales) meeting or lead generation meet-up? Go! See how responsive and welcoming the other agents are to you. Are they there to help the “new gal” or do they see you as immediate competition?
While the previous two categories are more about fact
finding, this third category of attending a couple of events is much more about
the “feel” of the office.
All of this can be done in a week, or over the entire time
of your real estate school education or over whatever period of time you decide
to take. As a guy who has run real
estate offices for years I’m simply amazed at how uninformed and unprepared
most new agents are when choosing their first real estate office. And lastly…
DO NOT CHOOSE SIMPLY BASED ON COSTS!!! Please, I’m begging you. As a new real estate agent you are starting and establishing a new, independent business. Starting a business costs time and money. Be prepared to apprentice, to humble yourself and learn. I’ve always been taken aback at the unmitigated gall of some newer agents who feel that they can go with a low cost broker right out of the gate, eschew any real training or mentor-ship and feel that they DESERVE a professional level income like that of a doctor, lawyer, etc… you know, people who educated themselves and trained for years.
Sometimes, it all just makes me shake my head. Now, let’s be very clear; I am not advocating
that you spend money like a madman. Simply said, I want you to invest in
yourself and learn to run your real estate business responsibly to maximize
your service level to your clients and to maximize your income.
Keep all this in mind as you explore which real estate brokerage is right for you before you blindly choose (“Well, I had a friend here and…”) and you’ll have a much better chance of success your first year in real estate.
Care to listen to our podcasts on what it’s really like to be a real estate agent? Visit the Kansas Real Estate School Podcast page or find us on Apple Podcasts.
One of the toughest decisions you’ll get to make as a new real estate agent is who to affiliate your license with. In other words, take a great deal of care in choosing a real estate broker.
Here are some very important items to take in to consideration;
Are they company focused or agent focused?
What is their new agent training program and do they have proof of success?
The state says that the broker owns all listings. Fine. What is the broker’s policy if you choose to leave? Do you get to take the listings with you or does the broker keep the listings?
Same with your database. Does your database of current and future clients belong to you or the broker? Or, does the broker have rights to your database after you leave?
What is the culture of the brokerage? All for one? Or mind-your-own-business?
Do the agents have a say in how the office is run?
Who do you have access to that first year?
What is the market share of the brokerage? (Do you want to be part of a small office or a big office? – There are trade-offs for both.)
The list above is not all encompassing. But it is a great place to start. Seek your own answers. Research. Ask to speak to some of the broker’s agents. Ask to see the office’s trends. Are they growing, staying the same or slipping back?
Here in Kansas City we have a lot of great brokerages to choose from. Some are very limited service, some full service and everything in between. Some have been around decades and others are startups. Some small, very small. Some large, very large.
You really have a Good, Better, Best decision to make, in choosing your broker. The income difference between Good and Best, can be significant. So research, make a decision and then make the decision right.
Most people interested getting their real estate license in Kansas want to start with the question of, “How to become a real estate agent?” I’d like to proffer a different question, “Why do I want to become a real estate agent?” And that is the better question here in Kansas, or Missouri or Maryland or Hawaii or, well, you get the idea.
As someone who has been licensed since 2002, is the Team Leader of the Olathe, Kansas Keller Williams and an owner of a property management brokerage as well as a national MAPS Leadership Coach (the coaching wing of KW) I’d like to share with you the most popular reasons I hear for getting a real estate license. After all, I have interviewed literally thousands of would-be and current real estate agents.
CONTROL MY TIME
Well, yes. And no. When you get your real estate license you are opening a small business. If you are going to depend on that business to feed you (and your family?) as well as provide housing, transportation and some of the funner things in life, you better treat your business like a business. This means long hours and hard work for a few years. After you have build a reputation and client base and learned to leverage then, yes, you can control your time. This may take months for some, years for others and never for still others.
If you are working part time or the realtor income will be disposable (extra), then you can be more relaxed and work at hours you pick and choose. In the beginning, there is a direct correlation to how much effort you put in and how much money you will make.
MAKE MORE MONEY or CONTROL MY INCOME
Considering it takes less than $2,000 to get a real estate license and get started with all the MLS, business cards, etc, this is a FANTASTIC business, returns wise. I’ve seen people walk in the door and make over $125,000 their first year. I’ve also seen people walk in, sit at a desk and look all around the office for a paycheck three weeks later, because that was what they’ve been trained to do in the previous life in the job-world.
Folks, this is a business that a college drop out (or never-was) can earn professional level income. Though lets be clear, it is YOUR own business… and all that comes with that.
“I LIKE HOUSES”
Please. I’m not sure I want to write how I really feel when someone says to me, “Well, I love watching HGTV and I really like houses.” Well, I really like beer but I’m not going to start a brewery. I really like bicycling, but I’m not going to start a bike store.
Listen, if you have the money and the time to just bounce from house to house looking at decorating ideas and if you sell one or two houses a year, GREAT! For most realtor business-people houses quickly become a commodity. A unit. Now don’t get me wrong. Don’t misquote me. I’m not saying that houses aren’t a great commodity. I’m not saying that there is incredible honor and satisfaction in helping people choose, acquire and release a house/home. I’m just saying this is a lousy hobby for most people. So much cost, risk and detail.
There you have it. Those are the TOP 3 reasons I hear people say as to why they want to be a real estate agent.
As we talk to perspective real estate agents here at the Kansas Real Estate School we often get the question; “What does a real estate agent actually do?”
And you know what? The answer is really quite broad. What the public thinks a real estate agent does and what an agent actually does are two completely different things! After all, the successful real estate agent is part;
Expert in architectural design
Visionary: see what is “not there” regarding walls, paint, etc
I could have more fun and go on and on and on. As someone who has been in this business since 2002 I have never ceased to be amazed at the different roles I have played. That includes one night, early in my career, being a brick mason so that a house that was supposed to close the next day could get re-inspected by the FHA appraiser and my sellers could sell their house so they could buy the other one they were supposed to close on immediately after this one closed. Did you follow that? Whew! Oh, and did I mention it was dark and snowing?
When you get your real estate license you become a business owner. With that comes all the responsibilities until you make enough money that you can hire a person to help, then two and so on. Just like a brick and mortar business, without all the capital required.
So when you ask yourself “What does a real estate agent actually do?” you are really asking yourself “Am I ready to be in business for myself because I’ll be responsible for everything?” If the answer is “Yes!”, real estate is a fantabulous way to make a living.
In my role as a Team Leader with Keller Williams Realty, Diamond Partners, Inc in Olathe, KS I ask people all the time “What are you going to do when adversity comes?” It is important to know that real estate creates real wealth for life’s tragic moments. Let me give you a couple of examples.
February 16, 2018 I learned of my 20 year old daughter’s passing. It was unexpected. This was not a fun time in my life and, in fact, I am still healing from the occurrence. Part of that healing is sharing this post with those of you considering a career in real estate and trying to figure out how to get your real estate license. Anyway, the thing I need to say is this; “The one thing I didn’t have to worry about during the entire ordeal was money.”
How much more stress would there have been if I didn’t have my financial ducks in a row? Real estate has allowed me to have a great income. Some would say I make too much. And I would say “I work very hard…and very smart.”
Do you know how much it costs to buy a plot, hire a funeral home, get a headstone marker, etc? It’s in excess of $15,000. Because real estate has allowed me to earn beyond what I could otherwise earn as a college drop-out and because I live conservatively, money wasn’t an issue.
Thank you, God, for my work ethic and that I learned my money lessons earlier in life and didn’t have to burden my wife with the additional stress of “How are we going to pay for this?”
December 2013 – March 2014
My mother was in her final leg of her journey with breast cancer. As the end was drawing near my sisters and I worked out an around-the-clock schedule to take care of her. I took many of the day shifts because of my sisters’ schedules. And I was okay with that.
In the previous years I had developed enough of a real estate team that not only did my customers get served at a high-level with me only being available by phone much of the time, but my income actually continued uninterrupted. In fact, it continued to grow.
Imagine that. Real estate sales gave me the gift of being with my mother in those final weeks when she needed me most. I even had to laugh when, at one point as I was helping her back to the couch, she suggested that I should go back and finish my college degree. I told her that as much as I love the University of Kansas I just couldn’t see myself taking a pay cut. Real estate had treated me just fine.
By living somewhat conservatively and paying close attention to your plan many may have been able to take weeks and weeks off and still been okay. However, most would not be able to do so.
What is more important than your family? What can help you to help them when need and life’s tragedies arise?
Money is only good for the good that money can do.
There are lots of reasons to consider a real estate career. One of the best is relieving yourself from all the financial stresses so many people are under. Yes, absolutely, it takes work. You may have to change who you are. You will have to educate yourself and become learning based. You may have to work when you don’t want to and work with people you’d rather not work with until you have earned the right to not do so.
How is any of that any different than your day job?
Getting a real estate license is a big deal. And becoming a real estate agent changed my life. Will it change yours? I don’t know and I will ask you to pause, just for a moment, to consider.
When you go to real estate school they’ll teach you all about riparian rights and appurtenances and what a metes-and-bounds description is. What they don’t tell you is that if you are like most agents you’ll work mostly in suburban or urban settings and never have to worry about navigable waterways or that the land goes north from the stone pillar.
What really needs to be taught is that you are opening your own business. Your success will depend wholly on you. Not your broker and not your team lead if you are joining a real estate team. You. The man (or woman) in the mirror. You’ll have to learn people skills and negotiations and budgets and working with contractors. The gap between what a real estate agent does and what the general public thinks we do is vast.
I can tell you that after you graduate real estate school and go to work as a real estate agent you will be in total control of your financial future. And for many of us, that is a great thing.
In February of 2014 I got to take my wife to Mexico for the first time. We had finally gotten to the point where we had worked our way out of all the silly financial decisions we had made as a younger couple and were well on our way to our current debt-free (except for the mortgages on the two homes we own) life.
On the last night of our stay we sat on the dock of our resort in Cozumel and watched the sun go down. And mostly, well, we just giggled. “How did we get here?” we would ask and smile.
The answer: Real estate changed our lives. Yes it takes hard work and faith and failure. And yes, I had owned a couple businesses previously that also took hard work and faith and failure. And yes, real estate was different, at least for me.
Why Real Estate Is Different
What other business can you make whatever you choose (Yes, up to seven figures…possibly more) with an investment of about $2,000 to get started? What other business can your competition (the agent in the next cube) give you a few pointers about this or that? What other business has billions of dollars of inventory at your finger tips and you don’t have to be liable for it?
If you are pondering signing up for real estate school take a moment to think through your motivations, work ethic and fear of failure. For most, all of these are learned skills.
Yes. Real estate did change my life. I hope getting your real estate license will allow you to change yours.
Author Chris Lengquist
Chris obtained his real estate license in the Spring of 2002. He has worked for Scott Douglas Realty in Tulsa, OK and Keller Williams Realty, Diamond Partners, Inc in Olathe, Kansas. Today his is the owner/broker of Ad Astra Realty, Inc, a property management business for Kansas and Missouri as well an associate broker and Team Leader of Keller Williams Realty, Diamond Partners, Inc.
Kansas Real Estate School is offering a night course for the Kansas Principles of Real Estate. You can find out about the details for this real estate class on our website at http://www.kansasrealestateschool.com
There are also other real estate classes being offered. Just follow the Upcoming Classes link to see all of our current offerings.
Real estate is an exciting and intriguing business. Make no mistake, it is a business. You will work hard and be stretched to your outer limits. You will experience great highs, setbacks, challenges and victories. Never-the-less, it is the greatest business, in the opinion of this offer, that you can start for roughly $2,000…as of January 2018.
Located in Olathe, Kansas we are here to make sure you can follow your real estate sales dreams. Getting your real estate license is not only Kansas’ way of giving you permission to practice real estate, it is your key to a business of your own. And we’re here to get you started right.
We have an excellent educator in the person of Randal Peterson. Randal has been trained in and worked in the field of adult education most of his adult life. We are excited to share his expertise s both an educator and a licensed real estate agent.