How to Build a Top Real Estate Business
No one gets into real estate hoping to become a low earner. Certainly, brokers don't launch their own real estate brokerage business in hopes of breaking even.
Everyone wants a top real estate business. Everyone wants to know how to be successful in real estate. Everyone wants to learn how to build a real estate business they can be proud of.
There's a certain degree of luck and a certain amount of innate skill involved. But there's a formula for optimizing what you can achieve. So you learn not just how to be a good real estate agent, but a great one.
And when the time comes to build your own brokerage, the secrets to success are pretty much the same.
Here are 8 tips for success in the real estate industry that will serve you at every stage of your career.
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Tip #1: Target an Unmet Need
Choosing the right niche and finding a way to make it profitable is a big key to becoming a top real estate earner. You can reduce the competition you face, get the most return on advertising, and gain true expertise within your domain.
We've talked about how this applies to an individual agent before. There are many ways to niche down, whether you focus on a particular kind of property, a particular kind of client, or some combination of the two. It's okay if you take a couple years to "date around," learn the business, and find the niche that suits you.
When building a successful real estate brokerage, finding an unmet need is just as important. Unlike the journey as an individual, you need to understand your business's unique value proposition before you launch – it will affect who you hire, where you place your offices, how you invest in initial marketing, and much more.
Tip #2: Find Mentorship
You can save yourself from costly mistakes when you can ask questions and get advice from someone with greater experience.
For new agents, this means choosing the right broker to hang your license on. The degree of mentorship and training a brokerage offers can make a huge difference in how quickly you get your practice off the ground.
Multiple perspectives are important. Try to build an entire network of more experienced real estate professionals you can go to, both inside and outside your brokerage.
The same is true of new business owners. Seek mentorship from experienced managing and owning brokers.
There's an element of competition here that you have to navigate. You want an open and honest mentor, which means not seeking advice from anyone in direct competition with your new business.
For example, you might seek advice on local regulatory questions from a nearby brokerage with a different niche from your own. For niche-related advice, you might seek a mentor in another part of the country.
Tip #3: Be Honest with Your Budget
Look – no one likes to look at a balance sheet in the red. Sometimes it's tempting not to look at all, or to use numbers that stem from magical thinking more than cold hard reality.
The problem is that whether you're an agent or a business owner, budget denial is not how to succeed in the real estate industry.
As independent contractors, individual agents or brokers need to predict and track their own business expenses. They also need to factor in their personal expenses and estimate seasonalized income as realistically as possible. A budget needs to be a living document – as you learn more about your own costs and sales cycles, you should adjust your calculations.
Business planning for an entire brokerage is a whole new level of complexity. The good news is, you can apply the general budgeting principles you've learned from your individual practice. But there are a lot more balls to juggle, and you need mechanisms for keeping a whole group of people on budget, not just yourself.
Tip #4: Plan for Recruitment
Individual agents need a plan for generating new leads – and to become a top real estate agent, you need to plan to recruit referrals, not just fresh prospects. Referrals are a real estate agent's true income engine.
For a brokerage, the true income engine is every member of the firm, so that's where your recruitment planning must lie. You don't just want to recruit top-earning agents. They might bring in commissions, but they won't help you build a sustainable business.
For that, you need competent support staff, experienced brokers willing and able to mentor new agents, and the kind of training program that attracts motivated newbies to your business and sets them up for success. Naturally, lead generation and referral business still impact your bottom line – part of that training should focus on how your agents can maximize success in those areas.
Tip #5: Plan for Retention
At the agent level, planning for retention involves building long-term relationships with your clients. If you plan to have a long career, satisfied clients can become a referral source as well as repeat business.
This doesn't just happen, any more than accidental lead generation will. You have to plan ways to keep in touch and continue adding value for the client.
Similarly, brokerages need a plan for staff retention. Turnover is expensive, and agents bring greater value the more experience that they gain. Good management and mentorship are the biggest value-adds you can offer, and they're an every-day effort. However, you should also schedule regular events to encourage bonding and loyalty.
Tip #6: Be SMART
In all of these aspects of planning, from finding an unmet need to making plans for retention, you need to be SMART. In other words, you need a series of steps – smaller goals – that are Specific, Measurable, Achievable, Realistic, and tied to a particular Time frame.
Plan for check-ins on your SMART goals. Divide up your time frame into smaller periods where you'll stop and gauge your progress. Consider out-of-the-box ways to pick up the pace if you're falling short, but don't be afraid to change your goals as you learn what's achievable and realistic.
SMART goal check-ins are a great use of mentoring time. Someone with more experience may see problems or opportunities you're missing.
Tip #7: Focus on Others
Real estate is a social business built on relationships, not land or buildings. That means you get what you give. If you're entirely selfish in your interactions, you won't get as much out of those relationships as you might hope.
Focusing on mutual benefit in your business relationships and asking what value you offer others is an excellent strategy for long-term success – not to mention happiness.
As an agent, this largely applies to clients and leads. However, other agents and industry-adjacent professionals can aid your success enormously if you make the benefit to both of you mutual.
As an owning broker, the principle should apply to everyone underneath you. Considering the success and well-being of your employees is great for both recruitment and retention. Applied correctly, it can also be great to your bottom line.
Tip #8: Continue Your Education
No matter where you are in your career, there's always more to learn. This is especially true in real estate, where the industry is changing so fast.
You want to know how to be a top real estate agent? Continual improvement.
Polish your communication skills for better relationships. Learn how to apply time management and organizational skills. Study marketing techniques. Leverage your required CE to gain important knowledge.
There are many ways to improve your success in the real estate business through education. In these pandemic times, online courses are a great way to make the most of your time. You'll fulfill your requirements, feed your mind, and broaden your skillset so that when the world reopens, you'll be ready to tackle greater success right out of the gate.