All,

I'm a newly licensed real estate agent. I will be practicing part-time for now. I have budgeted $10K in start-up costs. I would like your opinion on how I should spend this 10K. Here's my proposed allocation.

Budget

Pre-Licensing Course 300
License 65
Start Up Expenses 1700
Continuing Education 200
Farm Area 2400
HomesandLand 1500
Website 1200
1-800 Response
Line 600
MLS 660
Cable TV Advertising 375
Newspaper Advertising 1000

Amount Allocated 10000

Have I missed something? Should I be spending more or less on certain items? I know spending a lot of money doesn't guarantee anything but I hope directing my monies efficiently in keys areas will jumpstart my business. Your comments are greatly appreciated.

Crystal

How would you use the cable TV ads and newpaper ads?

You should probably print lots of business cards to pass around too. I would spend alot of time, energy and resources to work on the "Marketing Me" plan.

I came across a site that allows you to advertise listings inexpensively on CATV. http://www.hpctv.com/realtors_info.html. This would be used to market listings. The classified ads again would be used for lead generation. Headline ads would be placed in 1-2 weekly papers (e.g., Pennysaver) directing users to my 1-800 Response Line.

Hi. I will try and add my input for you.

I will go down your list with everything that looks out of place.

First, why so much for start-up costs? $1,700? You should narrow it down to exactly what you will need for start-up and then give yourself a small cushion. Writing down your needs will be the best way you could do it. I don't think you will need $1700, but then again, I am not sure exactly what you are including in this alotted amount.

Next, you have your farm area costing you $2400! What exactly are you going to do in your farm and how long are you talking about? This matters because this is mainly where you will want your focus to be.

Next, Homes & Land. I would go easy on the magazine publishing for now. Save some of this money and add into one of your more important categories.

Next, the 1-800 response line costing you $600! What kind of response line do you need? Can you elaborate on this one? If you are just looking for an 800 number, you can get them much cheaper.

OK, cable tv and newspaper ads. I would go easy on these too. Nothing worse than throwing a bunch of money into something you aren't sure if it will work. Maybe you should use this money for your farm instead.

One last thing. Try to focus on people that you already know too. This might make things easier and cheaper for you. Send everyone an introduction note that states that you are now in real estate. Once you start doing some transactions, make sure you also save most of the money for additional marketing and advertising. I wish you the best of luck and hope my post was of some help.

The $1,700 startup costs include E&O insurance, local, state, and national association fees lockbox, MLS subscription, business cards, name badge, and fast start training. I estimate $1,700 but it will probably approach around $1,500. The $2,400 is for targeted mailings within my farm area. I will be doing monthly mailings to 500 homes. I was estimating $50 per month on 1-800 line. I can probably lower that to $25 based a service like AdTrakker. The cable TV expense would only come into play if I had a listing to advertise. The weekly newspaper classified ad was based on reading how low-cost targeted ads in newspapers can be used for lead generation. My 1-800 line would support the newspaper ads by providing them "free" information.

Thanks for your advice.

Crystal

Budget for all the basics, (business cards, simple web site, lap top computer etc).. and nuke any and all mass advertising... focus your time and your funds on meeting people and doing professional, "impression making" follow-up. Keep your focus on building relationships with one person at a time and you will end up with a powerful foundation for a successful real estate business. Smart farm geographically and in niche markets with a one prospect at a time intro and a pre-planned high quality professional 6-10 touch follow-up system. Grow and go based upon this type of focused, targeted spending and you will beat the averages and make money!

find a good brokerage. mine pays for my e&o insurance. some brokerages will even sponsor you and put you through school! also if you pick a big brokerage like century 21, or remax ect. they have FREE continuing education classes.
find a free website place like point2agent.com where you can have your own website for free and you do whatever you want to that website. it is extremely nice and professional and your website address would be "yourname.point2agent.com"
also get in touch with a couple of title agencys they will do most of the advertising for you for free. jUSt tell them what you want to do like "farm" and where you wana do it. then they will probably ask you for your picture and the rest is done for free!!! i know it sounds to good to be true but it isnt... i work with three different title agencys and EVERYTHING is free including lunch!
next get your business cards asap. my title agency guy also did my business cards for FREE!!!! and start handing them out, talk to anyone and everyone. ex. of questions to ask. do you own your house? have you ever concidered selling? who do you know that wants to sell/buy a house. can i have their info? here is my card if you ever need anything. just be polite and to the point
anyways the best thing you need is to pay as little as possible and keep the rest in the bank for a rainy day, or just incase you need to live on that money cause the first couple of months are extremely hard. and it would be alot easier if you had that extra money. so all im saying is only spend what you have to. get as many free things as you possibly can.

IF YOU FOLLOW EVERYTHING I JUST SAID YOU SHOULD SAVE YOURSELF ATLEAST 3000 DOLLARS. SAVE AS MUCH MONEY AS YOU CAN. TRUST ME YOU WILL NEED IT.

Chris,

I'm signed up with Century 21. I'm a part-time agent as well. What services are these title companies providing to you for free?

they do all my farming. they do all my doorhangers/window flyers. they did my business cards. he sends me the link to microsoft publisher he tells me to design what i want and where i want them sent and how many i want sent out. three days later they have been mailed. they give me all kinds of goodies to hand out at open houses. i work with 3 different ones and it is great. they are so desperate for business they will do anything to help out agents.

Save your money!!! You're going to need it. You can easily burn through $10,000 in this business. You need to lead with leverage. Don't start spending money until you make money. Sure you need the essentials. Get your business cards made first and foremost. Don't advertise. That won't guarantee you business. Make a list of 250 people that you know. Send out an introduction letter for starters. Create awareness of what you are doing. Contact me if you want some more info. I can help you out.

I'd work on you first then the money later. What you DON'T NEED is to start out with a good bit of business and then do poorly with those first clients. Real estate is a skill as much as it is a business , I know in my area , reputation speaks louder than TV ads. I know for me personally , 70% of my 1st year costs have been between NAR fees , MLS fees and education/computers , ect. The best advertising you have is you. Just remember , calling FSBOs and Expireds is free (Having said that , i called 4 fsbos yesterday and now have appointments with 2 of them).

Lose a few of your line items and replace them with:

1. Dues & Memberships

Focus on investing in your name and reputation by joining your local chamber, civic, R.A. and other local groups. These will become vital areas of networking and word-of-mouth opportunities for you, that can produce an endless supply of future referrals and introductions.

Try the 40/40/20 principle for your marketing/advertising expenditures:
a. 40% of budget towards associations and groups;
b. 40% on strategic alliances;
c. 20% on traditional forms of advertising

I live in MD. I contacted 5 local title companies over the last two days. None of them agreed to subsidize my farming activity.

OK I'm very new - still ni class as we speak - but I thought title companies worked with lawyers to do title searches on properties... why would they be willing to do all this work for you for free when you don't provide them anything? Or am I thinking of the wrong type of company.

It seems like maybe mortgage brokers would do this because I know the broker I bought my current house was very willing to help me out in selling my house because he wanted the buyer's business....

but maybe I'm just confused...

sorry.. topic kinda strayed, but I believe everyone else answered the main question.

Thx
Rae

Hi Rae,

In some states attorneys handle a large portion of a transaction, which I'm guessing is the case in CT. In other states attorneys are not involved at all. You open escrow with a title company and they become the escrow holder.