There are always days when you work in real estate where you wonder why you got into real estate in the first place. If I were to equate it to baseball, it’s a game of failure. As an example, a good baseball player used to hit .300 and that would mean he was successful 3 out of 10 times at the plate. 7 out of 10 times the batter does not have success. And, at the last game I went to players weren’t even in the .300 range, more so around .250 In real estate, there’s really no way to tell if you are successful like that, in the sense that there are no equal at bats. Let’s look at some ways real estate agents measure success.
- Total revenue generated This is where all the recruiting marketing dollars go. Get into real estate, make lots of money! It’s so easy to make money, you will literally be swimming in cash! As we’ve discussed before, that’s rarely the case. Because something is rare doesn’t make it not true, however. There are a few agents who do very well for themselves in any market.
- Appointments set The metric here is how many in home appointments did you get? The logic follows that the more appointments you are on, the more times you will get a sale. I’ve always been a little skeptical of this, because the appointment should have some relevance to your goal, and I’ve noticed this seems to slip. As an example, assume you are working on a big real estate team and you are the last person on the team and getting the worst leads. Leads are defined in this case as someone who’s left a phone number or email. You have no idea if the lead is qualified or not. So, you could be communication with loads of people who could never buy a house and have a significant number of appointments set.
- Closing percent If you look at it as a percentage, it gets kind of weird. As an example, if you go on 5 appointments and get 1 listing, that’s pretty good(20%), but what if you go on 20 appointments and close 4 of them? Your closing percentage is still 20% but you have twice the number of deals. Therefore, if you read that some agent has a closing percentage of 20 percent, that could be good or bad depending on the total number of appointments, which usually gets left out. One of the more recent books is touting closing percentages on a particular advertising medium at 1 to 2 percent, with an experienced agent at 3 percent. This is considered great.
- Marketing or advertising spend One of the more bizarre ways to look at success in real estate is to look at the total number you’ve spent on marketing and then determine that because you’ve spent a lot of money, you are therefore a success. I’ve never seen a business where this is a good idea outside of real estate, and I’m not sure where someone thought high expenses without any consideration of income is a good idea in real estate.
I look at success for our brokerage a little differently.
The other day I closed on a property. Closings are when the property is transferred from the seller to the buyer. In this particular transaction, I was working for the buyers, which made me the buyer’s agent. The length of the time for the closing was somewhat unusual, 60 days from offer acceptance. In that 60 days there were lots and lots of hurdles to overcome. There were ownership issues, title issues, financing issues, survey issues, and yet, with the help of my team, we were able to get the buyers a property that they will enjoy for many years. This is how we measure success at Deerwood Realty. There will always be challenges in real estate. It’s how you respond to those challenges that really determine success as a real estate brokerage in St. Louis, Missouri.