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80/20 rule in real estate?

By Kevin Raymund Lao Jacinto

Real Estate Agent with Coldwell Banker Pioneer Real Estate

April 14, 2007 03:40 PM

Hi I'd like to talk about what is known as the 80/20 rule. For those that don't know about this principle ..." In 1906, Italian economist Vilfredo Pareto created a mathematical formula to describe the unequal distribution of wealth in his country, observing that twenty percent of the people owned eighty percent of the wealth. In the late 1940s, Dr. Joseph M. Juran inaccurately attributed the 80/20 Rule to Pareto, calling it Pareto's Principle. While it may be misnamed, Pareto's Principle or Pareto's Law as it is sometimes called, can be a very effective tool to help you manage effectively." (F. John Reh)

I was wondering if anyone had heard about the 80/20 management system. And for those that have used it, how effective is it? How can an agent use this to maximize results? Thank you.

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Beth Bastian

Rosemont Financial Inc - Simi Valley, CA

Simi Valley Real Estate

I think it is not the 90/10 rule for real estate. I think it is dead on, about 10% of what I do really makes me money, I am just having a hard time dealing with the other 90%.

Apr 14, 2007 03:44 PM

Vicky Carlton

Cincinnati, OH

Comey & Shepherd, Auctioneer - Greater Cincinnati

I really don't know anything about it, but I'd love to hear what you learn about it!

Apr 14, 2007 03:50 PM

Roger Stensland

Keller Williams Realty Puget Sound - Maple Valley, WA

Let's Move!

I think that this is referring to the fact that 20% of the people do 80% of the work and as a result have 80% of the wealth. And deservedly so.

Apr 14, 2007 04:50 PM

Martin Rodriguez

Pacific Funding - Valencia, CA

Senior Loan Consultant

Kevin

This rule is applied to many things.. Bottom line is in knowing how to position yourself to achieve certain results.. In other words its like that saying, "less is more.."

As a former HR manager, I used the 80/20 rule by talking only 20% of the time and letting the employee talk 80% of the time. By doing this, the employee becomes the focus of the coversation and the discussion revolves around their comments. I use my 20% of talking to steer the conversation to the desired results. This is an effective tool for managing employees and can also be used for managing your sales and clients.

Try this: When you meet with a client.

Phrase your comments and questions to be open ended and allow the client to speak freely. You stay quiet and only speak 20% of the time. Limit your comments to only clarification type questions and steer the client toward the goal... In the end your client will feel like you heard them effectively and they will own the solution because it came from their mouth. Its theirs. All you did was steer them to it..

Good Post..

Martin

Apr 14, 2007 05:13 PM

Lynda Eisenmann

Preferred Home Brokers - Brea, CA

Broker Associate ,CRS,GRI,SRES, Brea,CA, Orange Co

Hi Kevin,

I think Roger's opinion of the 80/20 (when it comes to real estate) is the most accurate, as least as far as I'm concerned. It's often been said the 20% of people is r.e. make 80% of the money. At this point others may say it's more like 90/10.

Who knows for sure?

Apr 14, 2007 06:20 PM

Jason Vombaur

Keller Williams - Vancouver, WA

Read Gary Kellers Book " The Millionaire Real Estate Agent" I will greatly help you with your business. I have seen people do very well within no time after reading this book.

Apr 14, 2007 06:27 PM

Paul David Hiebing

Grampp Realty: Real Estate in the Quad-Cities - Bettendorf, IA

Quad-City REALTOR®, @ Grampp, Realty of The Q.C.

Actually, (and the statistics I've seen are starting to back it up) in real estate, it it quickly becoming the 90/10 Principal:

In other words, 10% of REALTORS are selling 90% of the properties...

and making 90% of the income....

Apr 15, 2007 10:43 AM

80/20 rule in real estate?

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