As a Realtor® you are essentially operating your own business. There's a huge learning curve, and it can often feel overwhelming.
Understand that when starting your own business, it’s pretty typical that people will apply for business start-up loans because the cost of doing and creating business is not cheap. In fact, most new companies often operate at a loss for the first two to five years. Real estate can be a prosperous occupation if you start with the right perspective and respect the process. Here are some things to keep in mind:
1. Licensing fees
Once you successfully pass your classes, then you have to pay for and pass a state licensing exam, plus licensing and fingerprinting fees. You will also have to choose which broker you want to hang your license with.
2. Cost of doing business
Monetary obligations will seem never-ending. You will have your Realtor® association dues, multiple listing service subscriptions, E&O insurance, digital lockbox key, business cards, headshots, sale signs, and other ancillary business expenses.
3. Choose your broker
Before choosing your new broker of record (aka where you hang your license), you should interview at least three different brokers.
When visiting and getting to know the different companies, do not overlook the smaller local real estate brokerages. Between the culture and availability of assistance, you want to be sure you find the right fit. Additionally, don’t rule out some nontraditional firms that may offer competitive commission splits or even virtual participation.
Each one of these companies operates and educates their agents differently, and you want to make sure you team up with the one that will best fit your needs. Ask questions about training, support, admin help and mentorship. See how you feel while touring the office and if you connect with the company culture.
It’s so important to make sure you are comfortable with the level of service they provide, the education they offer and the fees they will charge. There can be monthly fees and transaction fees and technology fees. Be thorough and aware so you don’t get shocked with a huge bill in your first month when you haven’t even brought a deal to close.
4. Advertising expenses
Learn the ropes and take advantage of the free and low-cost options you have at your disposal. Can you request some giveaways from your broker? Absolutely! They will be branded to the company, but they won’t cost you extra as you get started.
Learn about social media marketing and how you can organically grow your online footprint and increase lead generation with little to no expense. And of course, you always want to start with your sphere of influence — all the people you already know. Word of mouth within your network builds momentum and helps people understand that you are available to help people buy and sell a home.
Check out this article to elevating your marketing game: https://www.mnrealtor.com/blogs/mnr-news1/2021/03/26/the-minnesota-realtor-elevate-your-marketing-game
5. Professional development
Once you are established, get ready to take additional education classes (23 credits a year for the state of MN). It’s best to get these done ahead of time — preferably during the slow season — so you aren’t trying to cram it in in the middle of an important deal. You can also consider taking some specialized training to increase your industry knowledge and earn a designation or certification. These can be used to market yourself and let clients know your dedication to your work and extended professionalism.
Take advantage of opportunities to volunteer with your local and state association by attending additional meetings and events. Do not underestimate the value of getting to know your peers and increasing your industry knowledge. Check out the list of committees you can participate in here: https://www.mnrealtor.com/about-us/governance/about-committees.
6. Your time
Launching a new business and learning how to manage it will take time, have a huge learning curve and become overwhelming. If you enter real estate understanding the value of your time and efforts, you will have a higher likelihood of success.
In the beginning, it will seem like you’re working round the clock. If you set up systems, maintain work schedules and set boundaries for yourself, you will be happier and ready to greet your clients energized and prepared. You will be able to better focus on them if you make sure you also have provided the same level of attention to your mental wellness, your loved ones and your health. It is not going to be easy, but if it were easy, everyone would do it!
When you understand you are starting a business, you’ll see the startup costs that seemed so expensive are significantly less compared to other industries where higher education and even post-graduate degrees are the norm. As long as you are ready to invest the time, effort and grit needed to learn the ropes and move forward, the real estate business can become one of the biggest returns on investment you will ever make.