One major issue for new realtors starting out is getting the very first real estate client.
You might have already researched and found other articles on this topic.
And most of them either give you just some general marketing methods, but often not take into consideration your situation as a new realtor.
Or they take this situation into consideration but neglect the fact that this situation is more than only a marketing and sales problem.
This article is a bit different.
It will make the case that before you get to suitable marketing methods (also covered in this article), you will need the right mindset or to say the right psychological preparation.
So, these are the topics of my article:
- The Typical Situation and Challenges of a New Real Estate Agent
- How to Break Out of the Vicious Circle of Challenges for New Real Estate Agents
- The One Thing to Educate Yourself In
- 3 Marketing Methods and 1 Strategy You Can Start Out with to Get Your First Real Estate Client
The Typical Situation and Challenges of a New Real Estate Agent
The typical situation and challenges of a new real estate agent can usually be divided into four challenges namely uncertainty and fear, being overwhelmed, lack of confidence, and limited money to start out.
1) Uncertainty and Fear
Uncertainty and fear usually come together, since uncertainty is actually a form of fear.
For new real estate agents, this is usually the fear of failure.
This is fueled by doubts and wondering if they will manage to earn money in real estate and whether they will get any clients at all.
Because if they don’t, they feel like they have failed.
There is also the fear of rejection.
This usually happens when they realize they need to get involved in sales and contact “strangers” (sellers or buyers) to persuade them to work with them. And when it comes to sales, rejection often comes with the territory.
Not every buyer or seller will want to work with real estate agents because otherwise, this would be a utopic market paradise and my website here would be obsolete.
2) Being Overwhelmed
A new real estate agent that is starting out is confronted with a lot of information about lead generation, setting up systems, joining the right brokerage, paying different fees while not having an income yet and more.
By being your own boss and being new, you will be a one-man-show doing basically everything such as following up, making calls, lead generation, overall real estate marketing, administrative stuff and more.
In this context, my article about real estate apps comes to mind, where I also mention the typical real estate business processes and which apps can help.
A question related to being overwhelmed is often what to do next, or how to efficiently reach the goals with which strategies and tactics.
So, this whole real estate game might turn out to be more work than you thought and also more work than being a 9 to 5 employee in corporate America.
Why is it important to identify being overwhelmed as a challenge and how is it related to getting the first real estate client when being new?
Well, if you don’t have a structured day in place, with a clear schedule, you might be all over the place and not focus on the most important tasks to get your first real estate client.
Here, the question inspired by the book “The ONE Thing: The Surprisingly Simple Truth Behind Extraordinary Results” by Gary Keller comes to mind that would apply the following question to this situation:
“What is the one important task to get my first real estate client I can do such that by doing it everything else will be easier or unnecessary?”
It also ties back to the 80/20 principle.
3) Lack of Confidence
In other words, lack of confidence also leads to not knowing what to do next.
It is similar to being overwhelmed, but it is actually one of the consequences of that because once you feel overwhelmed, you might realize that you actually don’t know what to do next.
This leads to judging by yourself what influences your confidence in a negative way.
But this is not only the case with being overwhelmed, it happens with all the other challenges.
So, the lack of confidence is actually a by-product of all the other challenges.
In a way, they are all intertwined with each other in a sort of vicious circle.
And if you lack confidence, your potential first client will sense that and this will have a negative impact persuasion-wise.
4) Limited Money to Start Out
This is another important challenge that is actually one of the main motivations to ask the question of how to get the first real estate client in the first place.
In the beginning, you don’t have an income from real estate, but you will still need to pay for some obligations such as office fees, MLS access, and real estate license fees among others.
In a way, it fuels the first two challenges (uncertainty/ fear and being overwhelmed) I already mentioned above.
Not having enough money increases the pressure to getting results which, in turn, creates urgency which, in turn, fuels your doubts. And having this emotional pressure will also affect how your brain works.
It will be more difficult to think with a cool mind and finding the most important tasks to structure your day. Again, it is a bit like a vicious circle.
So, how can we break out of this cycle?
My next section will get into that.
How to Break Out of the Vicious Circle of Challenges for New Real Estate Agents
So, since the lack of confidence is just a by-product of all the other three challenges above, we can confidently ignore that.
Because once we manage to break out of just one of the three others, we will indirectly influence the confidence part.
How to Break Out of Uncertainty and Fear?
This is a tough question and the answer can not only be applied to your new real estate business but also to other areas of life.
So, let’s check first the actual meaning of uncertainty before we get to the solution.
By knowing the meaning, we can derive the causes and then get to a solution.
“Uncertainty refers to epistemic situations involving imperfect or unknown information.
It applies to predictions of future events, to physical measurements that are already made, or to the unknown.
Uncertainty arises in partially observable and/or stochastic environments, as well as due to ignorance, indolence, or both.” (source)
In my opinion, the most important phrase here is that uncertainty arises due to ignorance, indolence, or both.
So, we just need to get out of ignorance and indolence and we are done.
And how do we do that?
You can get out of ignorance when you educate yourself.
By reading my blog, books or participating in courses, you are doing that already.
But in order to know what kind of education you need, you might first go with some self-questioning applying several why-questions.
You could get to a calm or comfortable place of your choice and ponder as deeply as possible the question about in which area you feel uncertainty and why.
Let’s say you feel uncertain because you don’t know (the keyword for ignorance is “I don’t know”) whether you will get a real estate client three months from now.
I will continue with an inner-thinking process in the dialogue form applying several further why-questions:
Q: “Why does not getting a real estate client in three months from now make me feel uncertain?”
A: “In three months I will run out of money.”
Q: “Why would I run out of money in three months?”
A: “Because I don’t have more savings and I don’t have a fixed job.”
So, by asking several further why-questions, you can see already that you get from a vague feeling of uncertainty to the core of the problem behind it.
In this case, it’s not having enough savings and not having a fixed job.
Now, you could further investigate and, for example, ask other more experienced real estate colleagues how long it took them until they got their first client or, even better, until closed their first transaction.
By knowing that, you will be able to plan a runway, and as a backup, you might also have a part-time job, so you don’t rely only on real estate in the beginning.
This process will reduce the level of ignorance that is one of the causes of uncertainty.
This drilling down to the core problem will also give you inspiration in which areas you will likely need further education.
But it is also the ignorance of not being able to discern between things you can control, and the things you can’t control, and let go of the latter.
Relevant to new realtors, here are some examples of applying this principle:
- You can’t control a potential seller that rejects you, but you can control how you react to rejections.
- You can’t control if there is a buyer’s market or a seller’s market, but you can adapt your marketing methods to the different kinds of real estate markets.
- You can’t control if a particular marketing method works, but you can control how you test different marketing methods and what you do on a daily basis having a structured day following your marketing plan.
There are also three general things you can do to counter uncertainty, such as these:
1) Training your tolerance to uncertainty
When you recognize that you have to deal with uncertainty in other areas of your life day by day, such as driving your car (you may have an accident) but still doing it every day, you can put things into perspective.
2) Stick to a schedule and daily routines
While entrepreneurs have to live with uncertainty more than the “normal” 9 to 5 people, it is more important to them to have something that grounds them and gives them structure.
This is where daily routines and schedules come in.
You could have a certain morning routine, and go to bed at the same time.
These routines and structures are again things you can control.
3) Mindfulness Meditation
The last one is mindfulness meditation.
According to a study from 2008 done with unemployed people, mindfulness meditation could reduce the degree of anxiety that was caused by uncertainty.
It can help you ground in the present moment.
And guess what, uncertainties exist most of the time in a hypothetical future created by your mind.
In the short video below, there is an instruction on how to do this type of meditation.
The second cause of uncertainty is indolence.
This one ties a bit into ignorance. Why?
Because if you don’t know what to do, it can often happen that you won’t do anything at all. You may suffer from paralysis by analysis.
But once you have, for example, a real estate marketing plan, a daily schedule, an action plan, a morning routine and you educate yourself, it will be easier to get into action and come out of indolence.
How to Beat Real Estate Overwhelm?
You will soon see that overwhelm can be beaten in a similar way to uncertainty.
It’s again a mind game caused by our primitive reptilian brain that is specialized in flight or fright reactions.
It happens when you have a to-do list with like one million items (at least they feel like one million) and you don’t know where to begin.
The reptilian brain still can’t make a difference between a tiger and a to-do-list and can and will see the latter in the same way as a threat.
Then it makes you freeze or flee. Both states of the mind lead to inactivity.
There are six things you can do to counter that.
1) Cleaning Your Close Surroundings
By cleaning your close surroundings, you not only establish order in the physical world around you, but it has also an effect on your mind.
This can be removing dirty dishes, or getting rid of loose papers.
2) Again Bring Yourself to the Present Moment
This can be done again by mindfulness meditation and other mindfulness techniques.
One simple mindfulness exercise is to first name four things you can see right now, second name four things you can hear, third being aware of four things you can touch, fourth name four things you can smell, and lastly, two or more things you can taste.
This one is the most obvious to do. Lack of prioritization leads to feeling overwhelmed.
There are several things you can do that helps you prioritize. You can ask yourself the already mentioned question from the book “The One Thing”, such as:
“What is the one important task to get my first real estate client I can do such that by doing it everything else will be easier or unnecessary?”
It also ties back to the 80/20 principle.
Or you could also use the so-called “Eisenhower Matrix” where you categorize your tasks into urgent and important, urgent and not important, important and not urgent, and not important and not urgent.
4) Ask Yourself “What Is the Next Little Step?”
Some tasks feel like climbing a huge mountain leading to feeling overwhelmed.
Since no-one jumps to the peak of a mountain in one step, but only by climbing it in little steps, you can do the same with tasks that feel that way.
You just need to break it down into little steps and ask yourself what the next little step you can do is.
5) Back Again to the Stoics
The same stoic question as for uncertainty can also be applied for feeling overwhelmed.
So, again you can ask yourself what is in your control and what is not.
Then, you need to fully accept what you cannot do or control.
6) Optimizing Your To-Do-List
Using sticky notes or loose paper for your to-do-list can bring you to feeling overwhelmed faster than having it in just one place nicely organized.
For example, I have been using Asana for years now and it really makes life easier.
The effect of having a clean to-do-list is similar to having ordered and clean close surroundings.
You can organize your to-do-list by prioritizing, categorizing and also adding time estimations to the duration of each task.
How to Break Out of Limited Money?
If you start out as a realtor and want to go all-in giving up your day job, you will need a “runway” for several months until you get your first client.
Depending on how fast you get your first property under contract, it can take again months until you will get your first commission.
So, of course, the longer your runway, the better it is in terms of allowing for errors in the beginning that can delay your time until you close the first deal.
Having financial limits can be tough.
There are already many blogs and resources out there that can give better financial advice and cover this subject than a short paragraph in this article.
But I will mention just one little tip.
If your financial cushion is not large enough to survive several months without getting a commission, you might consider not going all-in and keeping at least a part-time job.
Maybe you also have some things or assets that you could sell to increase this financial cushion.
This would be the income part.
The other part is the savings part.
You might want to identify areas in your life where you could reduce your costs, and maybe you can also downsize.
On the business side of things, you might want to start out with real estate marketing methods that don’t need much money to do.
The only thing necessary will be a time investment of yours.
I will cover this further down below.
The One Thing to Educate Yourself With
I intentionally covered this mindset part in a deeper manner because the common article about this subject would just give you some real estate marketing tips and that’s about it.
I did this because if you ignore this part, all the other tips closer related to real estate marketing won’t do much good if you don’t have this part ready.
And you might have guessed it already.
Even if I wouldn’t be biased, I would say that the one thing to educate yourself with is (real estate) marketing and sales.
It’s all about being able to persuade a potential seller or buyer to take action to your benefit.
It’s the heart of any business.
Unfortunately, this practical education is usually not part of the curriculum of a typical school for real estate agents.
There, you mainly learn the laws and regulations of your respective state.
Without practical knowledge about marketing and sales, the chances will be quite low to get your first real estate client.
When it comes to sales, especially sales over the phone, I recommend watching the educational material from Claude Diamond on his YouTube channel.
He is quite down to earth and not at all the guru-type personality you find in other parts of the web.
I have also learned a lot in the past from this man.
When it comes to the real estate marketing part, I shamelessly recommend you, of course, my blog.
You might also want to read some books on marketing.
In this article, I provide you with a collection of different marketing books that you could use for your real estate business.
And if you need an overview, you can head over to this page of mine.
3 Marketing Methods and 1 Strategy You Can Start Out with to Get Your First Real Estate Client
I selected the following real estate marketing methods you can start out with and won’t break the bank.
They might only break your “time-bank”.
As I’ve already discussed in this article, there aren’t actually free marketing methods out there.
They either cost time or money.
And depending on your individual hourly rate you allot to yourself, it might be cheaper to delegate.
But you could also consider it as an investment and learning experience which will improve your overall sales and marketing skills that will return you a profit in the near future.
1) Using Resources/Assets You Already Have
This one is rather related to networking and using your sphere of influence.
You may want to enter all the contacts you have already in your database or customer relationship software and let these contacts know what you are doing and how you might be of help.
In this context, my article about following up might also come in handy.
2) (Cold Calling) FSBOs and Expired Listings
In order to get the contact data of FSBOs and expired listings, you could gather it yourself (more time consuming) or you could use service providers.
The latter will cost money, and these costs can add up quickly.
You then set yourself a goal to call, let’s say, five people per day (unanswered ones, or mailboxes don’t count) and call them up.
In this article, I discussed already different prospecting methods and their conversion rates and costs per acquisition, and cold calling isn’t as bad as its reputation, conversion-wise.
You can expect a conversion rate of 2%. So, 50 calls will likely get you one qualified lead.
If you wonder how I arrived at a cost per acquisition of $86.40 for cold calling, this is because I factored in the cost of your time, meaning would you be paid for doing it.
But since you will work for free paying with your time as part of your education, or if you consider this an investment, the only costs, in this case, will be your phone costs.
Here, you can also find my article about cold calling.
3) Door Knocking in Your Neighborhood
Door knocking is another method that will only cost you time and a bit of gas.
If you do this in your neighborhood, you will also save yourself some gas money.
Now, with the global health situation, this one might be a bit trickier than usual.
But nevertheless, the advantage with door knocking is that you can better establish a personal connection than by cold calling and if you rather use a soft selling method as discussed in this article, you might end up with a lead conversion rate of 14% to 20%, provided you manage to knock on 25 to 35 houses per hour (source).
There are many variables involved to make this work, two of them being your personality and your physical appearance.
If you happen to be an attractive female door knocking in an upscale neighborhood, your conversion rate might be in the higher ranges.
A Strategic Decision with Regards to Your Broker
This one can have a big influence on how well you will be able to generate leads, and get your first real estate client.
It is not related to your own efforts but the ones of your broker.
So, the broker you choose to work with should ideally have already a proven system in place to get you new clients to work with.
Since new agents understandably tend to look at what is in it for them, they often focus on the commission split a particular broker is offering without looking at the lead generation part.
Larger brokers often have better commission splits, such as for example 80% and up to 100%.
This sounds great at first glance, but if they don’t help you with the lead generation part, even a high 100% split wouldn’t mean anything without getting quality leads in the first place.
The better bet would be a broker that gets you constantly leads even though you might need to live with a lower commission split.
Let’s just compare two scenarios.
1) Broker with 100% Commission Split
You get 5% on a $250,000 house and manage to sell 3 per year.
Your earnings would be $37,500 ($12,500 x 3).
2) Broker with a 50% Commission Split
Here, you get 50% of a 5% commission on a $250,000 house and due to the many more leads the broker generates for you, you can sell 16 houses per year.
Your earnings would be $100,000 ($6,250 x 16).
Ending this article, you might also want to read my article about different real estate prospecting conversion rates.
It may help you make better decisions in terms of comparing different marketing methods with regards to conversion rates.
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