Best car for new real estate agent?

[Mindi Rosser]

I'm nearing the end of real estate school and will be taking my state exam in mid-July. 

I've been reading @Scott Trench's book, Set for Life, and I'm bought into the concepts. The problem I'm having is... figuring out which type of car to get when I move into becoming a real estate agent - don't want to go into much debt, but I also want to put my best foot forward as a professional. I am not quite to the 25k savings goal, but I'm getting close.

I have a 10-year-old minivan currently and don't think that vehicle is appropriate for my market. Any tips or advice?

[Will Fraser]

Hey Mindi!  I think the real answer to this question depends on who your clients are/will be.  The answer to this could be dozens of different things and, as I well know, as a new agent it is nearly impossible to know this.  However, if you already have a strong hunch of what type of clients you'll work with then that can be a guide.  

If that isn't a guide, or if there is something deeper you want to live by, then let that help you decide.  For example, if you're loving Trench's book, you're probably also diggin' the Financial Independence ideology (or if not, I bet you will).  If that's a banner you want to wave, then I'd encourage you to wave it and not think to much about what you're potential clients will expect you to drive or any other factor.

I drive a "non-ideal" vehicle up to my brokerage every day and park it next to a lot of luxury SUVs (because many of those agents have figured that if they drive a top-tier SUV they'll look the part that their client expects them to look and then they'll have more business).  In my calculus, though, I know I do business with people I know, like, and trust and I think that people will know, like, and trust me the most when I'm living in the way that is most in-step with who I am.  As someone who labors to have only strategic debt, I've found it a BOON for my business, and not a bust, to have my car as a spring-board for conversations with potential clients.  The end result of those conversations is either:

- They know, like, and trust me more because of the way I choose to live and WHY I choose to live that way, and then they are a qualified business partner,  - or - 

- They don't know, like, and trust me for the same reason, and we don't do business together.

So, all that to say . . . either buy a car that makes sense to who you KNOW your clients are or buy one to be part of the wisest, most genuine life you can live.

Those're my thoughts :) 

[Marcus Johnson]

Wealthy people don’t drive expensive cars, so if want to be rich drive a Toyota Camry. Poor people tell you to drive to impress.

[Roxie Kim]

Will driving a ten-year old minivan TRULY be a hindrance in your career, especially for someone as young as you? I would bet that it won't be any hindrance at all as long as the car is clean and tidy and you dress professionally and work hard while doing a fabulous job for your clients.

[Sam Shueh]

Hybrid. Do not buy a car lease it see if it works for you. An leased SUV is also OK if you want to drive people around town. 

In our area-the affluent Silicon Valley I drive a Honda Civic.  They do not mind ride inside my fairly new car. Got a lot of new technology built into roomier than a BMW. Many people prefer to drive their vehicle meet at the house.

CA Agents used to drive Lexus. Now a few drives Tesla, a locally produced electric vehicle. The S model has low clearance which makes it not practical.   

[Travis Zuehls]

I wouldn't put much stock into it. If one isn't comfortable with their current car just park far enough so nobody see's your car. For right now I'm fine with my 2008 Saturn Aura as it's black and looks like an expensive lexus but you can find them for under 6k right now. In the near future I'll probably go with a Tesla but your car isn't a reason why anyone selects you over another agent. If you have a car that's not what you want at the moment just make sure it's clean inside and out with no major damages.

[Matthew Olszak]

Originally posted by @Marcus Johnson:

Wealthy people don’t drive expensive cars, so if want to be rich drive a Toyota Camry. Poor people tell you to drive to impress.

I disagree with this common anecdote. I work with many "wealthy" folks and they all have NICE cars. Not Ferrari or Aston-Martins, but nice cars. Spending 100k on a car is a drop in the bucket when you are worth 50MM, or even a 10th of that. Poor people count pennies, the rich worry about exponentially more.

[Simon Martinez]

I’m not a real estate agent but I would argue that your car should be something fuel efficient since you will be doing a lot of driving around to show people homes.

There are cars that are brand new 2018 models with 35+mpg that cost less then $15,000.

Plus you can write off all those miles as buisness expense if you keep track of them. $0.56/mile I believe is how much of a tax deduction you get so it’s best to get something fuel efficient.

[Marcus Johnson]

@Matthew Olszak

Yes, you may want to base your assumption on facts.  Read the millionaire next door and you’ll find that self made millionaires don’t drive a car that is anything special.  See people with financial knowledge know that cars are a depreciating asset and are a terrible investment.   I laugh at my realtor that drives up in her nice sports car knowing that she has to work hard to afford that car and has no net worth in relationship to her salary.  

[Joel Owens]

Some wealthy people drive expensive cars because they like and enjoy expensive cars.

Ones that can't afford to drive those should not be buying those. Some people have vehicles to drive from point A to point B and could care less what it looks like.

Just like some people eat food to fill the hunger but almost care less what it is versus a foodie that loves really great food to eat. People put value in different things compared to what they enjoy. Some people love watching movies and others shun cable and want to hike mountains all the time.

I have learned in my life to respect that different people enjoy different things. Someone could go hiking a mountain for 1 week and have the time of their lives. Me I like to hike for a day and then go back to the hotel for a nice steak and the hot tub. Different strokes for different folks.

A 1,000 a month car payment is nothing when you make 600,000 a year so it's all relative. The problem is people making 80k a year to 100k are trying to buy the 80k car and living hand to mouth. When sales slow down they can get into big trouble.

I think the biggest thing in real estate is to be relate able and knowledge able.

I am in commercial real estate but I am NOT a suit! LOL I am an easy going everyday guy that dresses nice but fun casual. If someone is too tight for a client then I just could not connect and work with them. It's okay as some tight people enjoy other tight people....... : )

I think for residential real estate it depends on what you are selling. If you are working with first time home buyers then looking upscale is generally not needed. Also working with investors they just want the deal and if you are presentable they could care less about the other stuff.

When you get into second tier and some upscale homes then you have to generally look more polished and a newer looking car.

That is just the way it is around here for the most part your area might be different. It is all smoke and mirrors. The agents advertise million dollar producer but then do not advertise that is 1,000,000 in annual sales. So 1,000,000 sales at 3% commission is 30,000 a year! That is before expenses and broker split if they are an agent. 

The best thing I can say is do right by people and define what kind of clients you want to work with. I get contacted frequently and I have a process to see if a potential client is a fit for me or not. Maybe 3 to 4 out of 10 are. Some are unrealistic for market conditions, others want to fight the process getting docs back to me, others want to buy too low a price point,etc. Just remember as a broker/agent if you stand for nothing you will fall for anything. To make high income you need FOCUS and CLARITY on who your target ideal client is. Drown out the noise and then build a structure to ramp up the ideal clients with funnel systems. Imagine a group of potential clients and the funnel has certain qualifying rings the smaller it gets and the further it goes down.

At the bottom is client from an initial contact or inquiry. You have to have a laser like mission on what you want to do and accomplish with your business. 

Before I expend ANY effort at all I analyze relationship value and odds of finding what the client wants. I want to know that if I expend energy,time, and resources that odds are high it will lead to a closing and then others thereafter. I am interested in long term relationships where the client and I work great together. I do not like one off deals where it is just a transaction.

[Account Closed]

I’d imagine there’s such a thing as too flash...right??

[Joel Owens]

I try to not over think on what people perceive. I just be myself and I am happy doing that and if people like me great. If they do not I am not trying to connect with every single person in the world anyways. There is power in self acceptance  and being comfortable with who you are.

If you try to always be what others want you to all with different personalities then you will lose your true self.

Certainly if your business model for example is to buy foreclosed houses from distressed owners then yes do not roll up in a Ferrari..lol

[Aaron Hunt]

Originally posted by @Marcus Johnson:

@Matthew Olszak

Yes, you may want to base your assumption on facts.  Read the millionaire next door and you’ll find that self made millionaires don’t drive a car that is anything special.  See people with financial knowledge know that cars are a depreciating asset and are a terrible investment.   I laugh at my realtor that drives up in her nice sports car knowing that she has to work hard to afford that car and has no net worth in relationship to her salary.  

Don’t need a lame book to tell me what I personally see on a day to day basis. I know far too many self-made millionaires (many who are legal immigrants with no family backing or inheritance) in various industries (tech, medicine, RE, finance, etc) and every single one has a nice car, and most have multiple nice (luxury) cars.

I don’t know a single self-made millionaire that does not own a luxury vehicle (some buy old ones, but they are still luxury vehicles).

I’m talking about those making at minimum top 5% (low to mid 6 figures) to those who are pulling down 7 figure rental income/yr, and donating 8 figures for buildings with their name on it.

[Brandon Battle]

The best vehicles to have would be an suv or a car with a hatch back and folding down back seats. You need a car with lots of trunk space to transport your open house signs,folding chairs and small folding table (for vacant properties),snacks and drinks,etc. Get a Costco membership! When you’re new you are doing every job yourself and if you survive to make a good living you can hire other people to do your signs and open house preparations for you.

[Account Closed]

A clean paid for vehicle the most cost effective means to travel the road to success and financial freedom... practice the lost art delayed gratification by building your business and your nest egg

[Victoria Woodley]

Mindi,

I would honestly hold off on making a purchase like that until you get your feet under you. It can take some agents 6 months to have their first closing. I don’t know your circumstances and market, but it’s usually best not to add more bills until you know for a fact real estate is going to work for you. I LOVE that you have a good nest egg to cover bills because that’s a lot of new agents first mistake when transitioning into 1099 so you’re on the right track to success!

My dad has been an agent/broker for 17 years and when he started out his car was nothing fancy, but people appreciated hard work, dedication, and his ability to negotiate one heck of a deal.

When I was an agent I drove an old beat up PT cruiser and it didn’t deter people.

My husband is an agent as well and when he started out his car was an old beat up white car. He’s a HUGE advocate for “dressing/showing up for the job you want/clients you want, but he even had to hold off on the new car. He worked his warm market who understood he’s starting a new career, and when he got busier with other clients outside of that he bought a Lexus.

Both my dad and husband have had a Lexus as agents and they’re great! Good gas mileage, luxury but you can get one pretty cheap used, and they run FOREVER. My dad had his 10 years before he had any major problems.

Good luck on your new career! Perseverance is key!

[Jay Hinrichs]

Originally posted by @Steve Vaughan:

As a seller (You don't want my car advice, trust me) of many houses, I am turned off by the 'Escalade', big hair and pumps.  But that's just me.  How the heck are you suppose to pre-walk my property for your clients wearing those shoes? This isn't the grand ball, right? People will see through it if you are being superficial. Be yourself.

My favorite realtors are business casual, same with their vehicle.  Nothing too fancy, but not a heap.  I'm the one in coveralls with the line of keys dangling down my leg so I'll drive the heap along with Jim and not care :)  

its why when I started my real estate career I did not go toe to toe with the women that were selling houses.. I specialized in land sales. Not that women could not sell land or men could either .. but land you need special skills one is a really good understanding of maps and surveying and reading a quad map.. ( which google has changed that.. )  so my dress was always jeans and boots.. so I could get out there and walk the property lines on a 40.. or jump on my quad and run the cut lines on a big ranch type parcel..  4 wheel drive was a must.

Although my wife dress's the retail realtor roll.. but she will always have boots in the car and get out there and get them dirty.. many realtors men and women wont do it..  I love selling dirt.  NO banks NO appraisals  and bigger commissions.. :)   

[Michael Plante]

so many answers are not addressing the OPs question

As an agent looking to get sellers to list with you, YES you need a nice vehicle.  But don’t break the bank

[Junior Francica]

I have been an agent for about 3 months now and will be closing on my first deal in a about two weeks. I have had 1 couple ride with me and they were friends of mine so it really wouldn’t have mattered anyway what car I drove. Clients always either follow me or meet me at homes.

It is a hard industry to break into so keeping your expenses really low is the way to go. If I were in your shoes I would keep the van or sell the van and buy another car like a civic or camery or accord that you can pay for in full with the money you made from your van if you don’t want to drive a van.

[Franky Juwana]

When I was an Agent in 2005 in NY, I drove honda civic 2004, pretty economy in gas for driving around the neighborhood. In NYC my  clients rarely had personal cars, due public transportation are available, and I had to drive them around. I didn't care and could care less what they thought about me or my car. If they care so much about my car, then they could find other agents who had luxury cars or pretend they had luxury cars. I work with someone who wants to work with me. 

So, afford what you can afford, the rest is judged by your services and results.  

My 2 cents

[Peter Stewart]

This is always a hotly debated issue. I'll chime in with my personal experience as an agent of 10 years and a car fanatic.

I believe part of being an agent is your image, and a nice car is a big part of that (yes, the degree of this varies depending on your market). Now, don't go overboard and buy a new 7 series BMW if you've only closed 2 deals. Even if you have closed 50, there are plenty of cars that provide a good balance of look/style and affordability. You want to look successful. No one wants to hire an agent who looks like they're brand new and haven't sold any homes.

When I first started as an agent I drove a 2003 Dodge Ram pickup. After my first year (which went well) I upgraded to a C class Mercedes. Yes, it was a Mercedes, but it was 4 years old and was their cheapest model. I spent $24k on it - no more than a nice Honda Accord. I instantly noticed a difference in how I was treated by both my clients and other agents. They immediately took me more serious. It also gave me more confidence and put me in the right mindset, which in turn boosted business. It the "dress for the job you want not the one you have" type analogy.

From there I've gotten nicer vehicles and there is no question they help my business. Think about it this way - if you were hiring an attorney, would you hire the guy who drove up in a shiny S Class Mercedes, or the guy who pulls up in a 2005 Toyota Camry. I want the guy who looks successful. I know that not all successful people drive nice cars, but lets be real - the majority of them do. Even if you say you should be judged by your work, not your look - keep in mind you get judged first, before you even have a chance to show them your work. If you get judged harshly (ie crappy car, etc) then you may not get that opportunity. 

Also, if you have a cool car, it's a great conversation starter. I can't even begin to count the number of conversations that I've had about my cars with clients or potential ones.

As a RE professional you can write off car payments (at least a portion) and depreciation. Leasing is a good option too - I believe you can write off the whole payment. One tip - buy a car that weighs over 6000lbs to take advantage of the "hummer loophole" - you can depreciate the entire purchase in one year. Great way to offset some taxes if you had a good year of earnings.

Full disclosure - with all that said, I'm in the process of selling my current car and downsizing to a much more affordable one to cut my car expenses by over 50%. It has nothing to do with affordability - I have become obsessed with the BP site and have set a goal of getting to financial freedom in 3 years, so I am cutting expenses where I can so I can buy more property. I am also shifting my business away from the traditional realtor duties to investing (flipping, new const, etc).

[Aaron Hunt]

Originally posted by @Peter Stewart:

This is always a hotly debated issue. I'll chime in with my personal experience as an agent of 10 years and a car fanatic.

This post had me at car fanatic...and then there were no cars mentioned worth being a fan of. *womp womp*

[Aaron Hunt]

Originally posted by @Michael Plante:

so many answers are not addressing the OPs question

As an agent looking to get sellers to list with you, YES you need a nice vehicle.  But don’t break the bank

He’s right.

[Peter Stewart]

@Aaron Hunt I didn't mention any of my cars except the first since it's not really relevant to the discussion. If we want to talk cars though I'm happy to do so! I could chat all day :)

[Jared Maltbie]

I rented a car for the longest time. I always deducted it from my taxes . But now I drive around my an Orange 4 door Tacoma. But really, I rarely drive clients around. Most meet me at the property. Just depends on who you are working with. As long as your current car isn't a beater I'd say make some money first then by a like new car.

[Aaron Hunt]

Originally posted by @Peter Stewart:

@Aaron Hunt I didn't mention any of my cars except the first since it's not really relevant to the discussion. If we want to talk cars though I'm happy to do so! I could chat all day :)

Better not to mention enthusiast cars here. People tend to get flamed and shamed for it.

If you have a car that’s worth more than a lawnmower and you actually admit it here you’ll get a, “Do you even real estate, bro?” in response.