One hundred might seem like an arbitrary number of transactions, and it is. Yet, from our experience, it’s also an ideal milestone for real estate professionals looking for a more stable and productive business environment.
Still you may wonder, why not 50? Why not 200? Certainly, 100 is not the pinnacle and you shouldn’t feel bound to stick rigidly to this number by any means. However, 100 is our recommendation as a working blueprint for success; let us explain why that is…
First, what is your ultimate goal for your real estate career?
We assume that you want to make significant money to improve your standard of living and create a successful business, with as minimal headaches and disruptions as possible. That’s where 100 becomes a magic number in this equation – we have found that a minimum of 100 deals a year generates significant income, without stressing and worrying about the highs and lows of market conditions.
A typical REALTOR® hits the 4 to 6 mark, in an average year, and less than this in a major downturn. Depending on the geographic and economic market conditions, the average sale price sits around $300,000 per home. Therefore an agent may survive on 4 to 6 deals but when conditions worsen and that turns into 2 to 4 deals, bills cannot be met and another steadier source of income is immediately looked for and henceforth, the dream of selling real estate is over.
Meanwhile, some REALTORS® will manage approximately 20 deals in the same amount of time, and be considered a ‘big producer.’ Nevertheless, what we’ve discovered is the REALTOR® who is selling in the region of 40 to 50 homes is actually working twice as hard as someone closing 100 deals. Instead of working double-time as logic dictates, 100 deals is the answer to an easier and more profitable working life for you.
How is this possible?
Well, basically, at any number lower than 100, you’re simply not creating enough leads or revenue to support a larger team in your office and – in a vicious cycle – because you have less staff, you are limited in the opportunities available to you. Thus, you are hitting an invisible wall in the real estate biz – you can’t reach the 100 milestone as you don’t currently earn enough money to execute consistent, effective marketing, and, at the same time, hire the right administrative staff. Because you don’t have the personnel to handle and coordinate 100 deals, you can’t earn enough money to sustain the staff that you need on your team… And round and round we go!
Essentially, you’re holding yourself back – and that means you’re stuck in a rut where you’re doing most of the work.
How do you break through this wall?
It seems unsurpassable. An impasse to your future success as a REALTOR®. That wall of 10 deals needs to be broken through, then the 25 deals’ wall milestone, then the 50 deals wall milestone, and then onwards if you’re to reach your optimal performance level of 100 deals.
Like a long distance runner, sometimes you hit a ‘wall’ and need to run until you smash down this virtual barrier, and then the endorphins kick in and you reach that next level of energy – to keep going, and win the race. After you start to hit these deal milestones and look back you will surprise yourself that you ever did that few deals a year in the subsequent years to come.
Truly, once you reach 40 to 50 deals a year, it is one of the toughest places to be. Usually you’re putting in 12-14 hours a day – it requires all those extra hours from the leader; this is time spent away from making those deals! And there’s extra spending all round, yet you don’t see the big profit.
The low cycles are tougher, because it means cutting the spending and saying goodbye to some of your staff. And then things ramp up again, so you kick it into gear, and you hire the admin and marketing all over again. But, when that low cycle inevitably returns, team members are fired, spending is cut, and you’re constantly resetting to where you originally started.
This cycle exists whether it’s a new agent, with zero deals to their name, all the way up to those agents in the 40 to 50 range. You’re starting and stalling in this awful cyclical pattern, but it needn’t be this way.
Although, unfortunately, the ground isn’t much more stable in between 50 and 100 either – in fact, we rarely see any agents in this shaky ‘dead-zone’ between the 50s and the next league of REALTORS® in the 100 zone.
After you reach 50 deals in your past 12 months, set yourself a salary that you can pay your current staff, office, marketing, and living expenses and not a dollar more. For the following 12 months reinvest all of your profits back into your business. What to spend those monies on will be addressed later, but here is a quick breakdown of what you need to spend your excess NOI (Net Operating Income) on:
• Fill your staff with the quality personnel you need
• Marketing – websites, SEO, mobile exposure, PPC, social, print
• Smart technology – web based “cloud” software to build and manage your business
• Enhance client services – unique services you offer, transparency solutions to build trust
• Image improvement – office location, office furniture and signage, presentation room, logo upgrade
Why make this sacrifice? Because at 100 deals, it’s a sweet spot where the low cycles are less and high cycles are more. Once you manage to break through this wall, you ‘glide’ to 100. Your costs will remain more fixed and the staff you can make a significant profit with at 100 deals can nearly be the same size to do 150 – 175 deals.
Of course, breaking through the glass ceiling to reach the top isn’t something you can do without changing your game. You can’t do this on your own; you need the support of a team.
Also in this chapter: The do’s and don’ts of getting to 100 and how many team members do you need to achieve the 100 deal goal.
To learn more about or purchase “Blueprint for 100 Deals or More Than $1 Million Per Year in Income,” visit: http://www.blueprintfor100deals.com/.
Rick Bengson is the CEO and Co-Founder of ShowingSuite, Inc. a leading real estate productivity software company, and Co-Creator of HomeFeedback.com. Alan Shafran is the owner of The Alan Shafran Group, selling up to 175 homes per year. To learn more about “Blueprint for 100 Deals or More Than $1 Million Per Year in Income,” visit: http://www.blueprintfor100deals.com/
Editor’s Note: “Blueprint for 100 Deals or More Than $1 Million Per Year in Income: The exact systems and technology to sell 100+ homes, every year—no matter the market,” is a new book by leading real estate industry executives Alan Shafran and Rick Bengson that outlines how to build your business as well as make more money, please more customers and improve your overall quality of life, whether you are a novice or climbing the ladder in the real estate business. RISMedia will be running portions of each chapter every Wednesday, highlighting the in-depth information and invaluable resources the authors have compiled in this exciting, new publication.