This week’s Q&A column is written by Karisue Wyson, Director of Recruiting & Agent Support at McEnearney Associates Realtors®, the leading real estate firm in Alexandria. To learn more about this article, contact Karisue at 703-615-0876 or email [email protected]. You may also submit your questions to McEnearney Associates via email for response in future columns.
Question: How can I plan for a successful real estate career?
Answer: When you embark on an exciting and challenging career in real estate you are not just signing up to show houses, write offers or manage your time autonomously. You are launching yourself as the CEO of a start-up company, with all the time, effort and expense that entails.
No successful CEO runs his or her company without having a clear and trackable plan for how to achieve their goals. Here are a few of the basics in setting yourself up for success as a realtor that should be completed before you register for your Principles of Real Estate courses and prepare to take your licensing exam.
Create a Written Business Plan
To meet your goals, you need to DEFINE what you want your business to look like. This process will take some time and is a mix of practical, logistical and aspirational thinking. Have fun mapping out your dream company! But be sure to write your business plan in a way that is clear, measurable and adaptable as you progress in your first years as an entrepreneur. A simple plan will contain:
- Your vision and/or mission statement — WHY are you in real estate and what is the purpose of the business you are creating.
- A description of your company and your services — WHO you are: Are you creating a business entity? Are you working under your own name? WHAT work you will be providing: Are you focusing on residential or will you also be taking commercial clients? Will you offer staging services? Do you plan to host Open Houses? Will you work with rentals? Be specific if you are planning to specialize in an area of real estate like investment buyers, seniors, vacation homes, etc.
- The target area you will do business — WHERE you are selling real estate: Will you be in multiple jurisdictions or focus on a specific neighborhood (often called a “Farm” area)? What are the average prices in this area and how quickly do homes sell?
- An analysis of the current market where you want to focus and your competitive advantage — HOW you will stand out among the thousands of Realtors in the region, and WHAT is special about what you bring to the real estate experience.
- An organizational chart — WHO will make up your company. Will you be a sole proprietor, or will you have partners or team members? Early in the process, it may just be you, but if you have plans to grow your business you’ll want to have a plan for when that expansion begins (when you hit $8M in sales, $10M in sales, are working 60 hours a week?) Think about what your “tipping point” may be and make a plan.
- A marketing plan — HOW you will let people know you are open for business. The brokerage you sign with will have many options to assist your marketing efforts, and I will say that McEnearney has The BEST marketing vision, hands down! However, you will need to create a personal plan for what you want your personal brand to look like, a calendar of marketing projects, mailers or events and a budget for what you want to spend.
- Financial Projections — WHAT income do you want to make and how many real estate transactions will it take to get you there. If you want to make $100,000/year, calculate how many homes at what price range with a commission range of 2.5%-3% will it take to make that $100,000. Also, create an estimated expense sheet that will be deducted from your income and be sure to set aside estimated quarterly tax amounts as you are now self-employed and will be paying taxes directly to the government.
- There are many free online templates available, like this simple version from the Small Business Administration. If this one is not the right fit, a Google search should turn up the right one for you.
Define Your Sphere of Influence
Real estate is a business built on relationships and your most important currency is the people who know, like and would trust you to manage their real estate experience.
These will be the very first people you will share the news about your new real estate adventure and will be the best source of referrals as your business grows. Start creating a database TODAY of all the people you know and how you know them: friends, family, current or former work colleagues, connections through church or other civic organizations, parents in your children’s school groups, sporting or gym connections, your hairstylist, your mechanic, your doctor… the list goes on!
You can then segment these connections into different categories that will help you define where they are in the real estate cycle (first-time homebuyers, expanding families, downsizing, investors, etc.) which will allow you to target your real estate message to their specific needs and wants. Your sphere will change over time — new people will be added, past contacts will come off — but what won’t change is how crucial cultivating these relationships will be to the success of your business.
Set Aside Savings
Real estate is a commission-based business which means an agent receives payment for his or her services after the transaction concludes. It may take some time to develop a robust pipeline of customers and clients and it is not uncommon for some deals to take several months to reach settlement.
“The 90-Day Focus” is a good rule of thumb often cited by Realtors: whatever work you are putting into your business today you should see a pay off in 90 days. If you do not have a secondary source of income to cover your personal household expenses or the business costs you may incur, be sure you have at least six months of savings set aside to ease that financial pressure.
Real estate rewards agents who have a clear plan, put it in action and evaluate its success over time. If you have an entrepreneurial spirit, we want to meet you! Learn more about McEnearney Associates at www.JoinMcEnearney.com and give me a call at 703-615-0876 to get started on making your goals a reality.
If you would like a question answered in our weekly column or to set up an appointment with one of our Associates, please email: [email protected] or call 703-549-9292.
McEnearney Associates Realtors®, 109 S. Pitt Street, Alexandria, VA 22314. www.McEnearney.com Equal Housing Opportunity. #WeAreAlexandria