Tax Tips For Real Estate Agents
You, as a real estate broker or agent, have two ways to grow your real net income:
1. Financial Offense
2. Financial Defense
Financial offense boost your income. Get more listings, more showings, more closings, sell more expensive properties, add additional services and the like.
Financial offense is hard work! If it were easy, everyone would be doing it.
Financial defense is simply to cut costs, while maintaining the integrity of your business plan. If you are like most real estate pros, taxes are your biggest single expense—and your biggest roadblock to financial security.
A successful real estate pro can give away 40% or more of their income.
How do you stop the tax madness?
Tax planning guarantees results. You can spend hours and hours and thousands of dollars on speculative marketing efforts that take years to pay off for you. With increased income you spend $5 to net $1.
With taxes, if you save $5, you have $5 more in spendable income.
Tax planning gives you control. You can’t control the economy, interest rates, or any other external forces—but you can make sure you take advantage of every tax break the law allows.
Taking advantage of all the tax breaks and so called loopholes in the tax code is perfectly legal. But it is not all cut and dry, so it is filled with land mines and potential traps, the “red flags.”
To sum up, tax planning works. Together, both your offense and defense will govern the results you get from your business. To bring in the token sports cliché: ‘Offense sells tickets, defense wins games’. This applies to business as well.
Tips of the Month:
Tip #1. Picking the Right Broker or Agent, or How To Be The Broker/Agent That’s Right To Pick.
Do buyers actually go out and look for an agent? Probably most of the time they just stumble over them. At an open house, a cocktail or block party, a friend or relative who knows one is most likely the way we happen upon a broker or agent.
So, look at advice you may give someone on finding the best broker or agent, and make sure you are that person.
Recommendation – People look for referrals. Be out there, let people you’ve done great work for know that you did great work for them. Ask for the referral at the time you do the work when it’s fresh on their minds. And then follow up, don’t let em forget you. Get a testimonial.
Expertise – What is your expertise? Do you specialize in one area or another of real estate? This helps to nail down your target market. Then combine that with the recommendation side and hang with the people who can refer you the prospects that are most likely to own or want properties in your niche. Let them know, you are the professional who has done it before.
Commitment – How committed are you to putting the client first? This is a gut check one. People want a pro that’s totally committed. Are you that person? If not, become that person. Remind yourself each day where your bread is buttered. Fall in love with your prospects and clients. It makes the work more fun too. Are you just dabbling in real estate part-time?
Reputation – Reputations good or bad, are earned. They are earned by doing great work. Have letters of recommendation from clients and from your office managers, if applicable, for potential clients.
Drive – Kind of like commitment, but more action oriented. Drive can also be called determination. Do you have it? Are you part-time or full-time? All the drive in the world is useless if you’re not around when the client has a problem or wants to write or respond to an offer.
Flexibility – This goes somewhat with expertise, but how adept are you at sensing the right time to adjust pricing and adapting to changing real estate climates?
List/Sale Ratio – Do you close 70% or more of your listings? What is your listings average time on the market? A smart prospector may ask to see statistics, but even if they don’t, it should give you confidence in knowing the numbers. Also, if they are sub-par, it gives one a goal to work toward.
The Company You Work For – What is the company’s reputation? What is the company going to do for the client? Does your company have systems with strong marketing plans and tools, and systems to communicate these to the client? The company should have a strong reputation of backing up the client.
Bedside Manner – Maybe actually the biggest single factor for selecting a professional to represent a client is his or her bedside manner so to speak. How well do you connect? How well do you sense what the prospective client wants from you? And how willing are you to give them exactly what they want? People can sense these things so you need to have the right attitude and it will shine through.
I hope these are a help. You may have more traits that you have worked out yourself but the key is to become the real estate professional that the clients you want to work for are looking for. Then your confidence and energy will precede you in all your business dealings. These even work to improving yourself in your personal life too.
Successful agents spend more time by far, than unsuccessful agents, finding prospects proactively, presenting, and closing buyers and sellers. Therefore, these items should be priorities for the successful real estate agent.
Be able to help your clients, either with personal knowledge and experience, or by getting an outside advisor, with decisions regarding real estate investments. This helps them make buying and selling decisions quickly and makes you look good. Click Here to read my article on “Tax Tips for Real Estate Investors.”
Go get em!!!