A major disadvantage in the real estate industry is in the lack of understanding of minimum standards. In real estate, like other industries, there are known standards that agents can use to monitor their business and determine their effectiveness in the following areas:
• Time Management
• Prospecting Skills
• Listing Presentation Skills
• Buyer Presentation Skills
• Conversion Ratios
• Production Mix
The chart below lists the many standards that one must follow in order to build a business that can sustain itself through the ups and downs of the real estate market. Whenever you find yourself performing below the minimum standards in any category, you should immediately evaluate what you are doing and make the proper adjustments to get back on track.
Performing below the minimum standard in one category will often negatively impact performance in another category. Your ticket to success is to gauge yourself against the standards and remember when the fuel tank gets low; it’s time to fill it back up. Following the standards below will assure you a full tank of business at all times.
• Prospect for 2.5 hours per day
• 8 Prospecting contacts per hour
• 45 minutes of daily lead follow up
• Set 2 Listing appointments per week
• Set 2 Buyer appointments per week
• Listing appointments to listings taken ratio equals 40%
• Buyer appointments to contracts written equals 40%
• Listings taken to listings sold ratio equals 50%
• Buyer contracts written to contracts accepted ratio equals 40%
• Closing ratio for all pending transactions equals 89%
It is critical that the real estate agent follow the minimum standards throughout the entire year. The rewards are high when agents apply discipline to these standards. Research has shows the average licensed real estate agent only sells around 5 properties per year. That statistic is sometimes hard to believe yet check your local MLS statistics and you will see validation yourself. After years of coaching and leading real estate agents around the country, I have concluded that it is not the lack of ability of the agents that create poor production, it is the lack of guidance, discipline and leadership that create poor production.
The following charts explain the average production of an agent who adopts our minimum standards in their business. The term minimum is used to show you the unlimited potential this business as to offer. Real estate agents performing below the minimum standards need to evaluate their weaknesses and work to improve them immediately. Before long, you will perform above the minimum standards and find yourself on the list of Top Performers in your market and likely the industry as a whole.
Weekly Activity (5 day work week)
- 12.5 Hours Prospected
- 100 Contacts Made
- 2 Listing Appointments
- 2 Buyer Appointments
- .8 Listings Taken
- .8 Buyer Contracts Written
- .4 Listings Sold
- .32 Buyer Sales
- .64 Closed Sales
Monthly Activity (4 weeks worked)
- 50 Hours Prospected
- 400 Contacts Made
- 8 Listing Appointments
- 8 Buyer Appointments
- 3.2 Listings Taken
- 3.2 Buyer Contracts Written
- 1.6 Listings Sold
- 1.28 Buyer Sales
- 2.56 Closed Sales
Yearly Activity (12 months worked)
- 600 Hours Prospected
- 4800 Contacts Made
- 96 Listing Appointments
- 96 Buyer Appointments
- 38.4 Listings Taken
- 38.4 Buyer Contracts Written
- 19.2 Listings Sold
- 15.36 Buyer Sales
- 30.72 Closed Sales
What does this really mean?
For example only:
Average sales price in your market. $200,000
You receive a 3% commission. $6000
You close 30.72 sales. $184,320
You receive 60% split from company
Minimum Income – After Split $110,592
What does it mean to do more then the minimum?
For example only:
Average sales price in your market. $230,000
You receive a 3% commission. $6900
You close 50 sales. $345,000
You receive 70% split from company
Minimum Income – After Split $241,500
If you are looking to ‘just get by doing the least’, follow the minimum standards and you can earn good money. For those willing to treat real estate like a ‘career’, you can earn as much as you want. The example above illustrates the income growth potential an agent can experience when they do a little more then the minimum. Ask yourself this question; are you a person who likes to do the least they can or are you the person who likes to excel in what you do? Your income will depend on the inspired action that you apply to the answer of that question.
If you were to interview hundreds of Top Producers around the country, you would find some simple characteristics that many of them share. They say that it is those simple things that make the biggest difference in their business. We suggest that you consider implementing the next set of standards if you are committed to be a high income earner. These simple standards are not required to get the minimum, it is only necessary for those who want the most.
• Start everyday prospecting at 8:00 am
• Follow the morning ritual
• 45 minutes of daily lead follow up
• Role play your scripts 30 minutes each day
• Exercise 30 minutes before work
• Enroll in automobile university. Listen to tapes in car.
• Participate in a mastermind group
• Read your business plan daily
• Work off a daily checklist
• Set a daily goal
It has never been more important to set and meet the minimum standards of a professional real estate agent. One of the most common reasons that an agent fails to set and meet standards is due to no or poor training from their company. You have to accept responsibility for you business and make sure you are in an environment that will support your desired growth. Believe it or not, I have helped agents turn their careers around in less than 90 days. Take a moment and set your standards and meet them tomorrow.