If you’re like most agents, your selling targets will be set in terms of number of sales per month and/or commission earned. If you are underperforming, you’ll be politely urged to GET MORE LISTINGS!
While this has the benefit of making the Sales Manager feel like they’re doing something, it doesn’t actually help a great deal. This is because there are a finite number of sellers and plenty of agents who want their listing, just like you.
So what can you do?
You need to understand that your income actually relates to three factors:
- Your average commission per sale
- Your percentage of listings converted to sales
- The average number of days on market per sale
Let’s assume you cannot do much about number 1. This is related to your marketing area and specialty. You might be particularly good at selling cheap units. Terrific – concentrate on that. I assure you it is a lot easier and more profitable than selling the occasional expensive house at a rock bottom commission rate.
The listings/sales conversion ratio is absolutely vital. You could have ten listings and sell one, or have two listings and sell two. Which makes you more money? More to the point, why do you have a lot of listings that aren’t selling?
Chances are it is because you’re overpromising (overquoting) and underdelivering (hoping the vendor will come down in price notwithstanding all the porkies you’ve told). And no – saying that “everyone is doing it so I have to too” is not a good justification. You need to read Chapter 3 of my book – ‘Pricing made easy’ – to learn how to fix this problem and start selling ten listings out of ten.
Even more important is the average number of days on the market. My average was less than three weeks – I’m not exaggerating. It is possible.
The industry average across all sales is actually approximately two months, but in some areas it is much, much worse, notwithstanding all the self-deluding nonsense spouted. You can easily check the average number of days on market in your area using RP Data’s figures.
First, the property MUST be listed and marketed at the correct price. The vendor has to understand that asking for more means much longer on the market, which equals an eventual price LOWER than what they should have got.
Because when the first rush of buyers is gone, there is less competition, the property becomes jaded, and they end up having to negotiate far more than they should have.
Second, the property must have all its major advertising done at the beginning of the campaign to bring about the most competition.
Third, you have to set and control vendor expectations. You tell them precisely what will happen.
“In the first week, I will bring through my best known buyers. I will advertise everywhere we agreed and bring in everyone who is looking. By the second week, we will know who the keenest buyers are. We will give them time to reinspect, and then see how much they are prepared to offer. By the third week, we will have sold.”
They now want and expect the sale to happen in this time frame. All you have to do is follow through. Believe me, it really works.
However, it is critically important that you are in constant contact (this means every day) either in person, or on the phone, or in writing. And when you say you will do something – do it. So if you say you will call at 6pm, call at 6pm, not five to or ten past. If they can trust you on the small things, they will trust you when you say, “This is the best we can get and I recommend you take it”.
Remember, the more of a reputation you get for making quick sales at the price you said, the more listings you’ll get, the faster they’ll sell, and the more money you’ll make. EASY!