So You Earned Your Florida Real Estate License
What to Do After You’ve Passed Florida Your License Exam
WooHoo! You passed your exam and have earned your Florida Real Estate License. What happens next? Hopefully, you’ve done some soul-searching and have a really solid ‘Why’ you’ve entered this industry… and hopefully, that Why is more than just potentially earning a good income. You didn’t think this was going to be easy, did you?
Welcome to the 18.6-Year Real Estate Cycle. As of this writing (April, 2023), the United States is well into the Second Half of the 18.6-Year Real Estate Cycle. What does that mean? Well, you’ll need to read ‘The Secret Life of Banking and Real Estate’ or become a student of Philip J. Anderson and Akhil Patel at Property Sharemarket Economics to gain a better understanding of the concepts and timing involved.
You can also refer to our previous posts here:
https://StAugHouses.com/staughouses/18-6-year-real-estate-cycle https://StAugHouses.com/staughouses/housing-bubble-not-yet
During the second half of the Real Estate Cycle, the value of real estate increases at a fever pitch. Buyers toss caution (and Location-Location-Location) to the wind, and buy with both fists. Investors and Developers leverage themselves to the hilt and build with wild abandon in a mad rush to the top… and then to the bottom. Government does its best to be inclusive and creates all sorts of incentives (and funding mechanisms) for under-represented populations to enter the real estate market without regard to their ability to repay in the future.
Regretfully, many of these folks will not have been given the tools to avoid foreclosure when the market shifts. In addition, since they’ll be some of the most leveraged via low down payment FHA loans, down payment assistance in the form of credits, loans, or grants, extended debt-to-income ratios, additional qualification support with Adjustable Rate Mortgages (ARMs), or even 100% financing similar to the offerings during the last cycle that topped in 2007/2008.
This buying frenzy entices thousands upon thousands of average folks to pursue a real estate license. Being a Real Estate Agent seems easy enough: you show a few houses or make a few listing presentations, you put a house under contract, and you collect a tidy commission…. right? That is an amazingly and overly naïve simplification, but that, alone, entices hoards of new agents into getting their licenses every single cycle.
While some of these second-half agents will figure out how to save money in the good times so they can survive the lean times, a great many simply do not understand the cyclical nature of real estate and find themselves seeking other career opportunities after the inevitable top and subsequent 4-year real estate correction (see 2007/2008 to 2011/2012). Let’s see if we can help you through this part of the cycle and prepare you for what’s next.
So, You Passed Your Florida Real Estate Exam
Congrats! If this is your first foray into real estate, hang your license with a major franchise real estate brokerage and take EVERY course they offer as quickly as you can.
Forget ‘brokerage split’ and franchise fees for the moment. Focus on education and working your ‘sphere of influence’ for Buyer and Seller opportunities so you don’t starve to death in the first 6-8 months. You should have entered this process with at least a 6-month nest egg, but you probably didn’t, so let’s move on anyway.
Once you know what you’re doing (the license course and exam do NOT prepare you for the real world of real estate), then you can decide whether you want to incrementally give up support to increase your split.
Keller Williams and Coldwell Banker both have great newbie training programs that will help you for the DURATION of your career. Too many new agents are focused on making the highest percentage split they can right out of the gate… and when the market cools (as it will in or after 2026), they have no idea how to weather the storm of a 4-year downturn. Having the initial support of a major name will also help you overcome the objection of your being new in the business. After all, you have bevvy of folks who all have a vested in your personal success.
This is NOT to say that small, independent offices should be avoided, just that you will need support and education to build your skillset for long-term success. If a small office broker is willing to mentor you and basically provide on-the-job training (OJT), that can work. However, it takes more than just promises; there needs to be sincere follow through.
Find a Mentor
Whether it’s your Broker or an experienced agent in your office, find someone who is willing to mentor you. If you’re not an expert in something, find someone who is, and ask for help. Be respectful of their time and knowledge and show appreciation. Some folks like verbal gratitude, others like meals or gifts, others like cash. Need to pick their brain about a tough deal? Take them to lunch to discuss it.
Find out how THEY prefer to communicate (in person, via email, via text, via phone call, etc) and communicate with them per their preference. If an agent is helping you land a customer or client, offer to cut them in on the deal with a referral fee that is commensurate with the help they’re giving you. Everyone likes to be appreciated, but getting paid is a professional way to show that, when appropriate. Your broker is likely already benefitting financially for your success, so you shouldn’t necessarily have to compensate them monetarily, but think about how you would like to be treated, and act accordingly.
By the way, it’s okay to take and keep notes about people’s preferences like how they take their coffee, favorite flowers, hobbies, favorite restaurant, and so on. This is true for colleagues, mentors, and customers. If you give thoughtful gifts when you show appreciation, it confirms you’re paying attention and actually care.
Study and Understand the 18.6-Year Real Estate Cycle
Educate yourself on the 18.6-year real estate cycle (which nobody in real estate teaches). Read ‘The Secret Life of Banking and Real Estate’ and follow Property Sharemarket Economics (I get no kickback). It will help you provide fiduciary services to your customers and clients that will keep them coming back and referring their friends/family.
Document, Save, and Invest
Open a Roth IRA ASAP. Always pay yourself first. Save 50% of your income so you can cover your taxes and put money away for the inevitable commission droughts. Build a fund to cover at least 6 months of personal expenses and don’t touch it… then expand it to 12 months, and again, don’t touch it.
Put at least 10% into investments (Roth, real estate tax certificates, index funds, etc). Hire a great CPA. Find an experienced attorney. Find 3 honest local home inspectors and at least 2 local honest handymen. Track ALL of your expenses in a spreadsheet, and use cash-back credit cards for EVERYTHING. Regularly use the cash back to pay down balances.
Forget about vacations for awhile; you’re building a business and spending/wasting valuable capital on a cruise or a trip should not be your first priority. Work/life balance is likely going to be a struggle. As Realtors, we often work when everybody else is off. Expect your phone to ring at all hours of the day and night and expect to work weekends and most holidays. There are gurus out there who teach you to run your business like a workweek 9 to 5. That’s a nice idea, but for the moment, you work when there’s work to do. As a mentor once told me, “I will do today what others won’t, so I can live tomorrow as others can’t.”
Document your mileage on EVERY trip by app or calendar entry and document your odometer reading the day you start using your vehicle for real estate and at the last and first day of EVERY calendar year. Keep EVERY receipt – that includes parking, tolls, restaurants, etc… Using a credit card and keeping PDF copies of your monthly credit card and bank statements will make your life easier during tax time. Create a folder on your computer called Receipts and file PDFs in that folder throughout the year. Likewise, create an email folder called Receipts and file those online purchase email confirmations in it – again, get organized now to save time and effort later. You can’t deduct an expense you can’t find.
Protect Yourself and Your Business
Consider creating a Professional Association (PA) or a Limited Liability Company (LLC) for your real estate activities to help minimize liability. Look into, understand, and acquire Errors and Omissions (E&O) Insurance because lawsuits have, unfortunately, turned into the American Retirement Plan.
Do NOT increase your lifestyle to match your increasing income… don’t buy luxury items or sign contracts to pay for crappy leads regardless of sales pitch/reviews. Build the brand that is YOU, and it won’t matter which company with whom you hang your license. (See also social media marketing, personal branding, and e-PRO certification.)
Become a Broker
After 2 years, take the broker course, even if you have ZERO interest in opening your own brokerage. As my Broker Instructor said during our course, “The Broker is always broke.” While being the king/queen of your own castle sounds great (and it can be), it also means your overhead will increase beyond any planning you might do. Being a broker provide more education, more connections, and moves you forward in the expert category.
Take all of your classes IN PERSON so that you can rub elbows with experienced agents and hear real-world examples and stories. Online courses are convenient and meet CE requirements, but you don’t make friends/alliances that will inevitably help your ongoing career. I avoided many mistakes simply because of shared stories in my in-person courses. There are always pitfalls and easily-made mistakes that can be avoided if you know such mistakes are even possible.
Become a Fiduciary
TRULY understand what fiduciary responsibility means and vigilantly practice it EVERY SINGLE DAY. Don’t let water-cooler talk, buddy chat, venting, or braggadocio undermine your customers… EVER.
The agents who make it in this business understand cycles, focus on niches in which they become actual experts, build their brand, and ALWAYS put their customers’/clients’ needs and desires ahead of their own.
Your job is to assist your customer/client in finding the property that is perfect for them at that moment… not to maximize your time or commission. Yes, you need to create boundaries and communicate them, but understand that focusing on YOUR needs will put you out of business in a hurry. Keep your personal commentary to a minimum during showings. You never know which innocent or joking comment is going to trigger a Buyer or Seller into shutting down. Obviously, if you have expert commentary such as the condition of a roof or foundation, you’re expected to point those things out. However, providing your personal opinion on decor or housekeeping is immaterial and can be detrimental. As an example, you might walk into a room with a hot pink accent wall and be aghast. At the same time, the Buyer may be thinking it’s their kid’s favorite color and it’s fantastic. If you poke fun at the color, you likely just alienated your customer, and that could be enough for them to decide to work with someone else.
Expert comments = Yes. Personal opinions = No.
Write Down Your Goals
Figure out your income goals for your first year and work backward to figure out how much volume you’ll need to make to satisfy that. Once you have your goal volume, work backward to determine how much volume you’ll need each month. Your broker can help work that backward into figuring out what sort of pipeline of business you’ll need to get there. Back further to how many appointments. Back further to how many leads. Back further into phone calls and/or marketing efforts. Start with a WRITTEN GOAL in mind and work it backward to figure out what you need to do on a monthly, weekly, and even daily basis to reach that goal.
Don’t let ANYONE (even your broker) convince you to reduce your goals or dumb-down your results. My first day in the business, I told my Managing Broker in my initial planning session that I wanted to sell $10mm my first year. She thought that was ‘a bit high’, and that I should be more realistic, so I downgraded it to $5mm. At the end of the year, my partner and I sold $8.5mm, and we sold $12.5mm our second year… in a market where we had NO sphere of influence. There’s no telling what we would have sold if I had stuck to my guns on $10mm. (Btw, she apologized later when we received the Rookie of the Year Award for our office.)
You Are Considered An Expert… Even If You’re Not
Your license designates you as an expert even though you presently are NOT an expert at anything other than taking a course and passing an exam. Your journey is literally just beginning and the only person accountable for your success is YOU. So again, we’re back where we started. Focus on educating yourself, honing your craft, and getting to work. Don’t get paralyzed by the seeming enormity of the task at hand. Focus on breaking down your goals into bite-sized pieces and work on them everyday.
You can do this, but YOU have to do it. Always carry business cards and work the fact that you’re a real estate agent into conversations as casually as you can. Don’t be obnoxious, but do let people know what you do. If you do mention your business, be sure to ask about theirs as well. You never know where your next customer or contractor is going to come from unless you ask.
Good luck and do your best each and every day to become a better expert at helping other people get what they want, and you’ll find what you want takes care of itself.