With the incredibly hot market in 2021 and into 2022, we have a flood of new agents coming to the industry.
It’s a fairly common trend; when the market is hot, people get their real estate license and try to capitalize on the opportunity. As brokers, when we take a new real estate agent into our office, we are responsible for setting that person up for success. How do we do that?
The plan is simple. First, we want to clarify that your first year in the industry isn’t a calendar year. It is an 18-month year! That is because it will take about three to six months to establish a flow of clients.
Sure, some may get lucky and do a deal on day one. Even so, they must still do the work required to establish a steady business.
Second, we establish three key sources of business:
- Open houses
- Expired listings.
Let’s look at each one individually.
Goal: Four clients
Is it reasonable to expect four clients, either buyer or seller, from your existing sphere of influence? If you focus your efforts for 90 days on getting introduced to one client from everyone you know, would you find one? Absolutely! This is a good, achievable goal.
Method: First, do 100 competitive market analyses (CMA) for everyone you know who owns a home. This is a necessary skill to master.
When presented to people as gifts, it is well-received. Also, when presented as a sample of the quality of work you wish to provide people who use your services, a new agent earns professional credibility with the people who already know and trust them personally.
Second, commit to providing monthly email newsletters to those who opt-in, and follow up with them once per quarter on the phone. Make no mistake, this takes WORK!
Result: Statistically, a new agent should find two buyers and two sellers from referrals. Of the two sellers, we can assume that one of them will also buy a home. Therefore, this activity is worth a minimum of five sales.
Goal: 190+ leads
These leads are found not just walking through the door but also promoting your open house to the neighbourhood.
Method: We aren’t talking about doing one or two open houses per month. We’re talking about doing 48 open houses in a given year. That still means you get four weeks of vacation time, don’t worry.
At each open house, you will promote the home to the neighbourhood door-to-door and promote the open house online as well as at other appropriate venues. We will also follow up with each person who comes through.
Result: We can anticipate an average of four people coming through each open house who are not currently working with a real estate agent. That means 192 potential clients are coming through the door. If we convert an average of two per cent of those people to clients, we will find four new clients (3.84 clients, to be exact). Assuming at least one of those clients is a listing and a purchase, we have five sales.
Goal: Two listings
Method: Two letters and a visit. When a home expires, write a letter explaining your reason for reaching out. Include some information about you and how you think you can help. Add a visit to the house to confirm receipt of the letter. Send a follow-up letter after your visit that includes the content of the first letter and talks about your commitment to “old-fashioned hard work.” Send five letters to newly expired listings every day. That’s 25 per week and 100 per month.
Result: We’re looking for two listings that will sell. Assuming that two listings we take won’t sell, we’ll find two closed sales from the expired listing process. If we’re lucky, one of those sales will turn into a bonus third sale when they buy with us too.
All said and done we’ve found five sales from our sphere of influence, five from open houses, and two sales from expired listings. That’s a total of 12 transitions, with one bonus.
When training a new agent, the key to this business plan isn’t that they’re committing to finding 20 deals from a single source. What a new agent is committing to do is find a reasonable number of transactions from multiple client streams.
Most importantly, if you present this plan well as a broker and a leader of people, you give your new team members hope for a great career and a bright future.
Cameron has worked within the real estate industry for over a decade. With early success in sales and winning a handful of local and corporate awards, he transitioned to the management side of the office. It was in this phase of his career that he found his strength. He has consistently worked on business development for brokerages since, consistently recruiting 50+ realtors per year, coaching and developing new realtors and designing custom brands and business strategies for senior realtors. Today, Cameron continues in this work, helping offices and realtors consistently grow their bottom line through implementing results-orientated processes.
I sure hope that anyone contacting Expired listings in Ontario are checking the MLS to see if contacting expired is allowed for that listing. Otherwise we’ve got a RECO violation on our hands.
I truly encourage new agents with doing open houses, I have been a successful realtor for almost 18 years, in my first year I made $70,000 in commission from open house leads.