Marketing Costs for New Real Estate Agents
Like for those starting many service-based businesses, common wisdom for new real estate agents is to budget 10 percent of their commission income for marketing. That can be difficult because a new agent is less likely to know what that income will be. Adding a percentage of commissions to a base budget amount is easier to plan. If you're doing well, spend more on marketing to keep that trend going.
It can be a career death knell to allocate nothing to marketing until you build commissions, as it may be too late. If you're a disciplined money manager and don't carry a lot of debt, borrowing is a reasonable tool for this purpose. A certain amount of spending from a credit card or other small revolving loan can be allocated to marketing during the first year. Stopping use of that debt when commissions come in is likely a good decision, though be sure to continue to allocate a similar marketing spend from the commissions.
Plan for Quickest-Result Marketing
If all you can afford are business cards, you better figure out how to get as many cards in the hands of viable prospects as soon as is possible.
If you have a bit more budgeted than that, how much you have plays a large role in marketing decisions. Some ideas:
- Image advertising should be postponed. Image advertising covers the ongoing inclusion of your photo and slogan in newspapers and magazines or radio spots that promote your services. This can be good long-term marketing but doesn't generally produce results until it's been run consistently over time. Most new agents need business their first year to survive.
- If you want to "farm" a subdivision or specific area, study property sales to make sure there's enough activity to justify marketing spend for that area. Research into how many agents are your competition in that area can also help. Most MLS systems show sold reports by agent. Do an estimate based on getting 5 percent from a particular market to see what the dollar return might be. If the numbers are favorable, it may be worth buying direct mailers, an ad in the subdivision's newsletter, or targeted online ads.
- Budgeting for a website/blog is essential. Low-cost ready-built template sites often have options specific to real estate that offer attractive listing displays and lead follow-up forms, and these can yield results. After you've built your website, make sure to get the word out there through online, pay-per-click advertising such as Google Adwords, Zillow and more.
Track Each Marketing Method
Don't market without a way to know how successful each method you employ has been. How many leads have been generated? How much in commission has each method yielded?
All marketing types need a solid prospect management system, though online marketing makes tracking clients and commissions easier.
Keep Up With Marketing and Customer Trends
The real estate market changes rapidly. Keep up with what's happening so you spend money on the most effective marketing methods.
Don't jump on every bandwagon. There is more bland, ineffective marketing available to businesses than excellent marketing that gets results. Study each marketing method's promises and each company's services, track results, and don't get locked into long-term obligations.
Tried-and-True Free Marketing
Your long-term success as an agent largely depends on your budget and marketing plan. However, the old standby marketing methods synonymous with real estate agents can still work quite well.
1. Hand out business cards. It sounds old hat, but it's inexpensive and a proven business generator.
2. Community service brings business. Become active in the community. Avoid the hard sell, but let others know what you do. If Habitat for Humanity has a chapter in your area, volunteering can be a great way to help your community while you help your business.
3. Be outgoing and meet people. Many real estate agents build client lists through genuine social encounters that generate organic leads. And since real estate is in large part a referral-based business, these leads often lead to more clients as your profile grows over time.