John D. Mayfield, ABR, CRB, e-PRO, GRI, is a sales coach, author, and broker/owner of Mayfield Real Estate in Farmington, Mo. You can contact Mayfield through his Web site, www.BusinessTechGuy.com.
4 Ways to Increase Your Income
If you want to boost your earnings in a tough market, follow these four steps for success.
July 8, 2011
Last year, the average annual income for a real estate professional, according to the National Association of REALTORS® 2010 Member Profile, was $28,100. Unfortunately, 46 percent of sales agents made $24,999 or less. Twenty-six percent made less than $10,000. Those are somewhat shocking statistics, and they don’t paint a great picture for people who may be interested in real estate as a future career.
Some might claim that the current recession is behind such low numbers, but in reality, they’re not that different today than they were five, 10, or 15 years ago. Unfortunately, the income levels as described above have always been around.
Here are four tips for increasing your annual income over the next 12 months:
First, have a plan. If you were driving across the United States to visit a friend who lived somewhere you had never been, chances are you would look up directions on how to get to your friend’s city, specifically the home address. Without a map or GPS device in your vehicle, it may be difficult to navigate.
Unfortunately, many real estate pros enter the business with no plan. Worst yet, most experienced practitioners I know have no plan! After investing hundreds (and sometimes thousands) of dollars, valuable time, and a grueling examination, many new recruits end up with a real estate firm that has no plan for the next 30, 60, or 90 days.
A business plan is essential in real estate. Without a solid plan, you’ll probably end up spinning your wheels. (For more assistance on planning, check out this article from REALTOR® Magazine.)
Here are a few things your business plan should address:
- What is your monthly budget? How much money do you need to earn to pay your expenses each month?
- Who and what is your competition, and how do you plan to differentiate yourself from your competitors in your marketplace?
- Take time to perform a SWOT (strengths, weaknesses, opportunities, and threats) analysis: What are your strengths and weaknesses? What new opportunities can you capitalize on during the coming months, and more specifically, what threats might you need to plan for? This is an excellent way to help you build an essential game plan, gain vision, and accomplish your mission.
- What are your goals for the next 30 days, six months, and full year from your start date or from the date of your business plan? Make sure your goals are measurable. Though your goals should be challenging, don’t make them too difficult to reach.
- Do you have a vision statement for your business? Where do you see yourself in the next year as a real estate professional? If I asked you to look into the future, where do you want to be in three years in the real estate industry?
Do you have “action plans” in place for your real estate business? In other words, what programs do you have ready to implement when you begin to meet new customers, enter into contractual agreements with clients, and more? Top agents have a systematic plan of action for every facet of their business. If you have not taken the time to develop a detailed plan of action for each area of your business, then do it today.
When building your action plan, use an outline and list all the items that you plan to do for each new listing you take. One good way to build action plans is to copy or print out three or four calendar pages and determine when and how often you would like to communicate with your clients. What marketing endeavors do you need to implement over the course of the agreement? Just as you need a “business plan” for your business, each new listing and every new buyer you take on needs a separate business plan.
Work Your Sphere
According to the National Association of REALTORS® 2010 Profile of Home Buyers and Sellers, 57 percent of first-time home buyers found their real estate agent through the recommendation of a friend, family member, or coworker. Thirty-nine percent of all buyers and sellers said they found their agent through this process.
If this data does not reinforce the fact that you need friends and family members recommending your services, then please reread those statistics above. Working your sphere of influence is one of the best things a real estate pro can do regularly. Send cards and letters each month, make phone calls, and, if the opportunity arises, stop by and make a personal visit.
If I asked when you last went out and canvased a neighborhood handing out cards or providing information about your real estate services, what would your answer be? How many for-sale-by-owners have you visited or sent letters to in the last 30 days? Whatever method you prefer regarding prospecting as a real estate professional, it should be one of your most important daily tasks.
Prospecting is the lifeblood of a successful sales career: Without new business, you’ll eventually go out of business. Make it a point to set goals on what types of prospecting you’ll do for the day, week, or month. Keep track of your schedule and determine where you’re wasting time, and make any necessary changes to accomplish your prospecting goals. Also, be sure to write your prospecting goals down where you can see them and be reminded of your tasks at hand.
Finally, don’t get discouraged or have a pity party if things aren’t going as planned. Difficult days and trying times will affect everyone. Even when you have a map or printed directions, wrong turns, bad decisions, and other factors can cause you to get off course.
However, the key to increasing your income as a real estate professional is to remain diligent and do the right things. When you have a solid written business plan, set goals, prospect daily, and have a good attitude, you’re sure to succeed. Remember what author E.D. Martin said, “It is easier to believe than to doubt.”