7 Mistakes Agents Make Establishing a Property Advocacy Business
Are you considering becoming a Buyer or Vendor Advocate but aren’t sure where to start?
Here’s a cheat sheet on what to avoid if you are going to transition into this new career path and start your own business.
Not investing in establishing a professional brand.
If you look like a work in progress, you will be treated like one!
Perception is everything. The first thing we do when we talk to a new service provider is google them. So if you aren’t visible on google in a professional and credible manner, you will struggle to succeed, no matter how good you were at sales previously. Remember, you are who google says you are.
After leaving an agency that provided everything an agent needed to succeed, many new Advocates seriously underestimate the cost of starting a business from scratch, and what’s involved. Ignorance is bliss!
Nic Fren, former Real Estate agent and now, founder of Bespoke Media Group, outlined some of the initial expenses principals face building a brand from the ground up.
“A branding kit complete with logo and colour palettes is between $10,000 and $15,000 to create,” he said. “A good website costs a minimum of $5,000
All these costs need to be paid before your business turns a dollar. Then it takes at least six months to discover if you are going to get a return on this investment.
This will eat up time and mental energy that might be better spent generating income. And you take the risk that whatever you create will actually have commercial appeal.
By creating a new brand, designing digital and print marketing and collateral, you will however present yourself in a professional manner. You will need to engage a graphic designer, copywriter, website designer, attend to SEO, advertising and social and emarketing strategies and have hundreds of decisions to make a you start from scratch.
And you will need to concurrently build your profile as a credible and experienced advocate, which takes a long time.
Not setting up your business correctly.
While developing your brand, you will need to attend to the operating structures, legal agreements, insurances, industry memberships and licensing costs.
You will need systems, detailed documented processes and policies and procedures, if planning to employ staff. You will also need a CRM system, as excel and outlook alone won’t cut it. And you will need to ‘risk proof’ your business, to ensure you can succeed with minimum risk and maximum return.
To succeed, all of this can cost well over $100,000 . It will absorb enormous amounts of time, focus and energy. This can take away from money making activities that enable you to not just earn a decent income, but thrive.
Skilled property advocates can generate enough work to comfortably do this profession full time, but only when they are not caught up in the back end of running their business.
Not managing your time well.
Like sales, you will need to prospect and generate leads. However, you will need to do this while also fulfilling client briefs, which can be more time consuming than you might anticipate.
Becoming self-employed and running your own business is not for the faint hearted or inexperienced agent.
There are aspects of advocacy that are far more time consuming than an agent would imagine. You will need to learn to manage your time much better, as this is not a part time or 9-5 career. It requires many more hours commitment than that. In fact, it requires nights and weekends too!
For example, driving across town in heavy traffic to meet at a prospects home for a consultation, or to inspect a property to buy and then driving back again. I can assure you that the hours needed to go into being a good property advocate are no different to that of being a top selling agent. They are just allocated differently to what an agent might be accustomed too.
Not grasping a whole new way of working.
Its important to not underestimate that being an advocate is a whole new way of working. Its consultative, not transactional. It is a service business, not a product business (buying or selling a house).
To do it justice and to succeed, you will need to unlearn being a selling agent and learn how to be a vendor and/or buyers advocate. You may balk at the idea, but it is a very different skill set. And it’s easy to fail at advocacy.
Selling agents often think that their database of past clients will automatically engage their service as a Buyers Advocate. Thinking this way can be a mistake.
This is a service that needs to be sold, as it is not bought. By that I mean that the average prospect thinks they can do what you can do, for themselves. For many prospects it takes a lot of convincing to pay thousands of dollars ,when they do not really understand the value that a good buyer’s advocate will deliver. And often, they only find out when it is too late.
Many selling agents who transition to property advocacy struggle to convert prospects to clients. They are accustomed to vendors understanding they need an agents help to sell property, so it’s only a case of which agents they choose to engage.
With buyer advocacy, it’s a case of educating consumers as to why they need help (even when they have contacted you). Convincing them to engage your services while still competing for the business against other advocates is a whole new skillset to learn.
Now knowing how to qualify and convert prospects to clients.
Many new property advocates do not know how to properly qualify a prospect, which can lead to a lot of wasted timed. There will be prospects who are happy to meet with you to educate themselves, but they won’t want to commit to using your service.
Prospecting is time consuming and your efforts may get diluted. If you can’t qualify your prospective client quickly, you can’t decide the best use of your time. Focusing on what I call ‘green cherries” (not ready) versus “red cherries” (ready to go) will determine your level of success, or failure.
Seek out ongoing training and mentoring to qualify and convert prospects. There may also be potentially earn additional funds via referral relationships to make your transition easier and more profitable.
Thinking that you will convert a client to a purchase in 4-6 weeks.
The nature of advocacy often requires the advocate to develop a buying brief for a client, as they may not be clear on what they want or need.
Buying for clients can often take two – three times more work than that of being a selling agent. A perfect example might be working with a home buyer and missing out on 3 properties at auction before you eventually secure a property for them. And this could have taken a 12-month period to achieve. All this effort will earn you a single fee.
Selling agents who think they can convert a buyer every few weeks like a vendor, will be in for a rude shock. This isn’t a business where you can ‘churn’ clients. It’s about the right property, at the right price and for the client to purchase, all their boxes will need to be ticked.
You will need to know how to manage client’s expectations. If you can’t educate them about the price they need to pay for the property (without overpaying), they could end up chasing a rising market. Sometimes bad luck at auction will require a continual reassessment of a client’s brief to secure them an outcome. It will take time before you are fully paid.
Underestimating the need for community
There are far fewer Property Advocates than there are selling agents. It is important to ensure that you make connections with other advocates, even though you may likely compete with them for business at some point.
This is highly specialised area. It’s good to be able to share knowledge and intel with experienced colleagues, which can benefit each of you. It also helps to workshop different scenarios you will come up against. Referring to, or splitting deals with other advocates is also a bonus.
It will also ensure that you don’t feel so alone, if you are a solo operator.
Mistake Agents Make, in summary
- consider each of these potential mistakes before venturing out on your own
- make sure you have access to mentors who can support you on an ongoing basis on your journey
- Have at least $100,000 to set up your business properly, if you are starting from scratch
- Getting established will take time. Ensure you can cashflow several months’ worth of business and living expenses until you start earning money
Miriam Sandkuhler, CEO Property Mavens and Property Mavens Franchising, Industry Thought Leader.
“Property Mavens is a multi-award winning and industry recognised Property Advocacy agency. We are dedicated to providing our clients with independent and unbiased evidence-based advice.
Join us at Property Mavens Group
Become a Property Mavens ‘Agency Owner’. Currently we are in a growth phase and we’ve got more buyers wanting help and leads than our team can handle. We’re recruiting property professionals and buyers’ agents to join us.
Now’s the perfect time to make your move but we have limited places available in this strong buyers’ agent business, with leads in Melbourne, Geelong, Bendigo and Ballarat.
Want to know more ? Call Miriam Sandkuhler, on 03 9988 2266.