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The most successful real estate agents are able to answer these 5 questions quickly and accurately. Finding the answers to these questions will help you to ensure you are maximizing your potential.
1. How much do leads cost?
This is something all agents should be aware of. Are you paying attention to the dollars spent on lead generation? How many services do you use and are you conducting reassessments on your lead generators every 6 months to a year? Are you researching the newest ways to generate leads? If you aren’t, you should be. Analyzing your cost structure will help you better maximize your lead-generation costs (and success).
2. Are you maximizing profitability?
The town car you rented to show the buyers around who were in from Abu Dhabi. The sushi that you catered for the open house. These are all things that we as agents seem to overlook when closing a deal and getting paid our commission. And these are also the types of items that can add up quickly. Agents and brokers tend to go out all out when they have that premier listing and that is great, but try and cut costs where you can. For example, if you are by yourself and meeting clients at that newly-listed $20 million townhouse, give yourself enough time and take the bus. You will thank yourself at the closing table.
3. Do you prepare a formal annual budget?
Every January agents and brokers should be preparing a formal budget for the upcoming year. Included in the budget should be the estimated costs of transportation, marketing, and all the other ancillary costs associated with an agent’s business. The budget should be carefully planned out for the year using your recent history as a guide. Of course, an agent doesn’t know when they are going to land an ocean-front villa listing, but you should know what you’ve spent in the last two years and know if that was too much or not enough and make the proper adjustments to your budget.
4. Are you assessing your costs on a deal by deal basis
Again, very few agents do this. They get a ten of fifteen thousand dollar check and they rarely ask “what did this deal cost me?” Or “what should I be doing differently next time?” Some of these answers can be very tough to quantify, but over time you will begin to recognize a similar cost pattern and this will better help you with adjust your spending on a deal-by-deal basis.
5. Are your marketing expenses worth it?
Are you getting the most out of what you are spending? Would you still have closed that deal without that bespoke suit you just purchased? Throw in the Hermes tie and Prada shoes and you have got yourself a very nice wardrobe – and a very expensive one. Sure, there are a handful of agents who need (or think they need) these types of items. But you can look good for a lot less. Look for sales and buy suits and clothing off the rack. Find yourself a good (and moderately-priced) tailor.
How did you do? Were you able to answer all 5? Join the conversation by commenting below. We would love to know if there are any other key questions that you ask yourself.
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