Summer is the busiest time for real estate agents. So it is the perfect time to work on setting up your goals for the summer and getting all your ducks in a row so you can achieve them. Closed listings are not what create top producing real estate agents. The key to success lies in a large inventory of active listings, and the Listing Inventory Calculator will help you determine how many active listings you need at all times to achieve your objectives.
Why do you need active listings?
Active listings govern the entire real estate business:
- they generate leads
- they control a real estate agent’s ability to market him or herself
- they determine how many transactions he or she will be able to close overall.
If you are working mostly as a buyers’ agent, you will need to put a lot more time and effort into earning your commission. Between long hours showing multiple properties during the evenings and on the weekends, setting up and attending inspections, and dealing with the uncertainties of contingencies, finding time to promote your business and get more listings can be challenging.
With so little time on their hands, real estate agents that get most of their commission from the buyer’s side are limited to how many deals they can close in a month. That’s the reason why most successful real estate agents are often sellers’ agents.
By starting your quest for active listings early in the season, during the slow months of January and February, a real estate agent can hit the ground running when the buying frenzy of spring and summer arrive. However, a listing under contract is no reason to sit back and relax. To reach your goals, you must always have a reserve of other active listings to keep your business going.
As soon as you get a listing under contract, it is time to find one to replace it and keep the pipeline filled. This constant sense of urgency is what separates top producing real estate agents from low producers. By establishing new relationships with potential clients instead of relying on established clients, you can keep your inventory of active listings growing.
How many active listings do you need at all times to achieve your personal goals? That’s what the Listing Inventory Calculator will help you determine.
How to use the Listing Inventory Calculator?
This video has a detailed explanation, as do the instructions below.
The Listing Inventory Calculator helps determine how many active listings a real estate agent must always have in inventory to reach his or her desired income. The boxes highlighted in yellow on the grid are the ones that can be manipulated to match your situation.
Start by entering your yearly goal for the amount of gross commission income that you would like to earn in the Income I Want to Earn field and the Average Sale Price for a property in your market.
You can calculate the Average Commission Rate based on the total amount of your closings, both as a buyer and as a seller’s agent.
Based on your situation, you should be able to determine a realistic estimate of what percentage of your closings will be listings. Although the average is 50%, your number might be lower if you are just starting in the business for example.
Not all listings sell: some expire, some are withdrawn, some are just priced too high and sit on the market. Assume that 50% of your listings will sell for a conservative estimate.
The number of average days on the market for properties on your market can be found on the MLS.
Based on the numbers you entered, you will be able to calculate the number of listings you must carry at ALL times to make your goal. Don’t hesitate to play with the numbers to figure out what is a realistic objective for you.
Are you ready to find out how many active listings you must have to achieve your income goals for the new business year? You can find our Listing Inventory Calculator here!
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