Working in real estate is a challenging career. It takes a lot of knowledge, planning and hard work to turn it into a successful one. As a new agent, you’re likely to make some mistakes while you learn the ropes.
However, it’s better to avoid making some mistakes if you can. Here are five common mistakes that real estate agents make and how you can avoid making them yourself.
1. Not having a business plan
Working in real estate may seem straightforward, but that’s no reason to forgo writing a business plan. A business plan is a written document that helps you think through your goals and how you will achieve them.
A well-written business plan includes information about many parts of your small business. Start with your goals as a real estate agent—for example, where to you hope to be professionally in 5 years? These should be specific and measurable, so you know if you have met them.
Your business plan should also include market and competitor research. These are the external factors that will impact how quickly you reach your goals. Finally, you will also want to think through a budget and marketing plan. These are the internal factors that impact your business’ success.
2. Neglecting business insurance
Real estate agents work closely with clients, providing valuable advice about the local housing market and community. This opens them up to liability risks and possible lawsuits. Professional Liability insurance can help protect your business against these types of claims.
A Professional Liability insurance policy (also known as Errors and Omissions or E&O insurance) is an essential policy that protects you and your company in case of a lawsuit due to alleged professional wrongdoing. This includes claims associated with mistakes, omissions, misrepresentation, breach of contract, and other related allegations.
While Professional Liability insurance is an important form of coverage for real estate agents, it may not be the only protection you consider. Depending on your business needs, you may also consider General Liability insurance or a Business Owner’s Policy to further protect you as a real estate agent.
3. Ignoring market trends
A great real estate agent should know the local market backwards and forwards. Clients rely on your expertise to buy and sell property at the best prices. They also trust you to find them the right home that ticks every item on their must-have list.
Real estate agents need to know the financial forecast for their local area. This helps them appropriately price the homes they are selling and guide buyers as they make an offer to buy. However, money isn’t the only trend you should be on top of.
Buyers also want to know about the surrounding neighborhood. You should be well versed in the makeup of the community—nearby schools, parks, public transport options, businesses and other things that make the area unique. If you don’t have in depth knowledge of the neighborhood, clients will find another agent who does.
4. Losing your license
There are two licenses that real estate agents need: a real estate license and a driver’s license. Both are essential to performing the job. Losing either—or both—would likely impact your ability to work and negatively impact your income.
A real estate agent could lose their license if they violate state compliance rules, commit a severe felony, or fail to properly renew their current license. As long as you operate above board and follow the requirements set by your State Regulatory Board, you should be able to maintain an active real estate license.
Equally important is keeping your driver’s license. Real estate agents spend a lot of time driving themselves and clients to and from properties. Maintaining a safe driving record both on and off the job can help you avoid losing your driver’s license.
5. Forgetting to save money
Real estate agents don’t receive a typical set salary or hourly wage. Your paycheck comes each time you sell a property or close a deal. This means that you need to plan for economic downturns.
The real estate market tends to fluctuate. One year you may do extremely well, but struggle to sell properties the next. These ups and downs often mean that your salary will also fluctuate.
Having both business and personal savings to get you through the lean times is crucial. Creating and sticking to a budget can help you better weather a poor economy until the market turns back around.
Learn from others’ mistakes
Real estate is a potentially lucrative career choice if you have the right attitude and drive to succeed. Finding a more seasoned agent to take you under their wing could be a great way to learn on the job. They may be able to share their own setbacks and mistakes, so you can learn even more from their experience.
Are you ready to protect your career as a real estate agent with business insurance? BizInsure can help you find Professional Liability and other forms of insurance to suit real estate agents. Visit our website to get started.