Making your first million dollars in real estate might feel like a dream. But taking the steps towards achieving it takes much more than long hours and hard work. You need to have the skills and broaden your understanding of many other disciplines other than real estate to make it happen.
Becoming a millionaire real estate agent goes beyond simply working hard. It involves starting your business, highlighting your unique value proposition, and scaling exponentially to achieve success in real estate. It is up to you to hit your goals to become a millionaire.
If daily habits lead to yearly results, the core of success boils down to the steps you take every day towards a million-dollar payout. Read on if you are interested in learning more about building your business and bringing your real estate game to the next level.
The Average Real Estate Agent
Getting into the real estate business might be easy. It takes a course to learn and a licensing exam to pass. But becoming successful is tough, especially in such a competitive industry. The median gross income of REALTORS in the National Association of Realtors was approximately $49,700 in 2019, which is a small increase from $41,800 back in 2018.
The take-home salary is significantly lower than what you would hope to make as a millionaire real estate agent. You could always work more than 20 years to hit that million-dollar mark, but that is if you do not have any bills to pay for.
Plus, only 2% of realtors make more than $250,000 a year. If you are just starting your real estate career, you might as well face reality regarding your take-home pay. It most likely will not amount to much.
But it is safe to assume that you are aspiring to be in the upper-income bracket and shoot even higher to be in that 0.01% bracket of real estate agents. It won’t happen overnight, and it will take time for you to get there. There are some steps you can take and work towards this goal that separates the successful real estate agents from the rest of the competition. These steps are the following:
- Become a listing agent.
- Lead Generation.
- Develop a lead generation model.
- Build a database.
- Know your economic model.
- Set a budget.
- Create an organization model.
- Hire leverage when needed.
- Establish a schedule.
- Document your systems and procedures.
- Become crystal clear about your big why.
While the more successful realtors tend to have more experience in the real estate industry, high earners are more likely to be using some, if not all, of the steps listed to expand their reach and market their brand.
It is never too late to expand your understanding of different disciplines, such as marketing and advertising, to help you attract potential sellers and buyers in real estate. Apply all your new skills and experiences to your real estate business, and you will reap the rewards.
Become a Listing Agent
Listings are one of the best ways to earn money in the real estate business. Being in the listings business gets more business in real estate because properly marketing one listing can generate leads to produce a buyer.
Concentrate on listings as it provides a platform for lead generation, whether it is through mail, advertisements, signage, or open houses. Being a listing agent will only help you reach your goal.
Gary Keller, the founder of Keller Williams, once said, “No leads means no sales.”
As one of the most influential people in real estate and the founder of Keller Williams, the largest real estate firm in the world by the amount of closed sales, property units sold, and agent count, he knows what he is talking about.
Gary Keller also wrote The Millionaire Real Estate Agent and offers great real estate advice for those who want to become a millionaire. Leads must be considered a core focus of your business. It does not matter how successful you become.
Lead generation and prospecting is the most important aspect of any agent’s real estate business. Agents that make more than six figures spend approximately ten times more on marketing campaigns and efforts than agents that make less than they do.
These agents are also more likely to have an active online blog about real estate in order to educate and attract prospective buyers and sellers. They are also more likely to use YouTube to broadcast video walkthroughs of their property listings and discuss trends they see in real estate.
They have established social media accounts with some following and are constantly posting their successes. These agents are making an effort to connect with their audience daily.
The whole point of this is for lead generation. Lead generation is known as the process of attracting prospects and getting them on the journey to convert into a client eventually. Using various promotional marketing channels such as social media, a blog, or email newsletters helps successful agents to get visitors to become leads eventually.
Develop a Lead Generation Model
Developing a lead generation model helps you answer a couple of questions, these being:
- Who are my clients?
- What do they want?
- What is bringing them to my real estate business?
From these questions, you will be able to get a sense of who you should target to get more leads that broaden your audience.
Your lead generation model or lead generation strategy needs to be more than simply obtaining leads. It is all about developing the lead into an actual client. This requires you to present a consistent message through the entire process and on all the marketing touchpoints you provide.
Your goal is to provide value for every prospect that engages with your lead generation strategy because they might always convert at a later time.
Most importantly, you need to develop a strategy that you can follow. To start planning your lead generation program, consider creating a plan of reaching out and establishing relationships with all your prospect leads. You can do this by using a variety of touchpoints, whether it be by mail, phone, or text.
You should also tie in social media as a lead generation tool. According to a report from the National Association of REALTORS’®, members found that the highest quality of real estate leads came from social media at about 47%. But the same report states that only approximately 76% of female REALTORS® and approximately 73% of male REALTORS® use social media for professional use.
There is a significant chunk of real estate agents that do not utilize social media for their business or as a lead generation tool. They are missing out, and you can capitalize on this area.
Build a Database
Now that you have a lead generation plan, you need a database of people to keep track of. It will mostly consist of your leads and clients. Your database needs to have the names and contact details of all the contacts you want to nurture relationships with, along with any information you discussed with contacts.
You need to grow your database and feed it every day because it directly contributes to your real estate business. Gary Keller said it best, “The size of your real estate business will be in direct proportion to the size and quality of your database.”
Besides lead generation campaigns, a great way to increase your database is by asking for referrals. By asking for referrals, you will most likely be able to receive a name and contact information. Or even better, an introduction directly to the prospect.
If you reach out and the referral is not interested, you can always keep their contact information in your database for later. By consistently touching them with content, you can ensure that your business is at the forefront of their minds. With enough time, you can cultivate a relationship so you can be there when they are ready to buy or sell.
Know Your Economic Model
In general, the economic model is a formula that shows how your performance and investments in your business work together to produce your net income. It outlines a connection between the net income goal you want and the activities you will need to do to get to that number. Basically, it is how you and your real estate business will work to make money.
Without appointments, you will probably not make any money whatsoever. But you need leads to get appointments. This is why Gary Keller mentions leads as the most important aspect in your real estate business, “Leads are the fuel to your economic engine.”
You need to focus on turning these leads into appointments, convert these appointments into listings (buyer or seller), and then successfully work with the client to help them close on a deal.
This chain drives your net income because the number of leads or appointments you have does not matter if you cannot get them to convert into listings. Even if you take on many listings, if they never close as an actual transaction, then you will never become a millionaire real estate agent.
Be in a good position to secure a client because most clients interview only one or two real estate agents before deciding one to work with. Set up appointments with people ready to proceed with a decision, whether it be to buy or sell. You should also provide a pre-listing package or presentation to share for your consultation appointment.
Set a Budget
It is crucial to set a budget and implement it early on in your business. Plan it annually, review it regularly, and just stick to it. If the economic model in the previous section helps you understand where the money is flowing in, the budget explains what happens to all the money. The budget will show areas where you should focus on investing in to maximize your gains.
Most likely, the biggest two items that eat the most of your budget will be your expenses to operate your business and lead generation at approximately 78% of budget consumption. Necessary expenses, but tough to see a notable difference in gross revenue and your net income.
While agents who make more than six figures spend six times more money on technology, it might seem that real estate agents that spend more tend to earn more money. But this approach is not a guarantee that you will see enough of a return on the investment, so spend what you earn. Be accountable for every dollar and make sure every penny is generating results for your business.
Constantly reassess and question each new expense rather than impulsively splurging. Consider hiring a financial consultant or CPA to review your spending and keep you accountable.
Create an Organizational Model
Creating an organizational model shows how you can grow your real estate business by hiring talented people to handle other duties. These can include an administrative assistant or building out an administrative staff. Hiring before you actually need it is a waste of money and will slow the growth of your business.
Hire Leverage When Needed
It is important to realize that sometimes you can’t do things alone as there is more business than you can handle. Just as you invest in marketing, it is important to invest in the right person to grow your business. After hiring talent, you will be able to focus on the aspects that matter most, like lead generation, and have the admins do the rest.
Talented administrative staff will be able to increase your sales volume exponentially while giving you enough time to focus on your lead-generation efforts. Gary Keller said, “Hiring a truly talented person can take your business further than an entire busload of less talented ones.” Talent will execute what you need them to do and create opportunities for you to work on what you do best.
You might want to hire more staff, such as a coordinator, marketing manager, or any other administrative or client management talent for more leverage. As your business grows, your goal might potentially be to lead a team of talented salespeople or become the CEO.
Establish a Schedule
It is crucial to establish a schedule and stick to it. One of the great benefits of being a real estate agent is that you have the freedom to work at any time you want. Without discipline, an entire workday can slip by without any leads to show for it. The ability to plan ahead with a schedule and stay with it to make it a routine helps you stay on track to achieve your goals.
A schedule is especially helpful if you have a lot of administrative staff. Your workday can fill up quickly, especially as you continuously train and expand your business. But keep delegating duties and commit to blocking out time in your workday to prospect and follow up with leads.
Document All of Your Systems and Procedures
You need systems and processes in place that support your business. By documenting all your systems and procedures, you can constantly review the steps you take and adjust as needed. If you need outside help, a consultant can come in and review your systems to assist you with your business.
These systems and procedures are the foundations that make up the structure of your business. Every procedure should be scalable to make sure your business can expand. You will be able to replicate your success exponentially. But this only works if your systems and procedures can handle a load of business and not be overwhelmed.
Become Crystal Clear About Your Big Why
Your “big why” is your purpose. It is something that drives you when things get tough. It could be the million dollars, or it could be paying the bills to feed your family. If you don’t know your personal why, it is discoverable through taking action and finding your reason to buckle down and work. It is about your purpose, a mission, or need that keeps you focused.
Wanting to become a millionaire real estate agent is a big goal. Thinking and dreaming big helps you build momentum towards achieving this success. Becoming a millionaire real estate agent is possible, but it does not happen overnight. Only you can make it happen by constantly learning and being persistent in your goal. Ask yourself every day what you are doing that is getting yourself closer to your short term and long term goals.
If you have finished reading through the steps, it might be overwhelming to absorb all the information at once. But by now, you probably have some plan or idea to take that first step in scaling up your business. It is easy to get stuck planning all your steps, but avoid getting hung up on the small details that will not move you closer to your first million dollars.
The success of other real estate agents that have become millionaires has left the rest of us with advice on how to make it there. Following their steps makes it possible to replicate this success. But in the end, it is not a competition or race to get a million bucks. It is about the entire journey, all the skills and experiences you gain along the way that maximizes your success.