Here is why you haven't made any money in real estate.

>> 03 November 2009

I got lost in my database yesterday...wasted a few hours actually...working to implement systems.
The reality is...we HAVE to get in to production. We spend so much time working to implement systems so that we can get business.....and the business gets written by someone else.

Now, I'm not knocking systems. I do believe as Gary Keller says, build a database and feed it every day. What I am knocking is our regular way of doing that. The MAPS BOLD program has taught me that really, we can build a database by making contact with anyone and everyone to find someone one or two or three or ten who intend to buy or sell TODAY.


You get what you focus on...and if you are focusing on building a will have a healthy address book and no business. When you focus on finding the people who are ready to list or write a contract THIS week...then you will also happen to build a database.

We get so stuck in the systems of business that we avoid going to GET BUSINESS.

If you are a REALTOR, your job is to set an appointment today. Your job is to set an appointment every work day. You job is to set MASSIVE amounts of appointments with motivated buyers and sellers. This one appointment a month won't cut it and I'm here to show you the truth about that:

Look at this reality.

  • The average conversion rate for contacts to appointment for an agent 1 year or less in the business is 125 contacts =1 appt.
  • If you make 5 contacts a day it will take you 25 days to get an appointment.
  • The average conversion rate for an new agents appointment is 4 appointments to a sale.
  • That means that it will take 100 days to get 4 appointments to get 1 sale.
  • in a year there are 14.6 25 day periods.
  • Divided by 4 = 3.65 deals a year.
  • With an average sales price of 200k and 3% commission. That looks like $21,900 GROSS commission...
  • then the split at 70% (this doesn't include royalty and coaching fees) leaves you with $15,330. Oh and then take off 20% for taxes.
  • That is a WHOPPING $12,264 net earnings on 5 contacts a day.
NO wonder people get out of real estate so fast.

Asking 5 people a day simply won't cut it.
Lets do the same formula with the average agent 1-5 years in the business.
62 appointments to a contact.

  • That is an appointment every 12.4 days of prospecting.
  • = 49.6 days of prospecting for a sale.
  • = 7.36 deals a year.
  • = $44,160 in GCI,
  • =$30,912 after a 70% split (not including royalty and coaching fees)
  • =$24,729 after 20% taxes are paid.
  • HELLO.....Go get a job at a retail store for 40 hours a week.

In the SHIFT...Gary Keller's 1st tactic is GET REAL GET RIGHT.
People....get real. and how you get right is get APPOINTEMNTS every day.

If you aren't getting appointments weekly then you aren't doing your job and so no wonder you aren't getting paid. Quit getting ready to get ready. Get your mindset right, and go get the business with massive action. The systems will come...and besides, when you have massive business due to your massive action, you can pay someone to do the grunt work for you.


Antoinette 5:49 PM  

Wow. WOW!!! Thanks for breaking down those numbers, Allison. It's kind of a big deal.

mark sweeney 9:56 AM  

What a wake up call, Thanks Allison I will be sharing this with my coaching clients.

Mark Sweeney

Anonymous 7:27 AM  

Thanks Allison,
that was great! I have great numbers to show my clients.
Pat Gildea

Sheila Garner 10:06 PM  

Allison .... Thanks for the statistics. Very helpful indeed!