Expensive Mistakes & 3 Tips to Avoid Them
Ask any seasoned agent & they can tell you about the money they have wasted in their business. All too often in early stages of a real estate career, that stage where momentum & cashflow (& confidence) can be elusive & it's all about needing more leads, that is the most vulnerable stage (yet not the only stage) where expensive mistakes seem to materialize. Careful about throwing money at your business, especially if you have not exhausted the free & organic. Let's review.
Most common expensive mistakes
Let's review some of the most common expensive mistakes. Each of these can succeed at a high level ... it's just that so often, the ROI does not justify the expense. Spending money should be a well-thought-out strategic business decision & each dollar should be held accountable for a 2X, 3X, 5X, 10X return. Here are some of the most common expensive mistakes:
This can fall into many sub categories - luxury, printing, magazines, ads, redesigning your logo or business card too many times - and each of them may work, and each of them can land heavy on your credit card. The thing is, they may not be necessary, especially if you have not yet picked the low-lying fruit client opportunities yet in your business. I say free first, fancy later ... unless you're luxury and the marketing step-up is necessary. Be careful with that impression of necessary ... talk to enough people to flush out whether necessary is fact or fiction.
Farming can be expensive. You want to mail postcards & flyers to a certain neighborhood, seems like it is something you should do & just one listing would pay for the cost of the entire program. You're not wrong here on that one listing for the ROI home run, it's just that so many agents make poor decisions on where to farm, what the budget is, how many months / years you are committing to the effort, other layers of work & presence you can layer on top of it, or starting off with too many doors & then not continuing the effort. The most common mistakes with farming fall into too many doors, not strategically analyzing or scrubbing your list, and not committing to the effort long-term.
Online leads, there are plenty of opportunities to buy a zip code or buy leads with a large referral fee, but I recommend you read 10 articles on the topic before embarking. Online leads tend to be low quality & low conversion ... so you have to be able to handle the no's & ghosting, you have to be able to treat it like a numbers game, and you have to quickly develop your phone & script skills to be effective with these folks over the phone. If this is what it takes for you to line up your first 5 clients, then go for it but spend some time studying the best practices for how to make this work for you. And then as soon as you start getting leads & momentum from sphere & referrals, then most agents turn off this buy leads expense.
You are in the business of having conversations with people about real estate.
3 tips to avoid loading up your credit card
You have $100,000 in your phone right now! If you have not yet had a serious real estate conversation with everyone in your phone, then I would start there. It is, and always will be, the lowest lying fruit in your business ... the people you already know. Unlike buying leads or random online leads, these people already know & care about you, you have rapport in the bag. Treat your phone like the gold that it is & get out there assertively & unapologetically promoting your services & bring value to the people you already know. You are in the business of having conversations with people about real estate ... your fastest route to your next paycheck will always be the people you already know.
Free first! Absolutely exhaust every single free thing out there before you spend a dime. Open houses, door knocking, talking to people in your favorite bar, attending all neighborhood events, making 100 calls about property tax appraisals. Does everyone at church know you're in real estate? How about your neighbors? Do you wear a real estate shirt or name tag everywhere you go?
Earn first! Get your credit card on a super low fat, low carb diet effective immediately! Any time you are tempted to spend (or invest) money in your business, then go back to #1 & #2.