Starting a new career as a real estate professional requires a lot of planning and investment of both time and finances. Based on interviews with Realtors, some new to the field and some with years of experience who are at the top of their game, we were able to develop some guidelines for people who are thinking of becoming Realtors or are new to the business. Here are a few best practices recommendations that stood out as a common thread.
Save money and do your research:
Starting a job that is 100-per-cent commission-based can be really intimidating. It takes time to establish a relationship with someone to the point where they trust you with their house listing, and even in a hot market, it can take a month or more to sell. Before you enter a real estate career, make sure you have at least six to 12 months of savings to cover your expenses. Clint Harder of Royal LePage Signature Realty in Toronto advises new agents to compare brokerage houses to see what type of services you will get in exchange for the commission split and monthly fees, as they can vary widely from company to company.
Pay yourself first:
There can be extended periods of time between sales, even for experienced, successful agents. It’s important to save for the lean times. Always set aside a decent portion of your commission payment for savings.
Sales rep Kerry Mantziounis of Re/Max Ultimate in Toronto says you need to cover your living expenses first, set aside your savings and then address your discretionary spending. That is why he allocates a portion of his brokerage fees and pays his brokerage an administration fee to withhold taxes on his commission payment, because the temptation to indulge when a big commission comes in can be strong.
Self-discipline, time management and ethics:
These characteristics go hand-in-hand and they are important in a career with no structured hours, where you are subject to the needs of your clients. Jacqueline Macieira of Re/Max Ultimate in Toronto believes in creating a detailed weekly calendar and sticking to it, which has helped her be productive and use her time wisely. Allow time for networking, paperwork, prospecting, follow up, open houses and your own showings. It can be easy to get lost in the demands of your clients, so schedule personal time as well so you can recharge.
Develop a code of ethics for yourself and always put your client’s needs first, even if it might mean not having a big commission in your bank account.
If your integrity is on the line, always turn down situations that jeopardize it because in the long run your reputation is invaluable, says salesperson Moni Molla, also from Re/Max Ultimate in Toronto.
Spend money to make money:
Hire experts to advise you so that you can focus on your strengths: building relationships with your customers and network. Dylan Jarvis of Re/Max Chay in Barrie, Ont. advises that partnering with a financial planner can help you create a comprehensive financial plan that incorporates your real estate investments, which are considered a hedge against inflation, and your financial asset investments, which can provide a monthly dividend to help with your cash flow. This helps a salesperson become truly diversified.
Hiring an accountant can help you manage and plan your taxes in advance to avoid any unpleasant tax penalties. An administrative assistant can take the paperwork off your plate.
Network, network, network:
Since most people buy their home and stay there for five to 10 years, you need a steady stream of contacts and prospects to keep your funnel full. You need to network with professionals in real estate and related and diverse fields. Jeff Belisowski, a sales rep with Royal LePage RCR Realty in Bolton, Ont. suggestions creating meaningful seminars to solidify your reputation as an industry expert. Provide tips to first-time home buyers and downsizing baby boomers and collaborate with other professionals in order to provide value.
Lorraine Hughes from Sutton Group – Innovative Realty in Hamilton, Ont. says people first do business with people they know, like and trust. Building relationships is the key to success and you never know where a referral will come from. Having a personal referral network helps cement your relationships with clients for the long term.
The role of your financial planner is critical when you are at the stage of creating your comprehensive financial plan – when you have accumulated your investment assets and you want diversification, retirement planning, tax minimization strategies and estate planning. Referring back to the Top 5 Best Practices listed above, you see that the theme of top-notch financial advice is critical to success. It provides peace of mind and allows you to concentrate on your relationships with your clients.
Zainab Williams is a financial planner with Forshaw Wealth Management. She offers a fee-based, comprehensive approach to financial planning. For a consultation, contact her by email.
