When I first got into the real estate business, it took me the better part of half a year to build a head of steam sufficient to cover my expenses. I had funds to weather that initial period of self-employment (new agents, you should have at least six months of savings – enough to pay bills and live confidently within your means; in the current slowing national market, you are better advised to have even more). As my business transitioned to stability, I was able to avoid fostering a starvation mentality. One thing many new agents are not taught clearly is the reality of start-up and ancillary expenses, everything from education and licensing to marketing, signs, business cards, ads, gas, office supplies, desk and/or split fees, etc., all of which can amount to thousands of dollars. And when it’s going out, but not coming in, stress is inevitable, panic may set in.
Intellectually, I understood and still do that being self-employed means I run my own business for which there is always an opportunity cost. For instance, if I were to open a bakery, I’d have to find the space, buy or lease the equipment, advertise, hire employees, etc. Though we agents (and I am not talking about salaried agents here) do not necessarily possess a storefront, we are, in effect, opening our store. New agents often times transition from full-time, paid positions. Flush with the excitement and freedom of sole proprietorship, we stand stunned as the bills begin to mount. Furthermore, and as I’ve stated repeatedly, this is an industry where standard of care is an equal opportunity benchmark. Whether you are new or seasoned, you’re responsibilities and legal obligations are the same. So, if the decisions you are making as a new agent amount to keeping yourself and your family from going on food stamps, there’s a good possibility you are not placing the clients’ interests first and thus compromising your fiduciary duties.
Let’s say you are six months into your new career and have not made a sale. Perhaps your savings are gone and debt is mounting. Odds are your significant other is beginning to raise an eyebrow and broker is applying more pressure for you to perform. What do you do? First thing, don’t panic. If you’re being well mentored and are following those robust systems which time and experience confirm work, things will pop and you’ll get the all-important first client. What you must not lose sight of at all costs is your responsibility, both to the client and yourself. If the counsel you provide and decisions you’re making are the product of starvation thinking, then you put your business, license and relationship with your client at risk.
Furthermore, watch out for prospective clients who are not ready, willing and able to proceed. It happens to many fresh licensees. You rush out for that crucial property showing only to discover the “client” is working with another agent, is not pre-approved or perhaps just a neighbor curious about the house. The onus is on you, the agent, to qualify the client. Ask the right questions. Make it a business practice to inform customers that you do not provide your services other than exclusively. You have a right to earn a living. Don’t spend your valuable time with people who are not in a position or willing to help you be successful. Conversely, operate from the belief that, if you take care of your client’s needs, the commission will take care of itself.