Getting started in a new industry can be challenging, especially as a new real estate agent. Many believe that it takes years to establish a steady income, but that doesn't have to be the case. In this article, I will share my personal journey and provide practical ideas on how you can make money in your first year as a real estate agent.
The Reality of First-Year Earnings in Real Estate
According to a 2018 survey by McKissock, the average first-year real estate agent earns approximately $15,000. This amount increases to $38,141 in the first three years. However, what if I told you that you have the potential to earn ten times these averages? I am living proof that it is possible.
My journey in real estate began in October 2013, right before the birth of my first child. Coming from a career in new home sales, I was eager to make a name for myself in general real estate. Despite the challenges and the transition from a desk job to a hustle-driven career, I was determined to succeed.
Caption: Stay motivated and focused on your goal.
A Closer Look at My First Year
During my first year, I dedicated myself to mastering marketing strategies while also hitting the streets to talk to people and build my network. My work-life balance leaned heavily towards work, with about 75% of my time focused on building the foundation of my business. But the hustle paid off.
By the end of my first year, I had completed 28 personal transactions, totaling $175,000 in gross commission income. I helped twenty-one buyers and represented seven listings, establishing a solid foundation for future growth.
Finding Business Opportunities
While many people expect to find business through their sphere of influence (family and friends), my experience showed me that there are other avenues to explore.
Caption: Building relationships with your network is crucial.
The majority of my business during the first year came from referrals. I received referrals from friends, family, new home builders, other realtors, and even lenders. Surprisingly, I didn't receive as many referrals as I had anticipated from clients I had helped in new home sales. This goes to show that everything you do in your first year is replicable, regardless of your previous industry experience.
The Power of Staying "Top of Mind"
One of the most valuable lessons I learned in my first year was the importance of staying "top of mind" within my network. Building and maintaining relationships with friends, family, coworkers, and neighbors played a significant role in generating business. When someone within your network or someone they know is ready to buy or sell, they will remember you.
Caption: Connect with your network and be relevant in their lives.
This approach creates a domino effect that significantly impacts your business. By staying close and relevant to those already on your side, you can secure repeat business and referrals.
Expanding Your Referral Base
While maintaining strong relationships within your network is essential, expanding your referral base is equally important. Here are some strategies that worked for me:
Make Friends with New Home Builders
Building relationships with new home builders can lead to opportunities. Visit new home communities, bring coffee or lunch, and show them that you are eager to work together. These builders may refer clients to you who need to sell their existing homes. Additionally, offering to host open houses or assist with model homes can establish your presence and credibility.
Caption: Explore opportunities by making connections with new home builders.
Realtor Referrals
Building relationships with other real estate agents in your area is essential. Realtor referrals occur when an agent cannot help a buyer or seller due to various reasons such as being out of town or focusing on other aspects of their business. Networking with agents from different MLSs or regions can create opportunities for reciprocal referrals and expand your client base.
Lender Referrals
Working closely with lenders is crucial in the real estate process. By establishing a strong relationship with lenders, you can exchange referrals and support each other's businesses. Lenders often refer clients to trusted agents, and this can be a valuable source of business.
The Power of Marketing
Effective marketing is a game-changer for any real estate agent. My primary marketing strategy involved using Google Ads to target potential buyers in specific zip codes. While this strategy required persistence and effort, the return on investment was significant. Although only around 2% of leads turned into qualified buyers, the overall cost was well worth the commission earned.
Caption: Leverage Google Ads to reach potential buyers and sellers.
If you are unsure how to get started with Google Ads, there are numerous podcasts and YouTube videos that offer valuable insights from successful agents.
Exploring Rental Leads
Working with rental leads may not be the most lucrative aspect of real estate, but it offers its own advantages. By representing renters, you gain experience with transaction processes, forms, and different clientele. Additionally, renters often become future buyers, providing you with repeat business opportunities.
Maximizing Tax Benefits
As a real estate agent, it is essential to maximize tax deductions. Training, continuing education, client thank-you gifts, and office supplies are all tax-deductible expenses. Be sure to consult with a certified public accountant (CPA) for personalized advice regarding your specific situation.
Caption: Familiarize yourself with tax deductions and consult a CPA for guidance.
Final Words of Advice
To succeed as a real estate agent, take advantage of networking opportunities, continue learning, and seek guidance from experienced professionals. The hustle pays off, and with time, you can achieve the flexibility to focus on what you love most. Remember, building relationships, providing excellent service, and staying top of mind are key to long-term success in the industry.
Additional Resources
If you are interested in exploring more about the real estate agent salary and industry, here are some additional resources:
- Check out my current real estate agent salary in my income reports.
- Create a business plan for your real estate career.
- Share your first-year experiences and lessons in the comments below!
Remember, your first year is just the beginning. With dedication, perseverance, and the right strategies, you can achieve remarkable success in the real estate industry.
