When starting out in any field, it’s important to know how you will make money. This is especially true for someone trying to start their real estate career, who may not have much experience or established business relationships in the real estate industry. This blog post will discuss how new agents generate leads and do business. We’ll also talk about the costs of being a realtor and how to make the most of your investment!
Best Ways for a New Real Estate Agent to Make Money
There are endless ways to go about making money in real estate, but these are the most common ways new real estates try to jumpstart their businesses.
One of the most common ways new realtors generate business is through leads. There are a few different ways to get leads, but the most common is through lead generation companies. These companies will provide you with a list of potential clients that you can contact and try to convert into customers. The cost of these leads can vary depending on the quality of the leads, but they typically range from $20-$60 per lead.
Get Involved in the Community
Another way to generate business as a new real estate agent is by being active in your community. This means getting involved in local events, joining organizations like the Chamber of Commerce, and networking with other professionals in your area. By building relationships with people in your community, you’ll be more likely to get referrals from them when they need a real estate agent.
The third way to generate business as a new real estate agent is through online marketing. This can be done by creating a website and blog, and using social media to reach potential clients. You can also use paid advertising on Google or Facebook to reach people who are actively searching for a real estate agent in your area. The cost of online marketing will vary depending on the methods you use, but it can be very effective in reaching new clients.
Another way to generate business as a new real estate agent is through traditional marketing methods like print ads, postcards, and door hangers. These methods can be costly, but they can be very effective in reaching potential buyers and sellers who may not be using the internet to search for an agent.
Shadow an Experienced Agent
Many newer real estate agents also link up with a more experienced real estate agent and shadow them, and take leads that they’re not too keen to pursue. This is a great way to get started in the business and learn from someone who already has a successful real estate career.
Try To Be a Listing Agent More Often Than a Buyer’s Agent
A buyer’s agent represents someone looking to buy a home. A listing agent, or seller’s agent, represents someone helping you sell your home. Typically, when a home is sold, the listing agent makes more money than the buyer’s agent because they set up the sale. If a seller’s agent really wants to offload a property for one reason or another, they sometimes incentivize buyer’s agents with higher commissions listed on the Multiple Listing Service.
Those are just a few of the ways that new realtors can generate business. Many companies, like TheMLSOnline, include many of these expenses in their brokerage fees to make them more manageable for realtors, so be sure to inquire about that when you’re shopping for a brokerage.
It’s important to remember that it takes time, effort, and money to build a successful career in real estate. No magic bullet will instantly generate a ton of business, but if you’re willing to put in the work, you can be successful. Just focus on generating quality leads, being active in your community, and using effective marketing methods to reach potential clients. With time and dedication, you’ll be able to build a thriving real estate business!
Let’s get into some of the business expenses of being a real estate agent.
How Much Does It Cost To Be a Realtor?
Let’s get into some of the costs of being a real estate agent. They aren’t few and far between. In fact, the costs can often overwhelm new agents if they aren’t expecting them. And, they usually aren’t expecting them because they get so excited about starting or aren’t even aware of many of the things they’ll have to pay for until they’re already licensed.
Real Estate License Exam and Licensure Fees
Speaking of which, it costs a lot of money to take your real estate courses and become a licensed real estate agent. In Minnesota, there are three main courses, three tests to follow, and then a final license test. After you get your license, you have to pay license fees to keep your MN real estate license active and in good standing.
Real Estate Agent Commission Splits
One of the biggest costs is the commission that you’ll pay to your real estate broker. This is typically a percentage of your overall commission for each sale. Some real estate companies offer agents a commission split around 80%, but this varies across the industry.
If you’re just starting out, your broker might want a higher percentage of the commission versus an agent with more experience. Remember, everything in real estate is negotiable, so don’t be afraid to find a brokerage that offers you a commission percentage that you’re comfortable with. When you go around interviewing and researching different brokerages, make sure you find out exactly how much you’ll be getting paid before you commit.
Also, there’ll likely be administrative fees that come out of every commission check as well, and those are separate from the commission fees you’ll pay your broker.
Another big expense is continuing education. Realtors have to complete continuing education courses on an annual basis. They have to take classes to get a certain amount of credits. Some of the classes are free, but most of them are not. For the most part, realtors are free to choose from a plethora of different courses. However, there are required modules and course categories for which agents must get credits.
Other Realtor Fees
You’ll also have other costs associated with running your business. These can include marketing, gas and car expenses, phone bills, clothing, advertising, office space rental, lock box fees, mailing and postage fees, subscriptions, and more. The good news is that many of these realtor fees are tax deductible! We can break down some of these costs into more concrete categories.
Advertising and Marketing
This can include online ads, print ads, postcards, door hangers, business cards, signage, etc. This is a huge expense for realtors. The costs of advertising are typically some of the highest overall for realtors.
These marketing and advertising fees aren’t just for getting new clients either. Most realtors send gifts or small tokens of appreciation to all of their past clients to keep themselves at the forefront of their minds. They do this to build trust and to show appreciation and thoughtfulness in hopes of getting repeat and referral business.
That’s not all, though. Realtors often also spend a good amount of money contributing to their communities throughout the year to build a strong reputation as a pillar of their town. They might host events, participate in local farmer’s markets, put on seminars or classes for adults or kids, participate in a local parade, sponsor local sports teams, etc.
Transportation and Gas
If you’re using your personal vehicle to show properties or meet with clients, you can deduct a portion of your car expenses. However, you have to pay for the loan or lease payments, gas, insurance, upkeep, and car cleaning.
Office Space Rental Fees
If you’re renting an office space or desk from a real estate brokerage, you might have to pay them for the space. Or, if you get your own office, you’ll have to pay to buy the space or lease the space. You’ll also have to buy office equipment like a desk, chair, computer, printer, etc.
Lock Box Fees
These are monthly fees you pay to access the lockboxes found on houses that are for sale. Most of them are digital now, and you have to pay a fee to have the app that allows you access to those electronic lock boxes.
Mailing and Postage Fees
Any time you send out letters or packages related to your business, you’ll have mailing and postage fees for all of that.
This can include memberships to the National Association of Realtors, your local real estate board, your local MLS, and any other professional organizations you belong to.
You might choose to attend different networking events related to real estate. This can be a great way to meet other professionals and potential clients. However, there will be costs associated with attending these events, like entrance fees, flights, hotels, gas, food, drinks, etc.
You might want to give your clients gifts after closing on a house. This is a great way to show your appreciation and build relationships. However, it can get expensive if you’re not careful. You might want to set a budget for client gifts, so you don’t spend too much money in this area.
Online CRM and Lead Generation Tools
You might also have to pay for a CRM (customer relationship management) system or other software programs you use for your business, like lead gen tools. These can be expensive, but they’re worth it if they help you manage your business and generate leads.
These are just some of the many costs associated with being a real estate agent. As you can see, there are a lot of expenses! However, you can run a successful business without spending too much money if you’re organized and efficient. The key is to be smart about your spending and to always look for ways to save.
Is Any of It Even Worth It?
You’re probably thinking, “Gosh, how do new real estate agents even make money if they’re spending it on so many different things right away?” Well, the answer is simple: they make money by helping people buy and sell houses! And, the more houses they sell, the more money they make. It’s really that simple. Also, those costs don’t come all at once. They’re spread out over time. So, lots of people just keep their pockets somewhat closed until they can make a sale or two, and then they reinvest their hard-earned money into their business.
Of course, it’s not always easy to sell a house. No one ever said it was easy to make it in real estate. In fact, out of all the new people who become real estate agents every year, only about 20% are still in the business after five years.
So, if you’re considering becoming a real estate agent, make sure you’re prepared to go through tough times and some great times! It’s not all glamorous houses and expensive cars. There’s a lot of work that goes into it! But, if you’re up for the challenge, it can be a very rewarding career.
So, What Do You Think?
Are you ready to become a real estate agent? There are a lot of factors that go into it, and there’s a lot of work involved. But, if you’re good at what you do and enjoy it, selling houses can be a very profitable business. So, if you’re considering becoming a real estate agent, don’t let the costs scare you off! It’s definitely possible to make good money in this business. Just be smart about your spending and always keep your eye on your bottom line. Thanks for reading! For more information about becoming a realtor or about your local market, visit The MLSOnline now. Hope this was helpful!