You often hear that real estate success is easily reduced to a numbers game. Numbers are bandied about and used to show that if you just follow any system, you can not fail. The numbers also indicate that 8 out of 10 do fail.
There is no truth to that statement that if you follow any system you will be successful! The truth is found when you understand what the numbers are and how they truly relate to what you are analyzing and if the system you choose is something that caters to your strengths as an agent.
If you are blind folded and someone places a basket with 100 pieces of fruit before you and asks you to identify each piece, you can come up with interesting numbers.
Let’s say 84 of the pieces of fruit taste and feel like an apple, 12 pieces taste and feel like a pear and 4 pieces taste and feel like an orange.
Some will say that 84% of what you tasted was an apple, which is a fruit. Therefore, 84% of what you were tasting was fruit. Of course, on some levels, that is true, but it is also true that 12%, 4% and 100% of what you tasted was fruit.
How does that relate to real estate? Well, the NAR claims that they have found that 84% of people looking for a home begin their search online. This information is shared in different formats to indicate that apparently 16% search else where and you should focus all your energy developing on-line leads. Even with declining circulation rates, I can assure you that more than 16% of the people searching for a home use the classifieds in their search. 84% may begin their search there, but it is just as valid to believe that a large percentage of people seeking to buy a home pick up the local paper on the weekend. Don’t let the 84% number fool you into believing that you should focus only on the internet. You may not have the money and there are other ways to generate business so you can earn the money to increase your marketing budget.
Here is another numbers game. People selling any lead generation system proclaim that one in five of internet leads result in a sale. The agent/customer hears that and assumes that one in five leads that they purchase will result in a sale. That is not true. One in five will result in a sale, but that is based on overall statistics for all leads generated. That includes transactions that take place with agents that had no relationship with any lead generation system. You may or may not receive a lead that will close with you, but overall, one in five will close with somebody.
Trainers often exhort folks to pick up the phone and call people – friends,relatives, former co-workers and complete strangers. They say if you make 100 calls you will get 5 appointments and if you have 5 appointments you will get 2 listings and if you have 2 listings you will make one sale. If you make on sale in your market and your average commission is $3000, you will be earning $30 with every phone call you make. Surely leaving a bitter taste in the mouth of 95 people is worth that commission check. Or is it? They don’t tell you that once you have called friends and relatives enough times, your number on the caller i.d. will result in you going straight to voicemail. (People really do check and you can’t hear them say – It’s John again…I really don’t want to be pumped for customers again.)
Now that is a fast talking way to send new agents to phone banks and late nights. It is the way to get agents to pick up scripts, head for the phone “loaded for bear, headed for despair.” These are general numbers that do not reflect the individual skill level or comfort level of any agent.
They are not exactly the truth. Trainers will parade 2,3,4 or 5 agents out that have done the drill and been successful, but they are window dressing. Don’t believe the numbers. Your experience will be reflected by your numbers after you undertake this sort of mission. Remember, it is your choice, your relatives, your friends, your former co-workers and a large group of folks you have never met.
I have read that 80% of the agents that enter the business fail. 80%!!!
If 80% fail, that would indicate that 20% succeed. The failure rate for second year agents is over 50% before they hit their 18 month mark. It sort of makes you want to pause and consider what system you choose. 100% heard all these numbers. I do not believe that 80% did not have the skill sets necessary to succeed. I think they listened to the numbers and became just another statistic. They were overwhelmed with the large possibility of failure and began scrambling without a concrete marketing plan.
Bottom line. Analyze everything you are presented with. Dig inside numbers and statistics and ferret out the truth. You should do this in the beginning of your career and start with your marketing plan.
This should be an annual plan. You may experience short term results but they have to be included in the yearly results. A sale completed in January has no more weight than one completed in December. If you want to shorten your marketing plan, you will be impeding your success. If you are short on funds, market in ways that carry no financial costs. No marketing plan will save you, a good marketing plan will sustain you.
Determine how much money you will invest in marketing. Set a return on investment target and track your results. You will find that you develop real numbers regarding your efforts and they will not be a game.
Results can only be measured annually. It is pure folly to purchase 3 leads and expect a return immediately. It is nonsense to do any farming for a month or two and expect results. The 80% that fail in this business more than likely did not understand or comprehend…it is a business. You have to have adequate funds to support yourself until the business generates enough revenue to support you.
I am not a fan of bludgeoning strangers with post cards, phone calls and knocks on the door. I do believe that if you put yourself in places where customers can approach you on their terms, you will have a better chance of succeeding.
If you fail to plan, you have planned to fail. You can not succeed long term on hit or miss methods, regardless of what the numbers appear to indicate.
The only number in the game that really matters is ONE. You are ONE agent attempting to build a career. It can be done, but this is no numbers game.