[photopress:meeting.jpg,thumb,alignright] In answer to Russ’ comment on my post of this morning, How to Choose a Client, let’s break down how an agent can do a super-duper job at representing their clients’ well, choose their clients wisely, and also make a good living AND price their services fairly….all at the same time!
John Q. Agent wants to make a six figure income of $100,000 a year after gross expenses. He decides to work with no more than 2-5 active clients at one time, so that he can do “Whatever it takes” to help his clients fulfill their objectives. By focusing on 2-5 good-hearted, honest and serious clients, he is able to sell 2 houses a month and loses only 1 in every 15 clients he accepts to “take on”. By focusing on only 2-5 clients at once, he does such a super job, that he doesn’t have to pay for leads or spend the bulk of his time looking for leads, because his very happy, good-hearted clients send him business. By recognizing that he represents people for a living, and doesn’t sell houses for a living, he leaves a long trail of happy closed transactions in his wake. All of this “good will” brings him a steady stream of new clients, so he can spend all of his time representing his clients and very little of his time dredging the bottom of the barrel for “new leads”. His “good-hearted” and happy past clients, know other “good-hearted” people because, “birds of a feather flock together”.
Average home price is $400,000 in the Seattle/Eastside Market. That’s a little under the actual median price, but let’s assume that the best clients don’t necessarily have the most money 🙂 Let’s assume that John Q. Agent charges slightly less than 3% for clients buying and selling at $400,000 or less and 2% for clients buying at $750,000 or more and 1% for clients buying at $1.5 million dollars or so and also has varied programs in between, depending on the timeframe and actions needed to fulfill the client’s objectives.
So John Q. averages $13,500 per client, but gives $4,500 of that back, even after the reduced rate, on average, because he only needs to make $9,000 apiece X 24 sales (two a month) to make $216,000 of which he pays his broker a cap of $20,000 annually leaving him $196,000 before “expenses”. Keeping Russ’ figure at 20% for “expenses”, John Q. Agent exceeds his goal of $100,000 by making $156,8000 after expenses working with only 2-5 good-hearted, honest clients per month and selling 2 homes a month and “being the glue” that holds them together so ALL of them close, and it is NOT a numbers game…in fact, it’s not a game at all.
John Q spends 20 hours a week on his “in escrow” transactions and 20 hours a week on helping his “next to come out” listings get their homes ready and 10 hours a week doing all that other stuff that agents do. He spends so much time focusing on these few clients that none of them “leave him in the dust” or “screw him”. Though a few do decide not to buy or sell…and he wishes them well.
And they all lived happily ever after…