For real estate agents, the sky is the limit in terms of income and earnings. It is one of the top reasons many will choose this career.
One of the reasons for this is that there are so many ways to get clients, earn money and succeed as a real agent. However, like most things in life it’s not really WHAT you do that matters. It’s HOW you do it.
With the millions of money making activities for real estate agents out that, what are the ones that make the most? The ones that make the most money are more standards, rather then activities. Moving your business from the WHAT to the HOW. Bringing your bank account from the RED to the BLACK and your career from the BOTTOM to the TOP!
THE 6 THINGS THAT WILL MAKE YOU THE MOST MONEY AS A REAL ESTATE AGENT
Raising The Bar – Your average sale price that is…
Commission for real estate agents is earned typically as a percentage of the sale price of a home. Meaning; the more expensive the house, the higher the commission. Without necessarily changing the amount of work. So this should be the easiest one to understand and should be one you are immediately looking at implementing.
For easy numbers, let’s say the average sale price of homes you are selling is $100,000 and the average commission you earn per deal is 3%. For each home you sell, you’d make $3000 (before taxes, brokerage costs and other deductions of course). So if your goal is to make $100,000 this year you would need to sell 33.33 homes to meet your goal
($100,000 earnings / $3000 average commission = 33.33 deals)
If you were selling homes that were worth $200,000 you would only need to then sell 16.66 homes to earn that same $100,000
($100,000/$6000 average commission = 16.66 deals)
Are you picking up what we’re putting down here?? So, how do you raise your average sale price?
Level up your lead generation game. Do everything you are already doing for lead generation but focused on higher price points.
It can be a slow process, so buckle up. Like anything worth while it will take patience and persistence, but will be worth it.
NEVER Discount Your Commission, heck… you should raise it
Knowing your worth as a real estate agent is the most necessary skill you will ever need. With all of the secondary options out there such as discount brokers and for sale by the owners it can be tricky. But earning a good commission doesn’t have to be hard, you just have to fight harder for it. In order to do this, and do it well you will need:
A comprehensive and solid marketing plan. When you know what you are doing and how valuable it is, you can convey that to a client and help them realize that it’s worth it. This plan doesn’t and shouldn’t be all fluff and fancy either. What actually sells homes in your market? Know what those things are, do them and then provide your clients with an outline of everything you plan to do and why it works. So that means you’ll have to most certainly…
Know Your Stuff. They say that knowledge is power for a reason. Show your clients that you are well versed on the process, the market and the strategy to sell their home for the most amount of money in the least amount of time. Then follow through.
Talk About The Money Last. Remember those old vacuum salesmen that used to go door to door? They would come in, put on a fabulous presentation showing you all of the wonderful things this miracle working vacuum could do. Have you feeling as if you didn’t know how you ever lived without it. By the time they laid the price out on the table you were already signing the paper. I’m not saying you have to go all sale-sy or play smoke and mirrors with your clients. What I am saying is, when you spend the first part of your meeting showcasing your worth, by the time you are done talking, they should believe you.
Be Willing to Walk Away. Some people will tell you to never walk away from a deal. Those some people are doing 33 plus deals a year and making the same pay cheque as others doing half that. I am not saying that you should never cut your commission. There are perfectly acceptable instances where this makes sense for a real estate agent. What I am saying is, once you make reductions a habit it’s hard to come back from that. Knowing your worth and knowing when someone doesn’t value you worth are key skills. Some one who is going to nickle and dime you at the beginning of your relationship will more then likely do it throughout the balance of your relationship. Besides, if you can’t even negotiate your own commission, how in heck are you going to negotiate a good price for their house?
Work Smart AND Hard – Doing it all doesn’t mean getting it all
Although there are a ton of exciting things to do to grow your business as a real estate agent, it’s not a good idea to try it all. Choosing a few things and doing those few things consistently and well will pay off better in the long run then doing more. Over exerting yourself and your resources will put on the fast track to quitting on all things. Pick two to three things you know you can do. Do them well and make them a part of your habit and routine before even thinking about implementing a new marketing or lead generation strategy. Working smart, and working hard will you more in energy and in cash.
Manage Your Money Well
Speaking of cash. The biggest killer of any real estate career is poorly managed finances. Working on commission is very difficult at best. Creating and staying on a budget can seem nearly impossible at times when you may not know when your next cheque will arrive. That doesn’t mean you can’t or shouldn’t do it. Knowing how much you need to survive and how much you need to earn in order to do so is vital. Speaking with a financial advisor will help you find and keep strategies to budgeting on an irregular income. Further, you should never! And I mean NEVER spend your tax money. Although it at times can be tempting to “borrow” from it to make ends meet know that it is a recipe for disaster. Thinking you will earn more and pay it back is the wrong mindset to have. It is NOT YOUR MONEY. If you think the temptation may arise find strategies to remove the money from sight immediately by putting it in an inaccessible account or paying it direct to the government the moment you receive it. Learning about, managing and being responsible with your finances as a real estate agent will be one of the most important things you ever do throughout your real estate career.
Lead Generate Even When You’re Too Busy
Being “busy” is a syndrome many real estate agents suffer from. The high you get from having so many clients to service and so many deals to do is highly addictive. The challenge you will face when suffering from this syndrome is while you are “busy” working IN your business, you forget to work ON your business. No matter how busy you are, you must always remember to lead generate every single working day. No matter what. If you stop doing this, once the deals that have kept you busy are done you will have nothing. Protecting yourself from the ebbs and flows by lead generating even when you’re busy (every single day) will help you to continuously have income coming in. Earning more over time then other real estate agents that don’t.
The Fortune is in the Follow Up – Literally
As a real estate agent and a real estate coach/mentor myself, I have seen so much money being left on the table when real estate agents (myself included) just didn’t follow up. A simple follow call or email to check in takes a matter of seconds yet can be worth thousands. A common response to lack of follow up from real estate agents is, “I didn’t want to bother them” or “I didn’t want to seem too pushy”. That’s fear talking. And if you’re afraid of bothering someone, I think you may be in the wrong business. Clients don’t know what they want or what they need. They have hired you or referred your services because they need you. THIS IS LITERALLY JOB. They need you to follow up with them and if you don’t, someone else will. In addition to daily lead generation you must incorporate regular follow up to all of your leads, past clients and other networks in order to remain top of mind and be the person they remember when they need to buy or sell.
Sounds like a lot of work doesn’t it? That’s because it is.
The average income earned by a real estate agent is directly connected to the effort they have personally put in. Doing all of these things consistently over time, while managing your time well will gradually lead to less work with more income in the long run. Without these systems in place, you will be left running the same rat race you left behind in hopes of enjoying the freedom and financial rewards of a real estate career.
How do you ensure you make the most out of your real estate career? We’d love to hear your story.
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