Newer agents sometimes come to real estate with the wrong expectations, or with little understanding of things like contracts and negotiation. Here's how the pros suggest avoiding those mistakes
This April, one of Inman’s most popular recurring theme months returns: Back to Basics. All month, real estate professionals from across the country share what’s working for them, how they’ve evolved their systems and tools, and where they’re investing personally and professionally to drive growth in 2022. It’s always smart to go Back to Basics with Inman.
New York City Compass agent Kimberly Jay knew a young man who recently decided to throw his hat in the ring and become a new real estate agent. The man was “a really nice guy,” Jay told Inman, but struggled to get his foothold in the housing business. Ultimately, he washed out.
“He did it for a year and a half, and he just couldn’t make a living,” Jay recalled. “He said he didn’t realize it was so much work.”
The episode highlights the challenges of surviving in a cutthroat and competitive industry. But it also gets at the fact that many people come into real estate with misconceptions about how it works, or the wrong assumptions about how to succeed. And misconceptions lead to errors.
To better understand what types of errors less experienced agents are commonly making right now — as well as how to fix them — Inman reached out to several experienced industry pros. The takeaway from these conversations is that mistakes are common. But also that with time, hard work and self-reflection it’s possible to improve. Here’s what you need to know:
Mistake: Expecting glamour
Recent years have seen massive changes in real estate, and chief among them is the rising star of agents in popular culture. Thanks to the proliferation of first cable TV and later streaming services, there has been a renaissance of real estate-focused reality TV shows.
The downside of this development is that some newer agents have been “snookered by the TV shows into believing that the industry is something that it isn’t,” Frederick Warburg Peters, president of Coldwell Banker Warburg, told Inman. In other words, Peters explained, younger agents have been misled into thinking that if “you work out a lot and have a few good suits then you can probably make a million bucks.”
There are certainly many millionaire real estate agents, but Peters said the day-to-day reality is much less glamorous.
“Star agents very often have three years in which they’re barely getting by,” he noted. “And, you know, for an agent to really hit his or her stride, it can take five years.”
Jay agreed with this point, and speculated that it may be a common issue because some many people have flocked to real estate as a first career in recent years. Historically, she continued, real estate was a “second or third or fourth career.” But that’s less so the case today.
“I think that there are a lot of people who have started in the industry today where this is a first career and they have not built up a skill set,” she said.
So what’s the solution?
In the most basic sense, time and hard work are really the only ways to overcome misconceptions about what a real estate career entails. But Jay also advised people to work on becoming good listeners and to really try to understand what their clients are looking for.
“Keep your mouth shut,” she recommended. “Really listen and try to have empathy. It’s never about you, it’s always about them.”
Mistake: Inattention to contracts and protocol
Tiffany McQuaid, founder of McQuaid and Company in Naples, Florida, recalled to Inman a recent home that went up for sale in her market for $1.8 million. A buyer for the property quickly became highly interested, but turned to a friend who was a relatively inexperienced agent. And that agent made multiple errors when submitting the contract.
“They really, really wanted the property,” McQuaid recalled of the would-be buyer. “But then the offer comes in with the paperwork missing. The numbers were wrong. The deposit was wrong. They put down a deposit of $5,000 on a $1.8 million property.”
Contracts are hard and filled with legally dense language. But if you’re an agent, that’s the job. And McQuaid said that the result of submitting an amateurish offer was that the agent in the deal wasn’t conveying to the seller how much the buyers actually wanted the house.
“The way that it came over, it didn’t represent the buyers as being serious or in having serious interest in the property,” McQuaid said. “It came off as them throwing their hat in the ring.”
The incident highlights how agents’ errors don’t just hamstring their own careers, but also result in clients losing out on properties.
McQuaid said she has seen this kind of in attention to contractual details and protocol frequently. Agents commonly post photos that don’t follow the rules, they publish text filled with typos, they let listings go live without photos, or they don’t use professional looking photography.
The list of specific errors could go on, but the point is that some newer agents lack knowledge about both the written rules of the industry, as well as of the unwritten etiquette — for example what kind of deposit makes you look serious.
In the case of the $1.8 million home, though, the story has a happy ending: The buyer won the property after taking some advice from the seller’s agent on how to write a better contract. And that hints at a more general solution: Learn from peers and those who are experienced.
Mistake: Misrepresenting yourself
McQuaid also said that she has seen some agents who act like they have something to prove. During negotiations, she’s seen newer agents “get very intense, or start to challenge the other agent. They’ll start raising their voice.”
“In their inexperience, they think that this shows experience,” she said. “But it does totally the opposite.”
Jay has also seen agents who try to portray themselves as more experienced than they are. They’ll make up information if they don’t know an answer to a client’s question in an effort to seem more knowledgable than they are. But when the misrepresentation comes out, they look bad.
“You’re a professional, you need to conduct yourself in a professional manner,” she said. “Your better off saying I don’t know, I’ll get back to you.”
The point is that there’s nothing wrong with being a newer agent, not having all the answers or being pleasant during negotiations. McQuaid specifically advised agents to let their counterpart on the other side of a deal know if they’re new, or if real estate isn’t their main gig. The point, she said, is that being vulnerable will lead to better results than pretending to be someone else.
“Lean on the other Realtor and be forthright,” McQuaid advised. “Say, ‘please guide me, I want to do the best job that I can for my friend or customer.'”
Erin McCormick, an agent and vice president of operations at Livian, similarly advised agents to seek feedback from those they work with.
“The agent should be asking the listing agent for information on what could have made the offer stronger — and then pass that information directly on to the buyer for future offers,” she told Inman.
Mistake: Not helping consumers understand the market
Many of the industry pros who spoke to Inman said that one common error newer agents make is that they don’t fully understand the market themselves. And that’s an error that requires time and footwork to overcome.
But McCormick added that this issue can also trickle down further, with agents not fully educating their clients on what the market looks like.
“Clients don’t know what answers to ask, but it is our job to educate,” McCormick said. “Use data to tell a story. Use anecdotes. When explaining an appraisal bridge, have your local data — such as 60% of homes aren’t appraising right now) — to showcase the why behind its importance.”
McCormick specifically noted that some consumers may never have heard of an escalation clause, or an appraisal bridge. Thanks to extremely low inventory and rising rates, the market is also in a weirder place than at any other moment in recent memory, though many consumers may not fully grasp how much things have changed. By educating consumers on the lay of the land, they will be more happy and agents will have to write fewer offers that ultimately fail.