For Realtors, Spring and Summer are the most exciting time of the year. Now is the time to make hay. All the lead generation activity you’ve been doing the past few months is starting to pay off during the busy selling season.
You’re selling a lot of homes right now so you’re bank account is filling up. You’re feeling the sense of accomplishment that comes with accomplishing your sales goals
The feast and famine cycle of a Realtor business can be unnerving.
One of the biggest challenges I see Realtors struggle with is how to manage the money side of the business. For so many Realtors, the money side of the business is just so confusing.
I’m on a mission to change that so Realtors can keep more of their hard-earned commission checks.
I’ve spent the last month interviewing some incredible thought leaders in the Realtor Industry. Listening to their words of wisdom was like receiving manna from heaven. I’m super excited to share their thoughts with you.
Grab a notebook and get ready to take some awesome notes!
James Heinrich – Provide More Service Than You Get Paid For
One of the biggest mistakes I see Realtors make is they don’t have a systemized lead generation program. Consequently, they don’t know where their next lead is coming from. If you don’t know where you’re next lead is coming from you will never have steady cash flow.
Let’s face it, people. You’re in a business where your paid 100% on commission. You must have a system to generate leads.
People like it when you pay attention to them. You want to prove to people that you care about them when it doesn’t benefit you to care about them. You have to stay in touch with people.
You have to take the time to really get to know people. Ask them real questions. Get to know what is most important to them.
Continually following up with people is super important. It is the best way to secure their trust and build their confidence in you.
Most agents aren’t willing to do the follow-up work.
James Heinrich is the Managing Broker and Cofounder of 501 Realty. You can learn more about James at https://www.nestrealty.com/raleigh_durham/agents/james_heinrich.html
Wayne Salmans – You Can’t Outearn Stupid.
One of the biggest myth realtors have is they are going to spend their way to profit. If you can’t be profitable with 40 transactions, you won’t be profitable with 140 transactions. Many people think they can out earn the problem. If you are not profitable now, you won’t be profitable as you grow.
Most teams out there aren’t really making money. The worst part about the situation is they don’t even realize they aren’t making money. I know of some teams out there that have several hundred transactions a year, and they lose money every year.
People think that if you spend $1 on a marketing activity and you get $2 in gross commission income that you have a good return on your marketing activity. This is a fallacy. What you have to realize is once you factor all the money that you spend to sell a house, the $1 spent on marketing to generate $2 on gross commission income results in you losing money.
Most people don’t add up all the expenses related to their business when they calculate the return on investment from their marketing.
There is a tendency to chase the new bright and shiny object in the marketing world. Consequently, you lose focus and get less than desirable results from your marketing.
When you measure the return on investment for your marketing, you really should be targeting a 10X return on investment.
You really should focus on the 2-3 sources of revenue that generate 80% of your business. When you apply focus to your marketing, you will get the biggest bang for your investment of time, money, and effort.
There are different levers in your Realtor Business that you can push that will increase your profitability.
- Listings Lever – Take more listings. Listings are the gift that keeps on giving. It takes less work to sell a home that you list, so you make more money for the amount of work exerted.
- Shelf Time Lever – The longer a house stays on the market, the less money you will make from that house. Focus on ways to reduce the average number of days your houses are on the market.
Wayne Salmans is the founder of The Hero Nation. Find out more about Wayne at https://www.theheronation.com/
Kent Temple – You Have To Be A Business Person
Most people that become Realtors don’t have a business background. They become Realtors for a variety of reasons. Most people that become Relators think they are salespeople. If they continue to think as themselves as salespeople, they will never graduate to becoming a Realtor Business Owner. The real money goes to the Realtor Business Owner.
The statistics show a very grim reality. 66% of Realtors fail out within 24 months, and 84% fail out within 48 months.
Most Realtors are bad business people. If you want to be successful in your Realtor Business, you have to become a good business person. You have to learn and develop the skills of a business person. This will require you to change the way you approach your Realtor Business.
Let’s be real for a moment. You’re in business to make a profit.
Most Realtors don’t treat their business as a business. 99% of Realtors don’t even have a P&L Statement. If you don’t have a P&L Statement, how can you determine if your business is profitable?
Lots of Realtors fail out because they are bad lead generators. They also spend more money than they make. You have to keep your money accountable.
You need to have a good money management system. You need to have your finger on the pulse of your business every month. If you don’t keep track of your money, you will lose it.
If you are a brand-new agent, talk with the top agents in your office. Buy them a cup of coffee. Ask them the following questions:
- Where do you save money?
- Where do you spend money?
- What should I spend money on?
- What did you spend money on that you wouldn’t spend money on again?
Become a student of The Millionaire Real Estate Agent (MREA) book. Many people think MREA is a Keller Williams book. It’s not. MREA is the definitive guide on how to build a successful Realtor Business. No matter what level you are in your Realtor Business, MREA will give you the guidance you need to be successful.
Kent Temple is a Keller Williams Franchise Owner. Find out more about Kent at https://www.thetempleteam.com/about-us/
Dave Jenks – You Can’t Have a Bottom Line Without a Top Line
The whole game of a Real Estate is business is about your reputation. Your success is directly tied to the mindshare that people have of you. When I say mindshare, you want to be the first person someone thinks about when they think about buying or selling their home.
The biggest challenge agents have is generating business. You must become a master of lead generation. With lead generation, there are two avenues to consider.
- Prospecting – This is where you have direct contact with customers.
- Marketing – This is where you send out a message to attract people to contact you.
Many agents find it challenging to generate leads because of their fear of rejection. Don’t take rejection personally. Rejection comes with the territory. You are just asking people questions. It’s your job to put yourself out there and generate leads.
Think about this scenario for a moment. You go to a restaurant to have lunch. A waitress comes to ask you if you would like a drink of water. You reply, “No.” Does the waitress get upset and take it personally that you didn’t want water? No, she doesn’t. Then why should you take it personally when someone says no to you about your sales offer?
You must have a mind shift when it comes to promoting yourself. You have to be more assertive and ask people for business.
There are lots of good techniques for mastering the lead generation game. Learn and develop the skill of lead generation.
The most important technique you must master is building your database. You should be consistently adding ten people a week to your CRM. Every time you meet someone get their name and phone number. Find out what the person loves to be called. Asks questions to learn all you can about what is important to the person.
Next, you have to have a system for capturing the information you got from the person you just met. I suggest you create a voice memo on your phone within the first five minutes after you talk to a person. Record all the information you can now before you forget what the person said.
- What school did they attend?
- What are their hobbies?
- What is their dog’s name?
- Where did you meet the person?
Once you’ve captured the information, send the voice mail to your assistant to populate the information in your CRM.
Now you begin your systemized follow up process. Call the person back within two weeks and remind them of where you two met. Ask them how they are doing and find out one way you can help the person. Then do that one thing to help the person.
You have to build a relationship with people. Once you build a relationship with people, you will develop a reputation. Once you have a reputation, you will start to get referrals because people will trust you are the best Real Estate Agent.
For over 40 years, Dave has been a promoter of individual freedom and service-oriented enterprise. To find out more about Dave go to http://www.davejenks.com/
Damon Yudichak – Pay Yourself First
My first two years in busienss were a financial disaster. I earned more income my second year then I did my first year. However, I spent more money during my second year than I did my first year. The result of this money mismanagement was I lost more money in my second year than I did in my first year.
As I was wallowing in self-pity, I came to a profound realization.
The reason I was failing financially was because I wasn’t paying myself first. The pay yourself first philosophy had worked wonders for me when I was in corporate life, so I knew it had to work in my business life.
I immediately went to the bank and opened up a new bank account that I called my Damon Bank Account. Then every time I received a customer payment, I moved ten percent of my income to the Damon Bank Account. When I earned $1,000, I moved $100 to my Damon Bank Account.
I am astonished how that simple decision transformed my business. From that day forward, my business has been profitable, and I have received a paycheck.
If you think putting 10% of your gross commission income is too much to put in your pay yourself first bank account, start with a smaller amount. You could try one of the following methods.
- Start with 1% of your next gross commission income check.
- Start with $500 of your next gross commission income check.
- Start with $100 of your next gross commission income check.
- Start with $1 of your next gross commission income check.
Start with a baby step so you can develop a habit of paying yourself first. Once you get comfortable with the first amount of paying yourself first, increase the amount of your gross commission income check that goes to pay you first.
Decide that from today until the day you die, you will always pay yourself first.
I promise you that paying yourself first will transform the money side of your business and your life. After all, you’re doing all the work to earn the money. Don’t you deserve to get paid first?
Damon Yudichak is the world’s first Mastery Level Certified Profit First Professional focused specifically on working with Realtors. To learn more about Damon go to https://www.damonyudichak.com/about/
Conclusion
Well, there you have it. The money side of your business doesn’t have to be complicated. You now have a wealth (pun intended) of information to take control of the cash you work hard to earn in your Realtor Business.
Pick one thing from this article that resonated with you and do it for the next 30 days.
You can crush this!!
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