On today’s episode of the InvestFourMore Real Estate Podcast, I talk about what it takes to be a successful real estate agent. I have been a Realtor for 15 years and had many ups and downs. I struggled when I first started and made a grand total of $28,000 in 2006 after I had been in the business a number of years. I went from selling 5 to 10 houses a year to selling over 100 houses and then 200 houses a few years later. Discovering REO was one reason I became so successful, but over the years the REO has decreased in Colorado and it is now a small part of our sales. I have built a team that still sells 100 to 200 homes a year, but now it is mostly retail sales and my team sells the houses instead of me. Two of the agents on my team made over $100,000 in their first year in the business and I will discuss what traits a successful agents has to have to be successful from the beginning.
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Why was I not successful as an agent in the beginning?
I started working with my dad right out of college. I could not find a great finance job, and I decided to work with him in real estate part-time. I got my real estate license, became a full-time agent, and helped him with flips. Many people think it was a huge advantage to work with my father and it was. However, as far as being an agent I probably would have progressed faster if I was forced to work on my own. By flipping with my father I had an extra income and did not have to make all my money from being an agent. I tried to learn everything myself without his help, try new techniques like internet leads, and avoid talking to people. That did not work well as an agent!
I spent most of my time trying new marketing techniques, instead of calling people and meeting people.
How as I able to sell 200 houses in one year as an agent?
I became successful in REO, but I got into REO by getting out of my comfort zone and cold calling banks. This was not fun for me and hard to do, but I did it. I put 100 percent into figuring out how to list foreclosures, complete BPOs and I stopped messing around with new marketing ideas. I also stopped working on the flips as much. That focus really helped me find my niche and succeed.
After cold calling banks, I signed up on a couple of sites for REO agents and I started to apply with every asset management company I could. I started to get a few BPOs (broker price opinions), which are valuations on properties, like an appraisal, but they are performed by agents and not an appraiser. I would get paid about $50 for each BPO and it took me about an hour to complete each one. I did not mind the extra money and after a few months of completing BPOs, I got my first REO listing. The property was about 40 miles from me, but I was ecstatic to get it. I had no clue what I was doing, but the asset management company gave me tasks and I completed them. I had to have the yard mowed and cleaned up, but had no one to go to the property to complete the work so I did it myself. I later realized that I was not supposed to complete any of the repairs or yard work myself.
I got a few REO listings my first year after pursuing them. In my second year, I sold about 20 REO listings and completed hundreds of BPOs. In my third year I sold over 50 houses and the next year I think I had over 150 sales. I attended REO conferences, worked hard to apply with every company I could, used social media to find asset managers and gained more and more business.
How did I build a team to sell more houses and do less work?
I bought my dad out in 2013, because he was getting close to retiring and I wanted more control. I knew the REO business would not last forever, because the market was improving and foreclosures had decreased greatly. I had been buying rentals and increased the amount of flips we did, but I knew we had to change things on our team as well. I hired a few more agents, hired my friend Justin to manage my team and we focused on traditional real estate sales.
Basically what I did was use the techniques my dad had used to become successful. He was not a REO agent, but sold over 100 houses multiple years as a traditional agent. He focused on:
- Calling people all the time
- Creating a database
- Marketing to the database
- Doing an awesome job for his clients
- Referral business
We taught this to the agents on our team and most of them found immediate success. A few did not, but they did not listen to what we were teaching and tried to do things their own way. I already knew that did not work well. I went from having 80 REO listings at one time to currently having less than 5. I am still one of the top REO agents in my market, there are simply no foreclosures because our market is so strong. However, our team is still doing awesome, because we taught our agents the fundamentals of selling houses.
I talk much more about how to be successful as an agent on the podcast, so make sure you listen to it.
What is the first step to becoming a successful agent?
If you want to become an agent, you should be planning your business well before you get your license. One of the most important steps is choosing the right broker. To be a successful agent, you must have great training. I have also created multiple resources for agents.
- How to Make it Big as a Real Estate Agent: I complete rewrote my real estate agent book and it is now available as a paperback! You can get it here on Amazon in paperback or Kindle form.
- Six Figure Real Estate Agent Success System: I created this program to help agents succeed with a step-by-step coaching program. It comes with a ton of resources as well as coaching calls from me.
How can you get the Six Figure Real Estate Agent Success System for free?
I am giving away two of my coaching programs for free. All you have to do is buy How to Make it Big as a Real Estate Agent and leave a review on Amazon. Email me at [email protected] to let me know you left a review and you are entered! I will randomly pick two winners on June 24, who can pick any of the coaching programs in my store: The InvestFourMore Shop. If you leave multiple reviews on my books, you will get multiple entries.
Be sure to leave a review!
Hopefully you are listening to the podcasts and not just reading these write-ups! There is a lot more great information on the shows. If you want to help me out, leave a review with iTunes for the Podcast. Those reviews let me know that I am helping people and to keep working hard!
[00:00:58.0] MF: Hey everyone, it’s Mark Ferguson with InvestFourMore. Welcome to another episode of the InvestFourMore real estate podcast. Today, I’m going to talk about being a real estate agent. I’m going to go through what has helped me become successful, what has helped other agents on our team become successful and kind of give a little blueprint walkthrough for getting started as an agent building your business and ultimately, what I think we all want is to sell houses without doing a lot of work which is always nice.
So before we get into that, I’ve got a few other things I want to talk about going on with the podcast, the website and a new book I’ve got out. First off, thank you to everybody who’s been an avid listener, reader, I love hearing from you guys and getting comments and feedback on how I’m doing and how I’m helping you out. I love hearing that so keep it up. For the podcast, some of you may have seen e-mail go out. I’m going to start changing the format on a couple of episodes.
I’m going to be interviewing some investors who aren’t full blown, full time real estate investors, have their own website, marketing stuff and all of that. It’s going to be regular people, maybe they have bought one or two rentals, maybe they’re just starting to flip, maybe someone who hasn’t even started yet and the goal is just to give people an idea of what they’re going to when they first started, how they’re able to pull the trigger on their first deal, how it went and then hopefully at the same time, I can give some coaching tips, some advice, help them become even more successful. Do things a little better maybe, maybe they’ll teach me something too, you’ll never know?
And then after we do that first episode, I want to reach back a few months, maybe follow up with them, see how they’re doing after a few months have past. If they worked on a flip or they bought some rentals, see how it’s gone if it’s everything that they thought it would be or if they face bigger challenges and hopefully, that can give a before and after look at where somebody is at their investing career, how they’ve gone through. I know it will be a short time period but who knows? Who knows how long the podcast will go? Maybe in a couple of years we can follow up with them again and see where they’re at, that might be kind of cool.
So I’ve got that in store, I’ve got a people lined up already. If you are interested in doing that, please send me an e-mail, [email protected]. I want people who are serious, I want people who have either bought at least one rental, one flip already or really, really close to buying one. I want to make sure that you’re somewhat educated too. So my only requirement at the moment is that you’ve bought and read one of my books and you leave a review for me on Amazon so that I know that you’ve taken at least some work to get in the running to be on the podcast. It takes five minutes to leave a review. I love seeing those reviews so if you have bought some of my books and you like them, please let me know by leaving me a review on Amazon and that really helps me out as well.
All right, speaking of books which is very related to this podcast, I have completely rewritten my real estate agent book. It used to be called How to Make it Big in Real Estate, now it’s How to Make it Big as a Real Estate Agent, so that people know that it’s all about being a real estate agent. The book is now 220 pages long. I added twice as much information that was in it before. It’s in paperback now as well as Kindle. It’s available on Amazon at the moment. I will leave a link in the write up for this podcast as well but you can always go to Amazon.
Just search for “Mark Ferguson books”, I should pop up number one or you can search for How to Make it Big as a Real Estate Agent, it will pop up. Or if you want to read my other books, How to Build a Rental Property Empire, Fix and Flip Your Way to Financial Freedom, those are also available as paperback or Kindle and just so people know, you don’t have to have a Kindle to read the Kindle version. You can get an app for your phone, for your tablet, for your laptop almost anywhere now so you don’t actually have a Kindle to read the Kindle.
All right, going along with that new book which really goes over everything that I have done in my career, how I went from selling a few houses a year to selling over 200 in one year, it also talks about how I’ve helped my team succeed. I’ve got two agents on my team who made over $100,000 their first year in the business. Brand new, never been in real estate before, they joined our team and we helped them out tremendously. I have also got another agent who just joined my team who I think is probably going to be in the same boat, we’ll see. It hasn’t happened yet. He just started, but there’s a lot of money you can make in real estate. If you know what you’re doing, if you’ve got a plan and if you do the right things. There’s a lot of distractions in real estate as well.
So hopefully the book can help you figure out the best way to become a real estate agent, where to start, brokers to choose, all of that stuff which we’ll be talking about in this podcast as well but it goes into much more detail in the book and for people who buy that book, I am doing a contest. If you buy the book, leave a review on Amazon, send me an e-mail letting me know you left a review. I will be giving away two of my coaching programs.
So either the Six Figure Real Estate Success System which is a coaching program for agents. We do coaching calls twice a month, you can get that for free or any of my other programs, The Complete Blueprint which comes with coaching calls as well. My new fix and flip training program. Two lucky people will be winning those. All you have to do is leave a review, let me know and you will be entered. So I think I’m going to run that contest about two weeks and we’ll select some people for that.
All right, cool. So that’s all the housekeeping, now we can get started on How to become a Successful Real Estate Agent. There’s a lot of misconception out there about real estate agents, about the work they do. Some people think they make tons of money without doing much work and a lot of people think they make no money and do all kinds of work. It’s a mix in between where it really lays and you will find huge differences in how successful one agent is versus another based on the broker they use, the training they have, their own personal motivation, those are just big, big differences.
What I see in the business, and it’s very common, is the 80-20 or even 90-10 rule which is basically 10% of the agents make 90% of the money and that is very true. There’s probably three or four agents besides people on my team in my office who make $200,000 or more a year and then there’s about 40 other agents who probably make less than $20,000 a year but they’re at home agents. They’re part time, they don’t put any effort into it so those numbers really drag down the averages of what real estate agents make.
So if you go online and say, “What’s the average salary for a real estate agent?” You’re going to find that it pops up like $30 or $40,000 with some sites depending on how old the information is and that scares so many people away. It’s like, “Oh my God, I don’t want to be an agent. They don’t make any money,” but the truth is, all those part time agents, all those agents that are at home sort of working bring that average down a lot. If you are full time, if you’re in the office, if you have a plan, if you’re out there talking to people, if you’re doing the right things, you can make a lot of money as an agent.
Eventually you can build yourself a team, eventually you’re going to have other agents selling houses for you and you can go do other fun stuff, which is where I’m at right now. I mean I spend very, very little time as an agent myself. I’ve got 10 people on my team. We have six or seven licensed agents, they sell almost all of the houses. I still do a few foreclosures here and there but for the most part, I am working on the blog, I’m working on my flips, I’m working on my rentals and I’m playing golf once in a while, hanging out with the family. It’s really cool when you set up your business as an agent to work for you and you’re not constantly working in it. So that should be the goal of every agent.
Then the other misconception out there is how much time you spend as an agent. You hear, “Oh you’re going to be driving around buyers all day long in your car looking at 30 different houses.” I have never driven a buyer around in my car. Part of that was because when I first started, I had a 1991 Mustang that I really didn’t want to drive anybody in. It was a cool car, I loved it. It was a convertible, it was not exactly a real estate car and then you can meet people at houses.
You don’t have to drive everybody around. You can meet people at houses, you can list houses, if you spend your time wisely, you won’t be going berserk working 80 to 100 hours a week and driving around everywhere, putting the wear and tear in your car. Now there will be some of that but it can definitely be limited if you’re doing the right things and really working smart not just doing busy work.
All right, so what is the first thing an agent or a perspective agent should do? A lot of people just jump in, take the real estate education class, go find any broker they can and just boom, they’re ready to sell houses. But you should be planning and figuring out what you’re going to do well before you take any classes, well before you decide for sure you want to be an agent. You need to research to see how much time you have, how much money you have saved because you might not sell a house for a few months.
You might have a couple of months where you don’t make any money at all, you have to plan for those things, you need to pick the right broker. That could be the biggest decisions any agent makes is choosing the right broker from the beginning and a lot of people don’t do that. It’s just crazy how they will go up to the broker that charges the least amount of fees thinking that they will make the most money but I have an old saying which is, “If you get 100% commission, 100% of zero is still zero.” If you don’t sell any houses, it’s not going to matter what the commission split is.
So choosing a broker is probably one of the biggest decisions anyone can make and I always say pick the broker with the best training. Don’t pay attention to what commission split they pay. So when you become an agent, you have to hang your license with the broker and almost every state, I don’t know any state you don’t, you have to work with a broker in the beginning. They kind of oversee you, should help you out and in return for that, you have to pay them some fees. Some brokers maybe charge $200 per closing, real low and they don’t offer any services at all. Other brokers might take 50% or 40 or 30% of every closing you have, each commission check, and you might have to pay some desk fees and some other fees on top of that and agency, “Oh my God, that’s half my money they’re taking. I can’t do that. I need to go somewhere where I keep all my money.”
But the brokers that charge those high fees, for the most part, are providing services. Maybe you’ve got administrative staff, you’ve got an actual office, advertising, floor duty where you take calls that come into the office, leads coming in from the broker. Also they will be hopefully training you, showing you exactly how to sell houses, how to make money in the business because real estate school does not teach you how to sell houses.
It teaches you how not to break the law, how not to mess up and get yourself in trouble with the real estate commission or the state. It does not tell you how to find clients. It does not tell you any of that so don’t go to real estate school expecting you’re going to learn everything about selling. You’re just going to learn the rules and regulations. You really need to have a mentor, a broker, someone who can help you get going quickly once you get your license.
So please take your time in choosing a broker. I talk a lot about that in my book, just the questions to ask, you should be interviewing the broker. They should not be interviewing you, you should be interviewing them and see what kind of training they offer and how their office works and don’t just talk with the broker, talk to a couple of agents in that office too. Ask them, “Hey, this broker says they offer such and such training, they say they do this and that, is it true? Did you really get that training when you came here?”
Because some brokers will say that but they don’t really offer that much training while others will offer a ton of training and be awesome. On my team, I am not the broker of my office but I operate a team that’s like having my own office within the office. I don’t have to deal with the building, with the administrative staff and all of that but I can still manage my team and it’s really nice how it’s set up for me but we do a 50-50 split for agents and a lot of agents are turned off by that.
They say, “No, we’re not going to do that,” and I’m like, “Well, we’re looking for very few agents who are awesome. We don’t want 20 warm bodies and maybe one of them will sell some houses.” We want any agent of our team to be awesome because we spend a lot of time, a lot of money training them to get them to a point where they can sell a lot of houses and after a certain amount of sales come in, you do get a higher commission split. It doesn’t stay at 50-50 forever.
But the training we offer people, I mean we’re doing weekly training, one on one training shadowing, mentoring, that’s why our agents do so well right out of the gate because we offer that training. We show them exactly what to do, how to get everything set up from the very beginning. If you’re just at a broker who is going to let you go free and say, “Hey, good luck. Go sell some houses,” you have no idea what to do. It might take you two years to figure out how to sell houses, how to meet people, how to get things done and it’s really going to turn you off.
And that’s why a lot of agents fail as well just because they don’t get the training they need to learn how to sell, what to do and really how to put themselves in a good position for success. So even before you get your license, before you choose a broker, you should be marketing yourself. Talk to everybody you know, you might hear “sphere of influence” a lot, it’s huge. Yes, it’s 50 years old but it’s been around that long so it works.
Basically, you talk to everyone you know. You let everyone know you’re an agent, you’re becoming an agent. You don’t have to sell yourself. You don’t have to go out there asking people to sell their houses or asking people when are they going to buy a new house. Just let them know you’re changing careers, you’re going to become an agent and if you remind them enough, they’ll start asking how it’s going, you can talk about how you’re doing over houses, showing them whatever it is.
Just let people know, that’s all you have to do and the more you can do that, the more people will remember you. They might use you when they are ready to sell and they might even refer people to you, which is one of the best things you can do as an agent is getting referral business. We’ll talk about that in a little bit later.
All right, so once you first get your license, found an awesome broker, I see a lot of agents who get stuck in learning phase. They go to every class that they can go to, they’re at their computer all day long researching, they’re looking at the best way to get leads, building a website but they aren’t out in the field doing anything. They are not talking to people, they aren’t showing houses, they aren’t doing open houses. They’re just stuck in learning phase.
One of the best things that you can do when you get your license is just go out and talk to people, do open houses, just get out there and do it. I don’t care if you don’t know what you’re doing because most people don’t know what they’re doing when they first start. The best way to learn is to get out there and do it. Now it helps if you have someone to shadow you and help you and take you with them but even if you don’t just get out there and talk to people. That’s the best way that you can start your business growing fast. Open houses are one of the best ways to start out as a new agent. You don’t have to have a ton of listings to do an open house.
Usually if you work at a bigger office, there’ll be lots of listings. Lots of agents will let you hold open houses at their listings because it’s free marketing for them. They can go to their sellers say, “Hey we’re doing open houses weekend”, they don’t have to tell them that it’s another agent. They can but it makes them look good because they’re being proactive, they’re doing open houses, they’re doing stuff for their clients so they don’t have to do any work. The other agent, the newer agent or someone else can go do the open house, awesome way to get business, to meet people if there’s an open house.
So if you have time in your hands, do as many open houses as you can. You don’t have to do them on the weekends. You can do them on a Friday afternoon, you can do them when school gets out. If you’ve got a listing that’s right next to the school, that’s a great place to do open houses and don’t just show up with an open house sign and expect people to come in and buy it. You’ve got to put up multiple signs, make sure everybody knows where it’s at, balloons are awesome. Make sure it’s very inviting, people know it’s open, the doors are open if it’s not too hot or too cold and then you have to get people’s number and names too.
So we always have contests like “guess how many M&M’s are in the jar?” And then we’ll give away a free gift card for whoever wins. We can call back every single person who leaves a card and say, “Hey sorry you didn’t win, but maybe better luck next time.” There’s lots of ways to get people’s information and that’s really what it’s about, talking to as many people as you can, getting their information and then once you get it, you want to create a database. So you’ll hear a lot about database, building that as an agent. Huge. So important.
You should have some kind of software or some kind of program that you can use yourself where you can list everyone’s name or e-mail address or address if you can, birthdays, anniversaries, whatever information you can about them and then you should be marketing to them every month through e-mail or direct mail, phone calls, something just keeping in touch with them.
Nothing crazy, you don’t have to send them market reports every single month but cool stuff like recipes or kid’s activities, anything that’s interesting. Market to them on Facebook, if you can get people’s Facebook get them to like their page. All types of things you can do as an agent. There’s only so much time I have on this podcast but like I said, there’s a lot more information in the book on all of this different activities as well and as my coaching program too.
So another way, besides open houses where you can meet people, I get a lot of questions from people who say, “Hey, I’m moving to a new town or I don’t know many people where I’m at now. I haven’t lived here that long. Can I still be a successful agent because I don’t know that many people?” And my answer is, “Yes, you can.” I know an agent, this is a while ago but he was in Colorado one of the top agents, a huge producer. He made probably close to a million dollars a year after all expenses.
He’s in Colorado and they moved to California and knew nobody out there and I think in two years, he’s up to the same production he was in Colorado and he did open houses every single day for his first two years in the business and he was back where he was just working hard and killing it. You don’t have to do that, you don’t have to do an open house every single day but there’s ways to meet people, ways to get business. You don’t have to grow up in a town or the day your whole life.
I know a couple of agents who moved to Arizona from a new town and had been agents before and in their first or their second year, they are making $400,000 a year or something ridiculous and their third or fourth year, they’re close to a million because they just worked like crazy the first couple of years and then they build their business up, built their clientele and the relax and could sit back from there so you don’t have to be in a town to meet people.
But open houses are a great way, joining clubs, activities, things you like to do, if you like to golf join a golf league. If you like to play basketball join a basket league, whatever you like to do join a club. If you are involved in a church, get involve in a church. Tell people what you do. So many people are afraid, they’re like, “I don’t want to sell myself. I’m not that type of person.” You’re not selling yourself, you’re providing a service for people.
All right people have to buy houses, they have to sell houses, do you want them to use someone they don’t know who may or may not be a good agent, who might really hurt them financially? Or do you want them to use someone they know like you who’s going to help them, be an advocate, be a great agent for them? So you’re helping people in real estate, you’re not selling them, so it’s very important to realize that.
All right, another thing to consider is joining a team. Should you join a team when you first start out as an agent? I think it can be a really great situation to join a team if it’s the right team. Again, don’t just join any team. You want to interview them just like a broker, see what training they provide, see if they’ll give you leads. In some cases, a team may even be able to pay you hourly if you’re willing to do grunt work, contract work, some other gopher tasks.
So that might be a way to get started making a little bit of money as well, which is a great way to get started to if you’re tight on funds. So joining a team I think can be a great way to start out. A lot of people are asking me about joining teams that are in property management because they might get paid hourly and learn to sell houses as well. I am not so keen on doing that because most property managers are renting houses.
Maybe they sell a few houses here and there on the side but you’re not going to get training on how to sell houses. You’re not going to have a mentor on how to sell houses. You’re going to have someone teaching how to manage rental properties and there’s usually not a lot of money managing rental properties. You’ve got to do a lot of work, a lot of houses to make something. So I say shy away from the property management side.
Really try to get involved with an agent who is selling a lot of houses. You want to learn from somebody who’s doing what you want to do and if you want to sell a lot of houses, be in a brokerage, an office where there’s lots of agents selling a lot of houses. Don’t go to a property management company where they’re renting houses.
All right, so once you have gotten established, you’re meeting people, you’re learning, you’ve got a few deals going on hopefully, one thing I see agents do too that kind of hurts them is they’re just looking to close the deal, get it done as fast as possible and then move onto the next deal. But as an agent, we have talked about this before, your job is to take good care of your clients as you can. Really be an advocate for them, help them through the process.
Most people don’t know what it really takes to buy or sell a house. They only do it once every five or 10 years because they don’t know the process. It’s your job as an agent to help them through the process. Know about inspections, about appraisals, about financing, about title insurance. So really take care of your clients, help them through the whole process, if there’s a problem that comes up, do what’s in your client’s best interest. Don’t do what’s best for you to get the deal done.
If you go out of your way to help your clients, that will last with them and stick with them for a really long time and they will become your biggest advocate. They will tell people about how you helped them. That will get you much more business than if you sacrifice doing the right thing for them for a commission checks because you needed money that month. So do what’s best for your clients.
That will help you build your business far more than looking short sighted just trying to get houses sold and once you sell houses, put those people in your database, keep marketing to them, keep letting them know that you’re in the business and if you do a really good job for them, like I said, they will refer people to you. They will send people your way which is when the business really gets fun is when you don’t have to do very much marketing, you just got people calling you all the time.
All right, leads. I want to talk about leads real quick. There’s a lot of different ways to get leads out there. There’s Zillow, there’s Trulia, there’s Realtor.com, all types of online marketing. We were Zillow agents. We’ve done a lot of different lead sources and Internet leads can work, but you have to work them really hard, be really on top of it. Money will not just come walking in your door. The reason is many of those leads will be sent to multiple agents, whoever calls first gets the client. You have to be very fast, really on top of your game to get those.
So what we have actually focused on lately is building our own website and advertising our self on Facebook advertising, Google we’ll advertise and it has worked so much better than using any other online lead source. We advertise ourselves as a team and we get people who are looking for agents to help them find a house not just someone looking for one house, one deal, calling 20 different agents.
So we have done awesome having our own website. We didn’t make it crazy, we don’t spend all our time on it but advertising our website, spending our money there has been much more effective than signing up for Zillow, signing up for Realtor.com than any other sources like that. We actually stopped using those places as well.
All right, so once you have gotten to this point and you’re starting to do well, maybe you’re getting some listings now, what about building your own team? That’s really where there’s opportunity in real estate to start your own business. Not being one single agent doing everything, running around doing contracts, showings, listings, all that yourself is when you can build a team and hiring help as soon as you can afford help, I would hire an assistant.
Who can help with the busy work, help with the contracts, talking to tit;e companies, talking to lenders, all of that and that leads you more time to sell houses which will make you more money. The more houses you sell, then there’s more opportunity bringing another agent with you and start giving them some leads or maybe you’ve got buyer leads coming in and you can’t handle all of them and that’s how you slowly start building a team.
That’s like my model I feel. First you hire an assistant to help you out then once you really get going, you get too much business you can handle then you bring on another agent, teach them the ropes, get it going. Maybe bring on another agent then maybe you hire an accountant and just slowly start building and it’s really cool when you got agents selling houses for you.
You get a piece of each of their commission and you aren’t doing the work. They’re doing it all. So that should be the ultimate goal I think for every agent is to get to a point where they can go on a vacation without working, they can go leave for a day without worrying about their business and that’s an awesome feeling.
All right a few things I’m sure some of you are wondering about the REO business because really what helped me sell 200 houses in one year was being an REO and HUD listing agent. I got a lot of questions about HUD and REO. As a brand new agent, it’s really hard to get in listing foreclosures, listing HUD homes for banks. It’s going to be really tough. Most banks will even require that you’re licensed for two years before they’ll even contemplate adding you to their roster.
But that doesn’t mean that you can’t get started right away building a resume and getting into the business and one way to do that is BPO’s which are broker price opinions. You can sign up for broker price opinions as a new agent and a lot of people will get orders right away. They usually pay from like 40 to $70. What you’re doing is going to inspect the house, doing a short report, three comps for sales, three comps for listings.
You’re given the bank or whoever orders the BPO an opinion of what you think the house is worth, you send them into them and they can pay you $50 bucks for it, maybe less or maybe a little bit more. At one point when I was first starting out in the business, an REO business, I was doing 1,000 BPO’s a year, which was close to 50,000 a year and that wasn’t my entire business. I was just at this at the BPO side, that’s also listing REO’s and HUD homes as well.
So you can make money right away doing BPO’s as an agent. So that’s something else to consider and doing BPO’s give you experience with what REO companies want when you’re listing REO’s. They could also open a doorway to getting REO listings later on in your career. If you’ve got experience doing BPO’s it looks much better and if you’ve got no experience with BPO’s, no experience with REO’s, BPO’s at least lets the bank’s asset management companies know, “Hey, you’ve got some experience in the field, you’ve got some idea on what you’re doing. “
[00:28:15.9] I would not get into real estate business, become a real estate agent thinking you’re going to list 100 REO homes your first year or your second year. It takes a long time to get in the business to get clients but again it’s a wonderful business once you’re in it because you kind of have listings coming to you without marketing, without having to go after them all the time.
I also have an REO and BPO starter kit for people looking to get into that business. It comes with all the information I’ve gathered to get started, video training and I also give a list of companies that I work with, BPO and REO companies that I know are currently doing business in this area. Other things to consider as you build your careers working with builders. If you can get in with a builder, that’s a great way to do business. The really big builders, the national builders basically hire salaried employees to sell their houses.
So I would not make that a goal working with Lennar or some of those big ones, they basically hire people as sales man and they’re not even allowed to sell their houses. So what you’re looking for is the mid-level builders, the local builder, if you can get in with them awesome, again networking. Knowing people is really the best way to get into that business. Again, it’s all about talking to people, all about networking, meeting as many people as you can and building a good reputation for yourself is how you can really succeed as an agent.
Relocation companies is another thing to think about as an agent. It’s not easy to get in with a relocation company. You’ve got to take a test, be registered with them and then it takes six to eight months to be certified for a lot of the really big relocation companies and realize too, you’re paying a part of your commission to those relocation companies. You’re not keeping it all but if you are ready to commit to them, go for it.
That can be a great source of listings as well because they will give you sellers. You handle the whole situation. You work directly with the relocation company. It can be a great business to be in but it does take some commitment and sometime just like working with builders does, just like getting into the REO business does, all of that will take time and commitment. It won’t happen in a month or two.
So that is about all I’ve got to go over. Being an agent, like I said, there’s a lot more in my books and in my coaching. There’s only so much you can go over in 30 to 40 minutes. Really the main points that I want people to remember is you can’t be afraid to talk to people. You’ve got to talk to everyone you know. You have to sell yourself but you have to let them know you’re an agent. Take awesome care of any clients you have. Do the right thing, be their advocate. Don’t just once you get a house or contract forget about it and hope everything goes well.
Work with the lender, work with the buyers, work with the sellers, be involved, show them that you are earning your money and doing a good job for them and then you have to create a database. You have to market to that database, you have to keep in touch with people. I forgot the statistic but 60% of people don’t remember who the agent was who sold them their house because most agents don’t market. They don’t have a database, they don’t market to people, they don’t remind them who their agent was so please market to your past clients and to your potential future clients.
All right, I believe those are the main points, that’s what I want to talk about. Again, my book has a lot of this information, please check it out, How to Make it Big as a Real Estate Agent, I’ll have a link in the write up from this podcast and like I said, we’re doing the contest for the Six Figure Real Estate Agent Success System. All you have to do is to leave a review, e-mail me and let me know at [email protected] and yeah, we’ll be doing the new podcast episodes soon with some more beginning level investors. I think that will be a lot of fun.
All right, thanks again for listening. I hope everyone has an awesome week and we’ll talk again soon.