This last weekend, I had some free time, so I drove out to Carson,CA to drop off a closing package for a client. I didn't have to, but love to see congratulate our clients in person upon a closing...Well, I do not live close by - so it was about an hour and 20 minute drive each way...needless to say ... it gave me some time to think.
As I go on - please forgive me as I jump around - this is just how my mind works - but trust me - it all ties in together!!
We teach a class on Tuesdays together with Brad Yzermans that focuses on helping Realtors get a hold of this market and survive it. We are helping them create a Real Estate Business structure rather than a Real Estate Career....There is a bit of difference. This is what I was thinking about on the way back- and then it hit me like the proverbial ton of bricks....
WHAT IS YOUR TIME WORTH?
Why was this important? I mean we all have the same amount of hours in the day. I'd like to think that we were all created equal - so then isn't our time all worth the same?
Yes and No...You see - We attach Value to our time a little differently. For most, we have been raised and educated that we can trade our time for money, and the money we make determines how much our time is worth. For some it is 8/hr or even 500/hr....so in some sense the person who makes $500 an hour values the services more than the first! By this definition, then our time is worth whatever we are willing to accept in return for it... but wait - how does that apply to Real estate.
Well, for most Realtors, we fall trap to the same mentality. We feel that if we work more hours, we should make more money. Right? To the people in our lives watching us or supporting us in our choice of profession - they see it as if we are not making any money that we have somehow failed. This is the how Realtors with a Real Estate Career or Job look at our profession. I see it in our office all the time. New and experieneced agents working 12-14 hour days thinking that this somehow will miraculously generate more income....this is the fatal flaw and causes Burn out!!
As I continued on my drive, I kept thinking - what can I share with our class that will help them shift in the way they value their time. To make a change that will help them succeed over time....Are your ready?
Your Time is Worth Not What You Make - But What you Give up!!
In College, they called this opportunity cost. It is harder to grasp because it is not tangible. This took me a while to really grasp as I headed South on the 15...Well - What Opportunity? and How does that equate to the value of my time?
The simplest way to explain is by giving an example: In working with one client to close from beginning to end, on average we take home 4500 after the splits.. To make the math simple - let's say we close one deal a month. That means that we are making 4500 per month in exchange for our Time and efforts.
Now let's say instead of just working on this one deal, we handed the deal off to a transaction coordinator who we pay $350 a file for. How much are we making now a month? Most would say 4250? If we go by monetary terms YES!! if we go by opportunity - the NO. You see - for the next 30 days instead of taking care of escrow - we are out generating more business!! If we get just one more transaction in that month - then we our value of time just doubled!! We would be making the 4250+ another 4500!!
Does does this make sense? Would you give up $350 to make another $4500? I certainly would!!
This is what hit me and help me realize the difference between us and those in our classes. We don't value our time in the amount of money we make - but rather in what opportunity we are missing as we spend our time doing something else.
So we came up with a new definition: What is your Time Worth Now?
A: Your time is worth the I know its tough to see:
Opportunity = $4500
TC Take over file = $350
Do it yourself and miss the opportunity, then time is worth $350 minus $4500 missed opportunity= -$4250
Hire someone else to do the administrative tasks and get one more deal,then your time is worth the additional opportunity minus the cost to have the opportunity. $4500 - $350= $4250
In summary - if someone else values their timeat $350 a deal and you value yours at $4500 a deal, pay the person the money to allow you to go out and make another $4500. This will then start you on your road to running a Real Estate Business rather than have in a Real Estate Career.
--All that in my way back and forth...productive use of traffic! Sometimes I wonder how I can drive and think at the same time...LOL. Must have been on Auto Pilot!!
I hope that this helps you in the structure of your business. I see all the top producers in our areas have assistants, systems and work less hours...they put less value on what they give up and more on what they gain!!
Make it a great Week!!
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