The Importance of Newbie Agents Starting Off With an Established and Top Producing Team/Mentor in Real Estate

There are many newbie agents who aren't sure where or how to start their real estate careers once they obtain their license. Some agents get their license hung at established multi-national real estate brokerages that have reputations for recruiting anyone with a license and a pulse such as Keller Williams, Coldwell Banker, and Sotheby's while other agents join more boutique and tight-knit agencies such as Los Angeles based Teles, REDD LA, and Bulldog Realty. 

Speaking from experience, whether you decide to join a multi-national brokerage or a local boutique brokerage, I believe that it is imperative that a newbie agent finds either a top producing mentor or team within your brokerage to work for. 

Here are my reasons why.

1.) The Real Estate Industry is Extremely Competitive

A lot of people who have not worked in Real Estate contain the misconstrued perception that once they receive their Real Estate license that they will become rich in the near future. In reality, this perception is flawed. What majority of the new real estate agents fail to interpret and consider is the fact that Real Estate is one of the most competitive industries in existence.

As stated by the Department of Real Estate (DRE), California has over 406,000 licensed real estate agents/brokers. These agents have to create their own innovative marketing strategies to enhance their candidacy and compete against other fellow agents to obtain listings. With roughly 12,800,000 households in California that list at an average rate of 7+ years, competition to earn these listings becomes incredibly brutal.

If a newbie agent is going at this alone, they are entering an environment of insane competition in which they will most likely drown in. By joining a team or finding a high quality real estate mentor, that agent would learn the tricks of the trade to successfully pick up listings and become more competitive in the real estate marketplace. 

2.) The Nature of Commission 

In Real Estate, all of the money that you would be making would be in commission. That means that you could work 40 hours a week for a full year and if you don't convert a listing into a closed escrow, you will have made $0 that year. 

Another reality of commission is that every agent is for the most part paid the same commission structure. Typically in real estate, agents are paid 4-6%, the industry standard being 5%, which is split between the listing agent and the buying agent. Whether you are a newbie agent or Fredrik Eklund, all agents would make roughly the same amount of money from a successfully closed real estate transaction. This makes it incredibly hard for newbie agents to pickup listings as they would in most cases be competing against seasoned agents with 10+ years in the real estate industry to obtain listings. 

Due to the structure of commission based income, many newbie agents who have not joined an established real estate team or found a high quality real estate mentor to guide them through their budding years have earned little to no money their first year. As stated by the DRE, the median income for a 1st year real estate agent is $20,000, in which many of those 1st year agents went at breaking into the real estate industry alone. In most cases, this statistic has deterred many individuals from pursuing or sticking with their real estate career.

For the above reasons, newbie real estate agents may struggle horrendously with commission based income. If that newbie agent were to join an experienced real estate team, they would most likely be exposed to more real estate transactions and may even be trickled down some buyer/seller leads of their own. This alone would generate a healthy income for a newbie agent to be able to get adjusted to the life of a real estate agent, boost their confidence as a real estate agent, and allow them to learn additional tricks of the trade from their team that they would have possibly failed to learn of if they weren't associated with their team. 

3.) Building a Brand is Difficult, Expensive, and Time Consuming

When you are working in a competitive industry, you need to develop solid brand recognition amongst your marketplace. In fact, many experienced real estate agents have niche markets where they specialize in a particular neighborhood, price bracket, etc.

When a newbie agent starts to solicit real estate business, they typically just try to acquire leads anywhere they can rather than become neighborhood specialists and build their brand. In order to successfully generate listings and buyer leads, you need to be able to effectively market yourself as a neighborhood specialist. This can be nearly impossible for a newbie agent since they don't have previous transactional real estate experience to promote to their prospective clients. 

In addition to the lack of transactional real estate experience, building a brand for yourself is incredibly time consuming and expensive. In order to successfully develop your brand recognition and presence you need to be able to invest into your digital presence (websites, social media, email campaigns, etc.), your physical presence (attending social events, physical advertisements, wardrobe, etc.) and your communication/lead generation strategies (staying updated with prospective clients, social selling, etc.). This may be overwhelming, difficult, and expensive for a newbie agent on the block.

By joining an established real estate team, a lot of the framework for brand recognition has already been executed and developed. Additionally, that newbie agent can use the brand recognition of their team to further their own credibility and possibly generate business out of it. 

4.) Mentorship, Coaching & Guidance are Critical to Success

One of the most important components to successful results is having the right guidance. Many newbie agents have this mentality that they can become successful in the real estate industry if they work long hours, study their marketplace, and invest heavily in marketing collateral but in reality this is not the case.

From what I have observed, majority of the most successful real estate agents today have or currently work with some form of a real estate mentor or coach. Notable Los Angeles power agents such as Santiago Arana, Kofi Nartey, and Josh Altman have worked with real estate coaches such as Steve Schull and Tom Ferry to boost their self-confidence, keep them honest with their target goals, and to provide recommendations as to how they could sell better. In fact, there are a significant amount of resources that state that agents who work with a coach or mentor generate more money in gross commission than agents who do not work with a coach. 

To elaborate more on this concept, think of the ATP. Every single tennis player in the top 10 works with a coach who keeps them honest with their target goals of winning tennis championships and climbing the ATP rankings. No matter how experienced you may be at your profession, there is always room for improvement and learning. By having an experienced coach or mentor by your side, you are only improving your capabilities and creating a clearer avenue for successful results. 

Conclusion

Without question, being a real estate agent/broker is one of the most lucrative professions in existence if done correctly. In order for a newbie agent to maximize their potential as a real estate professional, it is imperative that they join an established team and work with a quality real estate mentor/coach. By doing your research on established real estate teams in your target neighborhood, you may be able to join a team that could propel your real estate career tenfold. 

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