First-Time Real Estate Agent Training

Just because you have a license, doesn’t mean you have a business. There are several skills that real estate agents must learn and know how to do before they can become a top producing real estate agent that the real estate exam prep does not teach you. Regardless of what market you intend to sell in, here are the essential skills you must have in your toolbox. 

First Time Real Estate Agent Training Skill #1: Prospecting

Many people who decide they want to sell real estate commonly misunderstand where their business will come from. You must actually know someone who wants to buy or sell a home to close a transaction. Sounds easy, but it’s actually one of the hardest skills to craft as a real estate agent. Before you quit your job, you will need to have an entire pipeline of folks that are ready to act in the first 12 months of your business launch. 

• Create a list of people you know today that may buy a house soon. 
• Learn the art of small talk. You will lean on your ability to engage strangers in circumstances like open houses or client intake meetings. 
• You will want to create social media posts that spark a new conversation, and look to have a new conversation with at least 10 people every day. 
• Most successful real estate agents engage potential buyers and sellers by phone. While it’s true, many real estate coaches teach to cold call, a highly referred agent will use the phone to keep in connection with their sphere. 
• Choose the mindset of a small business owner, and engage other small businesses in your community. When you refer to them, they may refer to you.
• Cultivate deep relationships with vendors (like roofers, home inspectors, plumbers, etc) and become their choice for referrals of their friends and family. 
• Identify a geographic area to “farm”. 

First Time Real Estate Agent Training Skill #2: Marketing Knowledge

Now that you have a small business mindset, you will need to sharpen your marketing skills. Marketing your business is a long game approach. Because you do not offer a service that has a deadline, it can be difficult to motivate sellers and buyers to contact you. Therefore, you must learn and understand the difference between marketing and branding. Here are a few things to consider:

• Designing your brand can be a steep hill. Creating a logo in Canva could be a nice way to start. Not unlike painting a house, you’ll want to choose complementary colors and use them often in all of your branding materials, like flyers, social media posts, etc. 

• You’ll want to learn and take courses on how to create a marketing campaign for a listing. The most successful agents always get professional photography. Your presentation of your listing marketing is a reflection to your future client on what you’re capable of. 
• Learn about “third party proof” concepts and setting up a system for your reviews.
• Learn and engage marketing around “evidence of success”, which is to demonstrate to a viable audience that you have in fact helped someone buy or sell a home. 
• Understand the marketing concepts around “product and service life cycles”. 
• Define a clear target market for your marketing. 

First Time Real Estate Agent Training Skill #3: Contracts/Addendums

The first thing any new real estate agent should do is read your sale agreement contract. Your client is looking to you to understand and execute what is drafted there. You will also want to understand the following:

• How to write a repair addendum.
• How to write an appraisal letter and what to add to the appraisal package.
• How to read and implement market trends and statistics.
• What MOI and DOM is and how to advise your client based on it.
• Learn exactly what your role is, and when you should be referring to others. For example, real estate agents cannot give legal advice, nor can they advise on financial elements of a client. 
• Learn and implement that Realtor® Code of Ethics.

First Time Real Estate Training Agent Skill #4: Money Management

Wealth is not about how much you make, it’s about how much you keep. Learning the proper flow of money through your small business is essential to your future success. More than 80% of real estate agents fail in the first year according to the National Association of Realtors because they cannot afford to stay in business. Here are come concepts you must know to run a successful and profitable business:

• Basic bookkeeping. 
• Open and maintain a bank account.
• Open and pay off a credit card dedicated to your business only
• Learn how to pay quarterly taxes if you are a 1099 contractor, which most real estate agents are. For the average real estate agent, you will pay over 30% of your commission to the IRS. 
• Develop an understanding of how much it costs you to be in business. (Do the math on the cost of splits, brokerage caps and the cost of generating leads before you agree to them.)
• DO NOT spend your ENTIRE first commission check. Enact the ⅓ rule. One third goes to the IRS (so save it), one third goes to the brokerage and marketing for future business (so save it), and one third hopefully pays your bills.
• Learn the difference between LLCs, Sole Proprietorship and S-Corp from a qualified CPA.
• Learn and implement executing profit and loss statements each month. 
• Save for the future. Markets change all the time. Sometimes real estate agents close a lot of transactions, and sometimes they don’t. Make sure your business saves for a rainy day.

First Time Real Estate Agent Training Skill #5: Understanding Supply and Demand

Answering your client, friends and family’s question of “how’s the market?” relies on your knowledge about the concept of supply and demand. While national news outlets report past data, your client expects you to have a pulse on what may be coming. While it is ill-advised to attempt to predict the future, experienced agents regularly review supply and demand markers and data to have an idea of what is coming. You can read more about supply and demand here. 

First Time Real Estate Agent Training Skill #6: Basic Economics and the Flow of Money

Being a real estate agent is not just about selling pretty homes, or searching for a house that meets a buyer’s criteria. Real estate agents are business professionals who are students of the real estate market. To have a full picture, real estate agents need to stay versed on the following:

• The Federal Reserve’s role and how its policies impact home sales. (of note, the Federal Reserve is non-partisan.) 
• The bond market and how it influences mortgage rates.
• Marco and Micro policy influences on the housing market. For example, understanding global issues and local zonal change. 
• Learn about Freddie Mac and Fannie Mae.
• Be familiar with the types of mortgage your client could qualify for. Example loan types like FHA, VA, Conventional, etc.

First Time Real Estate Agent Training Skill #7: Raising Capital for Your Business Launch

Starting any new business requires capital launch costs. The average real estate agent will not close a transaction in the first 9 months in business. The majority of your efforts will go towards building your branding, marketing, and prospecting. You will need a chunk of money to start your business. Have at least 12-18 months of your monthly expenses SAVED in an account before you launch your real estate business. Be wary of predatory businesses that offer you commissions up front before you close a transaction. An indebted business is not a thriving business.

First Time Real Estate Training Skill #8: Read and Digest Reports

While it’s great to have an idea of national news and reports, most real estate agents focus on local data. What happens in Florida, will have no impact on Nevada. Create a habit of checking reports every month. 

• Create and read a CMA – Competitive Market Analysis
• Local Market Trends in your MLS
• RPR Neighborhood Reports on where you’re farming and look for trends or changes in habits or psychographics. 
• Review any school district or boundaries changes.
• Track the CoreLogic Case-Shiller Index for your region. 

First Time Real Estate Agent Training Skill #9: Administrative Skills

An organized business is a successful business. You will want to have an understanding, policy and process of each of these:

• CRM – Customer Relationship Management
• Daily tasks list
• Daily call list
• Appointment setting management
• Calendar management
• Supporting marketing materials like a buyer’s guide or a listing appointment pack
• Email management

First Time Real Estate Agent Training Skill #10: Business Planning

Before you start in real estate, have a plan. Here are some things to think about going in:

• Deciding how you’re going to hang your license. Understand that there are several ways to enter the business. You can work on a team, which often comes with team splits and brokerage splits. You can work for yourself and hang your license with a brokerage, which comes with brokerage splits and caps. You can join a Mega Team or a “profit sharing” brokerage that has down lines. Be sure to understand the model types, as they are not all created equal or benefit you.
• Decide on a launch budget.
• Create a goal for how much business you need to close to hit break even numbers. (The cost for you to do business and pay bills)
• Create a marketing calendar and execution plan.
• Review opportunities for new business.
• Write a hot, warm and cold list of prospects.
• Create a plan on how you can be self-motivated or if you need to have an accountability partner in your brokerage. 

MythBusters and Predatory Behavior

Here are 4 myths and predatory issues new real estate agents need to know going in:

1. Brokerages. Mega Teams (Large teams under a big brokerage) and Teams are desperate to recruit you. They practice scripts to make it seem like they are doing you a favor by hiring you. However, many business models rely on the number of agents that pay them fees whether you close a transaction or not. Choose wisely, as you hold more power than they do.
2. To be profitable, you must produce your own leads. Many brokerages and teams will tell you they will give you business. However, to do that, many buy “leads” from lead generating companies. Be wary of this practice. It is extremely difficult to break even on the cost of this style of business creation. 
3. Coaching and Training programs. A real estate agent must keep up with CE hours to renew their license. The difference between mandatory hours and having a mindset to always be learning are very different. A successful real estate agent is always sharpening their skills in every area of the business. When joining a coaching program, be sure to read the fine print in the contract. Many coaches have predatory cancellation clauses you will want to be aware of before you commit. Many programs are mostly about accountability, which you could get for free inside your brokerage by asking another agent to partner with you. 
4. The words “mentor” and “sponsor” are frequently used in recruiting methods of new agents. Ask a lot of questions about what these roles represent, and what they receive in return if they recruit you. Often, what you may define as a mentor or sponsor, may not align with the counsel you might actually receive. 

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Author: OTA Staff