I have been a licensed real estate agent for 15 years. I have worked on a team, worked in very specific niches, and I currently run a real estate team of ten. Over the years I have seen many great agents and many unsuccessful agents come in and out of the business. I have seen successful and unsuccessful agents on my own team as well. The great agents have many similar traits that I have talked about in multiple articles and in my book. Getting business is key to any great agent, but the agents who last and build a business, don’t focus on only getting business. To be a great real estate agent, you have to take care of your clients and perform well once you get the business. Some agents feel their job is over once a home sells or goes under contract. How well an agent does for their clients after a closing or a house goes under contract will often determine how successful they are in the future.
How can you become a great real estate agent?
The first step in becoming a great agent is to get your license and find a place to work. I have talked about the basics of how to do this in the following articles:
- What is the best way to get your real estate license?
- What are the real estate education requirements?
- How to choose the perfect broker?
- When should a real estate investor get their real estate license?
Real estate agents have to take classes in the state they want to do business in and pass a test in that state as well. Once they pass their test and take the classes needed, they have to choose a broker to hang their license with. Choosing the right broker can be the biggest decision a real estate agent makes. Once you have picked a broker and start to work as an agent, you have to find clients to sell houses to or for.
- How much money do real estate agents make?
- How do real estate agents make money?
- How much money do real estate agents make their first year?
- What is the best way for real estate agents to get leads?
If you are looking to get your real estate license, Real Estate Express has been a great online school for my team, and one of the most affordable.
What is the best way for real estate agents to get leads?
Getting leads is the main goal of most real estate agents, and most companies that market to real estate agents. When you become an agent, you will be inundated with calls from marketers trying to sell you on the next best internet marketing platform. We use online internet lead generation tools like Zillow, but they are usually not the highest quality leads. Many internet lead sites give leads to multiple agents, and many internet buyers or sellers are just testing the waters. We have had the best leads from our own website and from our circle of influence. Your circle of influence are you friends and family, and anyone who is an agent should know that term well. Your circle of influence can also be past clients who become your friends or at least your advocate after they see how good you are at your job. You cannot concentrate on only getting leads, you must also do a great job for the leads you have before, during, and after the buying or selling process.
How can real estate agents go above and beyond when working with clients?
Real estate agents tend to work very hard to find clients and get them under contract. Under contract means there is a contract signed by all parties to either buy or sell a house. Typically when a contract is signed, the property will sell in 15 to 60 days depending on the deal. The agent makes their money when the deal closes. Even though a property is under contract does not guarantee it will sell, many agents act like the deal is done at that point. There are many ways a contract can fall apart:
- Inspection issues: Most buyers will have an inspection done which may show problems with the house. If the sellers and buyers cannot come up with solution to inspection issues, the buyers can terminate the contract.
- Appraisal issues: When a buyer gets a loan on a home, the lender will almost always require an appraisal to be completed to verify value. The appraiser may not value the home high enough or may require repairs to be done by the seller before closing. If the buyer and seller cannot agree on appraisal issues, the contract could terminate.
- Lender issues: Not every lender is a good lender. I have had many lenders cause a contract to fall apart because they were lazy or did not know what they were doing. Lenders can do a bad job of qualifying buyers, which will cause a contract to fall apart and they can cause delays in closing in many different ways. As a buyer’s or seller’s agent you need to be very proactive with all lenders.
- Title company issues: Most title companies do a very good job, but some can cause problems as well. We have had title companies send the wrong figures to the buyer or seller or even have the wrong name on the deed when selling a house.
A good real estate agent will be checking on all the moving parts of a transaction to make sure people are doing their jobs. You cannot sit back and assume all is well.
For much more information on being a great real estate agent check out my book: How to Make it Big as a Real Estate Agent: The right systems and approaches to cut years off your learning curve and become successful in real estate. The book is available as an eBook or paperback on Amazon.
How can a real estate agent help with inspection issues?
Most buyers will want to have an inspection done, unless they are very savvy investors like me. The buyers’ real estate agent can suggest inspectors to use, give them an idea of what the cost will be, and educate them on home inspectors. Most inspectors do not guarantee their work, unless an extra fee is paid, most will not do radon tests (radon is a gas that can cause cancer at high levels) unless they are asked to, and an agent needs to make sure their buyers know this. There are different rules for inspections based on the type of sale as well. HUD homes have very strict inspection guidelines as do many REO listings.
Once a home inspection is complete, some inspectors can make a nice house seem like it needs to be condemned and other inspectors can make a horrible house sound decent. The agent should help the buyer decipher what is important in an inspection report and what is not. The best way to kill a real estate deal is to ask the seller to fix every single item an inspector says might need fixed. Some agents think they are helping their buyers get the best deal, when they are actually making the seller mad and less likely to negotiate. It is usually best to ask for the most important or dangerous items to be fixed, and not the splotch of paint on the window. If an agent continually asks for every thing to be done on a house, it can also make other agents not want to work with them. A good reputation is importation on this business.
How can real estate agents help with appraisal issues?
We have appraisal issues come up all the time when we are working with buyers or sellers. An appraiser is pressured to not value a home too high after the housing crisis. It is very important that real estate agents are proactive when dealing with appraisers and help them in any way possible. Our real estate commission in Colorado encourages real estate agents to contact appraisers before they view a home, and ask if they need any help with comparable properties or information on the home. We will pull up as many comparable sold properties as we can and give those to the appraiser to help them value the home. The appraiser is usually appreciative and some even ask for help. Make sure you know what a good comp is, and you are not giving the appraiser properties that he would never use to value the home. We also give the appraiser a list of repairs if we just remodeled the property so he knows the house is in great shape.
On a deal I did earlier this year, we had an appraisal come in low. The house was under contract for around $220,000 and the appraisal came in at $215,000. When the appraisal comes in low, the buyer has to base their loan on the lower value, which means they have to bring more cash to closing or the seller has to lower their price. I was representing the seller and the buyer had no extra money. Our only choice was to lower the price or challenge the appraisal. Many lenders will not even tell agents they can challenge an appraisal, but it is possible. I looked at the appraisal to make sure all the comparable properties used in the report were valid and the property being valued had the correct information entered. I noticed right away the appraiser listed the home he was valuing over 200 square feet smaller than public records listed. Appraiser are supposed to physically measure every house they appraise. I went to the house and measured it myself and came up with the same number as public records. We challenged the appraisal and had the appraiser remeasure. He had measured wrong, and when he re-figured his adjustments, the value of the home came in at $220,000 which saved the seller $5,000. Many agents will complain the appraisal came in low, but do nothing to fix the problem.
How can real estate agents prevent lender issues?
We have had many problems with lenders over the years. One of the worst was about ten years ago when we were selling a house for someone in foreclosure. The foreclosure rules stated the seller had until a certain date to sell the house, or they would lose it. We listed the home for the seller and another agent represented some buyers who were getting a loan on the home. We told the lender about the hard date that had to be met. They said no problem we can get the deal done by then. We kept checking with the lender who said they were still on track to close as the closing date approached. A few days before closing, the lender said they needed more time, because underwriting was being slow. We told them they had to close at the date and we had constantly told them they had to close by then or the seller would lose the house. The lender claimed they were able to get the foreclosure date extended all the time and it was not a problem. We told them that was not the law, but we did not have time to find a new buyer and the lender claimed they would try their best. They did not get the loan approved on time, and the seller lost their house to foreclosure. The buyer lost the money they spent on the inspection and appraisal.
We were on top of the lender during that deal, but still could not save it. Many agents will not check in with lenders to see how the process is going. Many good lenders will keep in touch with the agents, but not all lenders are good! On another deal I have listed now, we had to extend closing three weeks because a lender forgot to order the appraisal. We are listing a house, the buyers of that house had to sell their house, and the buyer of their house had the lender who caused the problem. We were in touch with the lender of the buyer who had our house under contract, but not the lender purchasing the buyer’s house (If that makes any sense). Had one of the two agents involved in the other deal checked with the lender, they could have prevented that problem.
As a new agent, you do not have to know all of this. It is impossible for you to know how to check on everyone in the beginning, but that is what a really good broker is for. A good broker will teach agents how to take care of their clients and ensure a transaction goes smooth. That is why I suggest choosing a great broker over the best commission split.
How can real estate agents help with title company issues?
We have fewer problems with title companies, but once in a while we find a mistake. As a real estate agent you should know how to review the figures (the expenses and credits at closing that show how much a seller gets or a buyer needs) a title company gives to the buyer or seller. Title company figures can seem very confusing to real estate agents, so imagine how confusing they are to buyers or sellers! Most title companies will do a very good job of going over the figures, but the agent should go over them before closing. If you do not understand the figures, ask the title company to explain them to you. The worst feeling in the world is at the closing table when the title company asks the seller if their agent went over the figures and they say no, and then don’t understand them. We have seen mistakes from title companies that we fixed before closing because we looked at the figures. If we would have waited until the closing, it would have caused huge problems.
Real estate agents can also help sellers choose the best title company, help the buyers understand a title policy and much more.
When you work hard to make sure a deal closes on time, it will impress your clients. Even if they don’t know all of the work you did behind the scenes, they will be much happier than if there is a problem you could have prevented. The best way to make money as an agent is through referrals from friends, family, and past clients. Many agents do not even have to advertise once they are in business a few years because of how well they do their job. If you are the listing agent that doesn’t mean you just check up on the sellers’ side of the deal. You can also check with the buyers’ lender, and help with the appraisal because most likely their agent will not be going above and beyond.