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Are Your Buyers
Costing You $76 an Hour? Over the years I've had the privilege of asking thousands of practicing real estate professionals whether they prefer working with buyers or sellers. The majority of Agents proclaim that they'd prefer to work with sellers but for many reasons they're forced to serve the needs of their buyers. They typically feel that the lion's share of their income comes from buyers and to walk away from that would be financially devastating. MOST AGENTS FEEL BUYERS PROVIDE THEM WITH NEEDED INCOME In fact, I believe the reason most agents aren't making the kind of money they SHOULD be making is simply a mathematical issue. (OK, there are some psychological and time management issues here as well.) First the math...I'll try NOT to lose you here. In 2005 NAR surveyed nearly 8,500 individual agents from across the country to come up with their data for an overall Member Profile. Here's a sample of what the survey found out about agents... The average agent; ...worked 46 hours per week (50 weeks per year) ...earned $49,300 per year (gross income) ...and did 12 transactions (6 buyers/6 sellers) By dividing the gross income by the number of hours worked you'll find that the average agent earns roughly $21.43 an hour. It gets even worse when you figure in the estimated $8,200 in expenses that the average agent spends each year. AGENTS ONLY EARN AN AVERAGE OF $21.43 PER HOUR Unfortunately, the 2005 Agent Profile didn't go a little further by asking its respondents how they spent their time. I think this would have been a wonderful question and incredibly helpful to all the other agents. What a shame. The good news is I'm here and I did. I asked that question. I've asked my students lots and lots of questions. And for the most part my students are pretty average. At least that’s how it is in the beginning. (I don't pretend to be average and my students are absolutely ABOVE average after working with me for a short while.) The most important question that I think I asked them (and still do) has to do with how they focus their time. I make it easy by asking them to tell me what percentage of their time each week is focused on sellers, buyers or other stuff. (Anything that isn't serving the needs of your buyers and sellers can be conveniently lumped into the 'other stuff' category.) HOW DO AGENTS REALLY SPEND THEIR WORKING HOURS? Here's what I've found out about how agents spend their working hours... ...11% are spent working with Sellers ...48% are spent working with Buyers ...31% are spent working on Other Stuff The interesting thing to take note of here is that the average agent spends 400% more time with Buyers than they do Sellers yet they earn an equal amount of money from each overall. In other words the average agent spends barely 5 hours of each week focused on working with sellers yet earns half their income doing so. The other half of their income, the buyers, takes up 22 hours of each week. 50% OF YOUR INCOME COMES FROM JUST 11% OF YOUR EFFORT Half of their income came from 5 hours spent working with sellers and the other half of their income came from 22 hours spent working with buyers. Kind of odd isn't it? Do the math and you'll find that the income generated by working with sellers is an astonishing $98.60 per hour while the average earned working with buyers is a dismall $22.41 per hour. A difference of just $76 per hour worked. So here's the real question; if you knew you were losing $76 for every hour you spent working with buyers, would you keep working with buyers? I didn't think so. YOU'RE LOSING $76 FOR EVERY BUYER HOUR WORKED Focus on working with sellers and you'll make a whole lot more money. Or just stop working with buyers and spend more time home with your family. You'll be happier and so will they. Either way you’re bound to start making more money.
Scot Kenkel is the President of the Success Learning Institute, LLC, an organization focused of promoting Success through Learning. Scot’s a self-professed, recovering dad-a-holic, training humorist, and overall smart guy that’s been involved in edu-taining small business owners and professional real estate agents for over 15 years on how to grow their businesses using cutting edge sales and marketing techniques. Scot’s style of teaching is energetic, fast-paced, down-to-earth, easy-to-follow, sometimes hilarious and always informative. Find out more about Scot and his other topics and courses by visiting his web site at www.SuccessLearningInstitute.com. You can also contact Scot directly by email at 'Scot@SuccessLearningInstitute.com' or by calling his office at (888) 831-5945.
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