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Do you have any idea how many transactions you need to close next year?

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Real Estate Broker/Owner with Tutas Towne Realty, Inc and Garden Views Realty, LLC BK607690

Hi folks. We are quickly closing in on 2010.  With that in mind I am writing this post to give you a very simple way to achieve your financials goals for next year. First I want you to punch your numbers into this chart. We are looking for how much GFI (Gross Commission Income) you need to meet your financial obligations based on the lifestyle you want to live.

Gross Commission Income Chart

The amount of GCI (Gross Commission Income) needed is $117,500. So how do you get there?

  • Average sales price in your market area X the average commission X your % split=Your ADPT (Average Dollar Per Transaction).
  • GCI divided by ADPT divided by 12=How many transaction you need to close per month.
  • Active Listings in your Market divided by Listings Sold Per Month=How many listings you need per sale X transactions you need to close per month= How many saleable listings you need to maintain.

The math based on the numbers in my example would be:

  • $125,000 X .0275 = $3,437 X .70 = $2,406 (ADPT)
  • $117,500 (GCI) / $2,406 (ADPT) = 49 / 12 = 4 (need to close per month)
  • 600 (Active Listings) / 100 (Sold per month) = 6 X 4 = 24 (Saleable Listings)

Based on this example you would need to maintain 24 listings at all times and would need to list 4 a month. Throw in some Buyer deals and you could have a fairly decent year.

The point of this exercise is to show you how to lay out your financial map so you can make sure you are meeting your obligations with ease.

A final tip:

There are only three ways to increase your GCI.

  • Increase the number of units you sell.
  • Increase the sale price of the units you sell.
  • Increase the fees that you charge.

Does this help?

Do NOT be foreclosed on! Avoid foreclosure. Short Sales DO close.

Want to find out more? www.CentralFloridaShortSales.com

 

The BIO for Bryant Tutas

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The BIO for Bryant Tutas

 

 Tutas Towne Realty, Inc handles Florida real estate sales, Florida short sales, Florida strategic short sales, Florida pre-foreclosure sales, Florida foreclosures in Kissimmee Florida Short Sales, Davenport Florida Short Sales, Haines City Florida Short Sales, Poinciana Florida Short Sales, Solivita Florida Short Sales,  Orlando Florida Short Sales, Celebration Florida Short Sales, Windermere Florida Short Sales. Serving all of Polk, Osceola and Orange Counties Florida. Florida Short Sale Broker. Short Sale Florida.

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Comments(101)

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Brenda Jackson
John J. Howard & Associates - La Grande, OR

Fail to plan...plan to fail!

 

 

 

 

 

Dec 21, 2009 09:40 AM
Jason Crouch
Austin Texas Homes, LLC - Austin, TX
Broker - Austin Texas Real Estate (512-796-7653)

Bryant - Thanks for putting things in perspective.  It's one thing to wish for the best, and it's another to plan specifically for the needed outcome. 

Dec 21, 2009 09:47 AM
Christianne O'Malley
Dickson Realty - Reno, NV
Exceptional Service - Delivering Results in Reno!

Hi Bryant - We figured out at the beginning of the month how many deals we "need" and then set the bar higher. Our goal is 50 transactions next year (mine is 60 personally) based on the average sales price in our market. After all, we set the goal for 28 this year and we did 36 :-)

 

Dec 21, 2009 10:14 AM
Russ Ravary ~ Metro Detroit Realtor call (248) 310-6239
Real Estate One - Commerce, MI
Michigan homes for sale ~ yesmyrealtor@gmail.com

Thanks for sharing.  I want to do at least what I did this year.  I hope it is a goning to be a great year. 

Dec 21, 2009 10:58 AM
Kimberly Harris
Real Estate One,Macomb County, MI - Clinton Township, MI

Great post! This is a tool that I will absolutely use-I was hoping to find something that would help me with my marketing plan for 2010.

Dec 21, 2009 12:11 PM
Roland Woodworth
Blue Cord Realty - Clarksville, TN
Benchmark Realty

Great chart BB....  Like Missy's idea... Google Doc.  Thanks for sharing

Dec 21, 2009 01:37 PM
Jason Sardi
Auto & Home & Life Insurance throughout North Carolina - Charlotte, NC
Your Agent for Life

After all this time...

This post articulates Financial Maturity & Perspective in every way.  This isn't just a Road-Map, it's a lesson in reality. 

Despite your facebook picture on the far right of your profile, you're still the man.  Legends never die.

Dec 21, 2009 01:48 PM
Sharon Alters
Coldwell Banker Vanguard Realty - 904-673-2308 - Fleming Island, FL
Realtor - Homes for Sale Fleming Island FL

Bryant, thanks for the reminder. My spreadsheed is a lot more detailed but this really covers it in a more simplified fashion.

Dec 21, 2009 02:48 PM
Christine Donovan
Donovan Blatt Realty - Costa Mesa, CA
Broker/Attorney 714-319-9751 DRE01267479 - Costa M

I've seen a lot of this information before but not how to decide how many listings are needed based on the rest of the numbers.

I'm with Loreena; 2 year olds are expensive, and 6 year olds are no cheaper.

Dec 21, 2009 03:30 PM
John Cannata
214-728-0449 http://TexasLoanGuy.com - Frisco, TX
Texas Home Mortgage - Purchase or Refinance

This is the type of thing I use to figure out what my goal MUST be... then of course I increase that number.

Dec 21, 2009 03:40 PM
Emily Lowe
RE/MAX Homes and Estates, Lipman Group - Nashville, TN
Nashville TN Realtor

I'm working on one that is very similar to this one.  It's really helpful and I hope I can reach my goals in 2010!

Dec 21, 2009 03:57 PM
Frank Castaldini
Compass - San Francisco, CA
Realtor - Homes for Sale in San Francisco

I know exactly what I want to accomplish number wise.  I only share it with one or two people and certainly not all over the internet.  But it's going to be a very juicy number.

My focus in on great customer service and strong marketing.  Based on my approach I don't worry about my expenses since I do very well.  I will say that I have a natural ability to control costs so it's never been much of an issue for me.

Dec 21, 2009 05:25 PM
Gene Riemenschneider
Home Point Real Estate - Brentwood, CA
Turning Houses into Homes

That is a good way of looking at it.  My goals need to change because the average sales price has dropped and my commission.

Dec 22, 2009 04:29 AM
Brad Andersohn
Retired Executive Director of Education at eXp - Boulder Creek, CA
ActiveBrad - 707.646.1876

Hey Broker B - can I give my program a plug here? I'm not trying to spam you, I promise, it's relevant to your topic.  :-))  (Delete this comment if not), but I created an app called Agent Assist that will will help calculate the required homes sales to achieve a financial goal. It works great and I have had thousands of Agents and Brokers download it.  I used an excel spreadsheet and a couple formulas to simplify it for the end user.  If you want me to send you a copy, just let me know. Thanks. 

Merry Xmas to you, TLW, and the family.

Dec 23, 2009 02:25 AM
Dana Devine
Charles Rutenberg Realty - Apollo Beach, FL

i am now sick  i am just going to drink

Dec 23, 2009 11:27 AM
"The Lovely Wife" The One And Only TLW.
President-Tutas Towne Realty, Inc. - Kissimmee, FL

Blog-N-Roll Brad...

Plug away. Just don't break this blog :)

TLW...ROAR!

Dec 23, 2009 11:11 PM
Gerry Khatchikian
Red Lodge, MT
ASA, TRC, SFR

Bryant,

Thank you for helping us do the math and plan better for 2010!

Dec 26, 2009 06:22 AM
Katerina Gasset
The Gasset Group & Get It Done For Me Virtual Services - Provo, UT
Amplify Your Real Estate & Life Dreams!

Bryant- I missed this post. I don't know how, probably arguing with idiots at BofA got me off track on AR last week:) 

We know that if you have at least 40 to 50 listings- you will get 4 of those to close each month. We are very strict with our biz plan, Nestor is a #s man and I am very strict in keeping those #s in line with projections and then adjustments. 

Dec 26, 2009 10:40 AM
Wayne B. Pruner
Oregon First - Tigard, OR
Tigard Oregon Homes for Sale, Realtor, GRI

I like your figuring. Our health insurance is now $500. more per month than our mortgage. That's sad.

Dec 29, 2009 03:36 PM
Tracy Santrock
Santrock Realty Group Inc. , - Cary, NC
Raleigh - Cary Broker

This is similar to the worksheet I got in my CRS class which has been very helpful w/my accountant. I actually incorporated this year and have really focused on growing my business in 2009.  Now if I can just hire someone to help(I mean good help) I'd be in good shape for 2010!

Jan 03, 2010 08:28 AM