There are good reasons for real estate professionals just launching their careers to be optimistic. For starters, home sales in 2016 hit their highest level since 2008 — even as home prices in many areas hit record highs. What’s more, interest rates remain historically low. Although some young professionals are delaying buying a home because of financial and debt considerations, the Bureau of Labor Statistics predicts that many are want-to-be homeowners who eventually will enter the housing market. An improving job market and rising consumer spending will also drive demand for new housing, according to BLS.
But with every new opportunity there are challenges. Housing inventory in many areas remains low and there’s fierce competition among agents for every seller’s listing. You need a concrete plan for marketing yourself and making the most of your listings. Here are some strategies to get you started.
Expand your sphere of influence.
Without a sales track record, it may be difficult to attract business from strangers. Even with glossy fliers and a state-of-the-art website, you’re unlikely to make an impression on someone who hasn’t met you. So focus your marketing energy (and dollars) wooing potential customers who already know how fabulous you are — from places where you’re a customer to networking events. Be sure to emphasize how you can help others, not how they can help you. Need help making new contacts? Cultivate leads in your existing circles — in your own neighborhood, at your kids’ schools, your golf club or any other special interest groups in which you participate.
Be friendly and confident.
Body language has a bigger impact on your success than you may think. Carry yourself with confidence. Whether you overhear the lady in front of you at the dry cleaners talking about selling her home, or the topic comes up with another parent at your child’s soccer game, always be ready to make a good first impression. Here are a few basics to keep in mind:
- Stand up tall.
- Say your name and get theirs. Then use their name in conversation.
- Make eye contact and smile.
- Always offer to shake hands and deliver a firm handshake.
- Don’t be afraid to give them your business card.
Host an open house — for a colleague.
If you’re new to real estate, you probably thought that open houses were a tool to help sell properties. That’s true, but it’s only part of the story. Offer to host an open house for one of your colleagues. It will give them a much needed weekend off. But more importantly, it will provide you with an avenue for making contacts and cultivating leads. Many of the attendees may be nosy neighbors who aren’t buying or selling. But at least some may be contemplating moving. An open house is a great place to introduce yourself to future listers. And, of course, many attendees are unrepresented home shoppers. Make them your next customer.
Develop a marketing plan — and stick to it.
A realistic marketing plan — with achievable, measurable goals and timetables — will help you stay focused. Include short-term objectives such as making a certain number of cold calls daily or publishing a newsletter.
Determine your budget.
Many new real estate agents dive head first into marketing, throwing money at lead sources and branding materials, but because they’re trying to learn the ropes, leads sometime don’t get all the attention they deserve.
So start simple. You can do a lot of marketing for free. Networking events are a great way to meet new people, make connections and pass out business cards. Start with your city’s chamber of commerce to see when they have events, conferences and workshops. You also can take advantage of social media platforms and your personal website.
According to iHouse Web Solutions, real estate agents know that they need a website outside of their broker page, which has led to a 21 percent growth in personal websites. While you can begin with a free website, as you grow your business, you should invest more into it. Seventy percent of agents have had a website for at least five years and spend $100-$500 on it per month, according to Placester. This type of marketing typically includes blog posts, hosting, design and SEO services.
As a general guideline, many real estate agents spend 10 to 20 percent of their commission income on marketing. This money can go toward your website development and promotion, email blasts and postings, listings on third-party sites, and online and print advertisements. Laura Ure, a luxury real estate agent, breaks down some of the numbers in this example. For our purposes, however, we’ll use more realistic numbers:
- You sell 10 homes for $3,200,000 and earn $96,000 in commission
- You pay a 40 percent broker fee and now have $57,600
- You subtract your overhead (fees, dues, car, gas, etc.) and have $47,400 left
- If you want a steady 10 percent to go toward marketing, you should be investing $4,700
While your earnings—and therefore your marketing investment—may not be this high when you’re starting out, the example shows a picture of how you should be looking at your commission numbers. It also shows that you need to be keeping a close eye on your cash flow so you know how much you have to spend. Real estate agent Kristen Merlino explains that it’s easy to overspend on marketing and advertising, so a good rule of thumb for agents is to forecast a quarter or six months ahead of time. To do this, you need to know how your marketing helps you find new clients and how those numbers reflect in your books.
Do a reality check.
Part way through the year, evaluate your success meeting your goals. If you’re accomplishing everything you set out to do, consider making your goals more challenging. Could you be doing even more to get your name out and cultivate leads? If you’re not meeting the goals you set, commit to figuring out why. Were your goals unrealistic? Should you be doing something differently?
Need advice? Ask.
Don’t be timid about asking your colleagues for help in setting goals or figuring out why you aren’t meeting them. If there’s no obvious choice for a mentor, consider hiring a sales coach. By the way, it’s not just novices who are hiring coaches. The New York Times reports that agents at all levels are relying on coaches for help with all sorts of skills.
Hone your marketing tools to clearly define what makes you different from — and better than — your competitors. If you speak more than one language, for instance, use that as a marketing tool.
Find your niche.
You may find it helpful to focus some of your marketing on a particular neighborhood or direct some of your marketing materials to a specific demographic, such as young, first-time home buyers or seniors, etc. Of course, it may help if you are a member of the demographic you wish to approach as a buyer’s or seller’s agent. But don’t assume that potential customers will only want to deal with someone who is like them. You can find your niche without being exclusive or discriminatory.