Which Metrics Matter?
Last week we talked about your clients definition of success. This week it seems only fitting that we look at YOUR definition.
The beauty of real estate is that you can create a business that fits with, and supports your life. The trick, though, is holding on to what you decided is the right goal vs what someone else decides it should be.
When I first started, everyone said that my goal should be selling 1 house a week. 50 houses a year sounded like a good plan. For years I worked towards that. Until I realized that it was someone else’s goal – not mine.
I tend to work in waves. There are many weeks that I don’t sell anything. And then there are weeks where I sell 3 homes in a weekend. That actually works better for me. I like the ebbs and flows that come with doing business that way. When I’m on, I might as well pile it on, and then I can take time off and travel or do something else.
I also realized that 50 houses isn’t a number that works for me. I can sell 30-35 properties a year with at most a part time assistant. It keeps my overhead and my stress low. Getting to 50 would require more of a team, which for me isn’t the right move. At least not right now.
So how do you decide what success looks like for you?
Certainly there is a dollar figured involved, but that is only the tip of the iceberg. There are so many other metrics to measure:
- Baseball games attended
- Walks taken
- Date nights enjoyed
- Travel to new places
- Laughter shared with friends
THESE are the metrics we should be using to measure our success. Yet, they can be easy to lose sight of, or postponed until a later date.
Post these somewhere to remind you that it’s just as important to fit these into your daily life as it is work. Then start thinking about the how you are going to make it happen.
When Buyers are searching for a home, they have 3 main criteria that they work with: Price, Condition, Location.
As agents, we also have 3 variables to achieve our goals: Price, Commission, Volume.
There are 3 ways to make more money:
- Sell more expensive properties
- Charge a higher commission rate
- Sell more properties
Each one has it’s own pros and cons and some might feel more doable than others.
For me, I’m happy with my commission rate, but each year I try to increase my price point. It’s something that I think agents don’t pay enough attention to. But look at the math:
Let’s say your average price point is $400,000 with an average commission of $12,000 and you sell 20 homes a year. That would give you a yearly income of $240,000.
What if you increased your average price to $500,000 and an average fee of $15,000? You could still sell 20 homes and now you would be making $300,000 a year. That’s an extra $60,000 for the same amount of work!!!
Even if you only increased your price point by $50,000 it’s an extra $30,000 over the course of 12 months.
Small increases can have a huge impact on your bottom line. It doesn’t mean you have to be an uber luxury agent.
Price point is a metric that most agents overlook, or feel like they are powerless to affect. Stay tuned for next week’s blog post and I’ll share some tips for increasing your price point.
To your success!
Nicole