The life of a self-employed real estate agent might just be the exhilarating venture you've been searching for. Embracing this role offers the freedom to set your own schedule, the satisfaction of watching your efforts directly impact your success, and the opportunity to help people find their dream homes. If you're considering taking the plunge into the realm of self-employment within the real estate industry, this blog post is here to give you a glimpse into what this journey entails:
Over the years I have seen agents work closely with family & friends. and one thing I have always seen is the level of loyalty towards the agent that provides them with repeat business. This is obviously because of their reliability and dedicated service. I have seen one family use the same agent repeatedly in regards to individuals deciding to retire abroad, buy land and building property back in their native country. This is testimony to a strong personal brand, your personal brand is your calling card in the real estate world. Create a unique brand identity that reflects your values, expertise and personality. This will obviously include the basics of designing a professional logo, crafting a compelling personal bio, and establishing a strong online presence through a well-designed website and active social media profiles. However, reputation and delivering promises is crucial as you are now relying on external facts such as : brokers, the market, conveyancing etc. Be responsive, knowledgeable, and attentive to your clients' needs and concerns. A strong reputation and word of mouth can steer you on the right trajectory.
Additionally a well-thought-out business plan is the roadmap to your success if being a real estate agent. You will need to outline your short-term and long-term goals, strategies for lead generation and marketing, budgeting, and projected income. A solid business plan helps you stay focused, make informed decisions, and measure your progress over time. This sounds great but a strong business plan cannot necessarily substitute for lack of inexperience if you are new to the industry. You will need to look at skills you possess such as self motivation or whether you have tech-savy mindset whilst gaining hands-on experience. A Linkedin article I came across explores what skills you can offer when having relative little to no experience(Can You Be a Self-Employed Estate Agent with No Experience? (linkedin.com).
Now most people who would like to get into the real estate industry and work for themselves are probably asking themselves "what qualifications will I need, will I need a realtor license or a professional qualification"? The good thing about the UK is you do not need to have a professional qualification in comparison to maybe the USA where specific states may require this (you can read about USA requirements in this blog post by Realtynya ). Although there are no mandatory qualifications it may be in your best interest to upskill yourself by taking courses provided by different institutions. Real estate laws and practices evolve, so staying up-to-date with continuing education is important. You will need to ensure that all your transactions comply with real estate laws and regulations in your area. You can look at coursres such as as The London School of Economics and Political Science (LSE) Real Estate Economics And Finance or if you click on the below image it will take you to a more introductory online real estate course.
A common misconception is becoming a new agent means your are on a solo journey which isn't necessarily true, as a new agent you'll need to work under a licensed real estate brokerage. Research and interview different brokerages to find one that aligns with your goals, values, and support needs. once you've chosen a brokerage you'll need to affiliate with them by signing a contract. This agreement outlines the terms of your association with the brokerage, including commission splits and fees. A good tip when working with a brokerage is take advantage of any training, mentoring, or workshops provided by your brokerage to harness your skills.
Now you would be required to generate your own leads, hence why as a newly established estate agent networking is crucial. You will need to start connecting with other professionals in the industry, attend local events, and join real estate associations. LinkedIn, Instagram, and Facebook to connect with potential clients and industry peers. Participate in real estate-related groups, share valuable content, and engage in conversations to expand your network. Consider hosting or participating in workshops or seminars related to real estate topics, such as home buying/selling tips, real estate investment strategies, or home staging. These events position you as an industry expert and allow you to connect with attendees. In the digital age, virtual networking events, webinars, and online conferences have become popular. These events offer the convenience of connecting with professionals from around the world without the need to travel. If you click the below images it will take you to different webinars that cover specific difficulties, solutions and aspects of being an agent.
Prospecting and Lead Generation may be disheartening at times and may not be the most exciting task but it is mandatory if you want to be successful. You will need to Identify potential clients by prospecting, which can involve door knocking, cold calling, online marketing, and more. You can use both traditional and digital methods to generate leads and build a client base. You will perhaps become an expert on your local real estate market or the industry you are targeting. Know property values, trends, and neighbourhood information.
Now we get to the money. Keep track of your income, expenses, and taxes; since you're self-employed you'll need to manage your finances responsibly. Self-employed individuals are responsible for paying their own taxes, including income tax and self-employment tax. Set aside a portion of your earnings in a designated account to cover your tax obligations. Consult with a tax professional to ensure you're complying with tax regulations and making appropriate estimated tax payments. Maintain accurate records of all your income and expenses. Consider using accounting software or apps to help streamline this process. Regularly review your financial statements to understand your financial health and identify areas for improvement. Propstream provides a breakdown on how to budget as a self employed real estate agent in regards to distributing your commision.
Now there maybe those considering a career in real estate thinking why should they go down the self employed route if they have the security of being an employed agent. So lets look at some differences.
**Employed Real Estate Agent:** 1. **Stable Income:** Employed agents typically receive a regular or basic salary or hourly wage, providing a steady income regardless of the number of transactions they close. 2. **Less Responsibility:** Employed agents often have less administrative and business-related responsibilities compared to self-employed agents.
3. **Training and Support:** Many brokerages provide training, mentorship, and resources to help employed agents develop their skills and succeed in the industry. Yes I did mention that this could also be done as a self employed agent but this employee training benefit may not be as accessible. 4. **Team Environment:** Employed agents might work as part of a team, collaborating with colleagues and sharing responsibilities for various tasks. 5. **Lower Overhead Costs:** Employed agents don't need to worry about the costs associated with running their own business, such as marketing expenses and office space. 6. **Less Autonomy:** Employed agents may have less control over their schedule and the clients they work with, as they often follow brokerage guidelines and assignments.
**Self-Employed Real Estate Agent:** 1. **Income Variability:** Self-employed agents' income can fluctuate based on the number and value of the deals they close. They have the potential for higher earnings but also face the risk of periods with no income. 2. **Business Ownership:** Self-employed agents are essentially running their own businesses. They handle administrative tasks, marketing, and other aspects of business management. These support personnel can handle tasks such as paperwork, data entry, appointment scheduling, and other administrative duties. Self-employed agents, on the other hand, are usually responsible for managing these tasks themselves, which can consume a significant amount of time. 3. **Flexibility:** Self-employed agents enjoy greater flexibility in setting their work hours and determining their own schedule. This can be advantageous for work-life balance. 4. **Entrepreneurial Spirit:** Self-employed agents need to be entrepreneurial and proactive in finding clients, building a network, and growing their business. 5. **Branding and Marketing:** Self-employed agents are responsible for developing their personal brand, creating marketing materials, and establishing an online presence to attract clients. 6. **Higher Earning Potential:** While the income can be inconsistent, successful self-employed agents can potentially earn more than their employed counterparts due to higher commissions on sales. 7. **Client Choice:** Self-employed agents have more control over the clients they choose to work with, allowing them to focus on specific market segments or niches. 8. **Tax Implications:** Self-employed agents must manage their own taxes, including setting aside money for taxes and understanding deductible business expenses. If you click on the picture below 99home further emphasise the advantages and challenges of being a self employed real estate agent. They also highlight the different business modes available to you.
Ultimately, the choice between being employed or self-employed as a real estate agent depends on your preferences, risk tolerance, and career goals. Some agents thrive in a structured environment with a steady income, while others enjoy the freedom and potential for higher earnings that come with being self-employed.
Now what's an AKERS WORLD blog post without a couple of book recommendations related to the topic. You can click the books below which look at the art of closing deals as opposed to being too "salesy", and how to manage the customer journey. "The modern consumer is more educated and has more choices than ever before. Counterintuitively, this has led to more confusion, doubt, and frustration in their real estate journey."
Embarking on the journey to become a self-employed real estate agent offers a world of opportunities, flexibility, and potential for financial success. By taking the reins of your career, you gain the freedom to set your own schedule, cultivate your unique brand, and steer your professional growth in the direction you envision. However, this path also demands determination, resilience, and continuous learning. As you navigate the intricacies of the real estate market and build relationships with clients, remember that success may not come overnight, but the rewards are well worth the effort.
The key lies in your ability to adapt to changing market trends, provide exceptional service, and harness the power of networking and marketing. So, whether you're a seasoned professional making the transition or someone entering the real estate world for the first time, becoming a self-employed real estate agent can be an enriching journey that opens doors to both personal and professional fulfillment. As you step into this realm of limitless potential, embrace the challenges, learn from every experience, and watch as your entrepreneurial spirit shapes a flourishing career in the dynamic world of real estate.