What a Millionaire Real Estate Agent Would do if They Had to Start Over
I was having lunch with a very successful real estate agent a month or two ago, and we got to talking about what we would do if we had to completely start over. For instance, if one of us just packed up everything and moved somewhere new where we didn’t know anybody, how would we start selling real estate? Then we took the conversation even further talking about what we would do if we had no money to advertise. And guess what? Both of us had 100% confidence that we would be profitably selling real estate within just a few months. Why all this confidence?
It starts with your mindset.
If you want to succeed you first need to have 100% confidence that you will. This is a trait that you will find in every very successful real estate agent. So if you don’t have that confidence yet, you need to find it. First, you already know it is possible to succeed in this career because other people have already done it. Next, you just need to find out how they did it. Third, now you just need to do it. It’s that simple. You can do that, right? Copy what someone else is doing. Now that you know it’s that simple you should have no problem feeling 100% confident you can do it. See, that was easy!
How to start selling real estate from scratch with no money.
Of course paid advertising and marketing can be one of the fastest ways to grow a business, but in this scenario we were discussing how it would be possible to start a real estate career from scratch, with no money to spend on advertising. So I will save paid marketing for a different post. Ok, now let’s get started. And remember, these are just ideas from two different people having lunch together. There are a lot of different ways to get started. If these don’t appeal to you just ask the successful agents in your office what they would do if they had to start over today with no money.
So we began discussing what it takes to get a buyer or a listing. The simple truth is that we need to find people that either want to buy or sell a house. How do we do this with no money? The answer is by talking to people. A lot of people. One of the first steps we would take is to ask agents in our office if we can host an open house for them. We would make sure it is a house that is easy to find and near enough to a busy street so that many people will see our signs. (Click here for a free Ebook about holding very successful open houses) Before the open house starts we would go and knock on doors in the neighborhood to invite them to attend. We both agreed that around 50 doors would be the most we could handle. Since most open houses are held on weekends, we guessed we might find a little less than half of the people at home. So let’s figure we will get to talk to 20 people. The other houses we will just leave the flyer on their door. So if we hold an open house every weekend that means we have talked to about 80 people in month. The important part is, we would go further than to ask them to come to our open house. We would boldly ask them if they knew anyone that may be interested in buying or selling a house within the next year. If they said yes, we would ask if we can contact that person, right this moment.
This was just a fun exercise showing how feasible it is to start a brand new real estate career with nothing much more than some passion to make things happen.
This is where you need a certain mindset. For most people, this is not a comfortable thing to do. Knocking on stranger’s doors and asking them for business is not easy. But if 1% of these people end up wanting to list (or sell) a house or refer you to someone that does, that is almost one new closing every month. Let’s do the math a little more. 50 houses in a neighborhood where the houses are close together should take 2 to 3 hours for you to go to. At 3 hours, that means you will spend about 12 hours a month knocking on people’s doors. If that equals a $150,000 listing, that means you are earning a roughly $4,500 commission (3%) for 12 hours of marketing, plus the time you invest in handling the listing. And that was only the first idea we came up with. Since that takes only 3 hours a week, we have plenty of time to get even more clients.
Next, it makes sense to talk about the open house. We chose a house in a pretty busy area so we can get a lot of people to see our signs and stop in. As soon as they walk in the door we say “Thank you for stopping by, please sign in”. And we point to our sign in sheet that asks for name, phone number, and email address. Again, most agents feel uncomfortable asking people to sign in without giving them an option. This is just my opinion, but I think it is completely stupid if you don’t. I NEVER had a single person say no to me. So just do it. And then call them the next day. And email them. And ask them if they know anyone that may want to buy or sell within the next year. See where I’m going with this? It’s all so easy, but you just have to do it.
Let me get off on a little rant really quick. I was coaching a new agent on holding open houses and told them about using the signup form. After the first open house they said only about a quarter of the people that came through signed up. I was really surprised. I asked the agent if they were telling them to sign up before any other conversation was had. They said no, it made them feel uncomfortable to ask them to sign in without showing them through the house first. What? After the next three open houses, they still didn’t listen to me. They said they didn’t want to make people feel “weird”. Guess what? That person is not an agent anymore because they didn’t make any money. They would not listen to ideas that successful agents use because it was outside of their comfort zone. Ok, my rant is done, with the real point being that if you are going to take advice from someone that has reached goals that you want to reach, just do what they say.
Now let’s go back to some more of the things we would do to start selling real estate if we had to start over. We discussed using the Internet, and that definitely was an important part of our start up plan. There are a lot of place to post free ads. And there are a lot of place to make free websites. It doesn’t have to be anything fancy; you just need a message that appeals to people. So our plan would be to plaster all of the free sites with messages for buyers and sellers. It would give our contact information, and a link to website where they could fill out a form, send us their information, and get something free in return. Usually a report on the local market, or local foreclosure listings, etc… We would look around at our local market to determine what would be interesting to local buyers and sellers, and make our site a resource for them to get that. Once they put in their contact information, at that point we would immediately call them and make sure they got the report, or whatever it was they signed up for, and of course ask them if they are looking to buy or sell. And as long as we have them on the phone we might as well ask them if they know of anyone else that is looking to buy or sell in the next year or so, right?
At this point in the discussion we were getting pretty close to finishing our lunch, but after thinking back to the ideas I just mentioned, we realized we still probably weren’t even putting in 40 hours a week yet. So what else could we pack in there? Then it came to us. Networking events. Since, in this scenario, we are in a new place and don’t know anyone, networking events are the perfect place to not only meet potential clients, but to also make new friends. I’m a fan of Meetup.com for finding local groupds to meet with. And this can also be something fun for you. There are groups that meet about all sorts of different interests. Don’t feel like you can only go to business groups. Go to events that are about other things you enjoy also. Just make sure that every person in those groups knows what you do. And ask every single one of them if they know anyone that may want to buy or sell in the next year or so. After you get used to asking this, you will find ways to do so smoothly so that people don’t feel uncomfortable.
So now we had an action plan to get our name out there. Let’s do some math again and see how successful we will be if we put 40 hours a week into this plan. Let’s break down the hours you would spend each week:
- 3 hours: Knocking on doors to tell them about your open house and asking for referrals.
- 3 hours: Hosting open house.
- 1 hour: Calling and emailing everyone that attended your open house.
- 10 hours: Posting free online ads (expect the first week or two to take longer while you set up the sites).
- 1 hour: Following up on responses from online ads.
- 5 hours: Attending networking events.
- 10 hours: Working on creating marketing, setting up business etc… Running the business, admin work.
So this list comes out to 33 hours. Keep in mind this is just us guessing while we were having lunch, but these tasks seem pretty doable in the timeframes we have put down. Just to be safe, let’s ad 7 more hours just for drive time, listing appointments, etc… So this could be a 40 hour per week plan.
Now, let’s try to figure out how much money we could make if we did this every single week. We already assumed that knocking on people’s doors will get us just under one sale a month. Let’s call it 10 a year. Next is hosting the open house. If we diligently follow up on all of the leads, let’s call this one sale every two months, or 6 a year. The next is our online marketing. This is my strong-point, and I closed a lot of sales from Internet leads, but the agent I was having lunch with didn’t get much of his business from the Internet. So I am going to go on the low end and call that 6 sales a year. And the last part of our plan was attending networking events. Let’s say we attend two a week, and at each event we talk to 30 people. That’s 60 a week, or roughly 240 a month. If even .5% of those turn into a transaction, or refer us to someone, that is about one a month. So let’s add 12 more homes to our yearly sales.
Now it’s time for the grand total. That is 34 houses a year. And that doesn’t include the referrals you should be getting after you have happy clients that tell their friends about you. And the referrals you will start getting from all the new friends you have made at all of the networking events.
Ok, the last fun part. How much money could that be? Let’s assume that you earn 3% on each transaction you close. If your average sale price is $100,000, that is $3,000 per closing times 34 which equals $102,000 earned in a single year without spending a dime on advertising. If your average transaction was $200,000 per closing you would have earned $204,000 in commissions. That sounds pretty good doesn’t it?
So could this work for you?
Maybe my numbers are a little off. Maybe some people will do a lot better. Or maybe some people won’t be able to knock on 50 doors in three hours. Every situation is different, and you will need to figure out the details for yourself. This was just a fun exercise showing how feasible it is to start a brand new real estate career with nothing much more than some passion to make things happen.
I know that everyone is different, and some things may be so far outside your comfort zone that they will never work for you. That’s OK. The point of this whole post is to show you that there are tons of ways to earn over $100,000 a year without having to spend any money on marketing. These are just a few ideas that myself and an experienced agent came up with over lunch one day. What you really need the most is the determination to do it. The truth is, if you get in front of enough people and ask them for their business or a referral, you will start getting what you are asking for. If 1% say yes, then you know how many people you will need to talk to reach your goals. And as you get better it may jump to 2% or 5%. Who knows? You just have to keep going.
Take a minute to figure out how many people you think you should talk to next week. Write out a plan of how to do it. Maybe some of our ideas will be in your plan, maybe they won’t. Just make sure you hit that number, and also make sure you really do ask them for business and referrals. Don’t waste your time if you aren’t going to really go for it.
If you follow some of these ideas and put 100% effort into it, you will be successful real estate agent. And that I know, because I have seen it over and over. It really works.