Well, the headline pretty much says it all, so let’s dive right in!
I firmly believe that we are quickly moving towards a time where specialization in real estate will become the rule, rather than the exception, just like it has in law, medicine, and many other professional service businesses.
But whether or not that prediction comes true, one thing is certain: Professionals who become authorities or experts in a certain niche—and in real estate, this typically means a specific geographic area, or a particular type of property or type of client—
• Enjoy a greater level of respect from both colleagues and consumers,
• Command higher than average fees for the services they provide,
• Have less real competition from their “generalist” peers, and
• Tend to attract well-qualified clients to them, rather than having to chase after uninterested prospects.
2) Focus on Doing More Profitable Transactions
I had a consulting client a while back who was closing a very healthy number of transactions for a solo agent, but she was running herself ragged and—worse yet—after expenses, she wasn’t making a whole lot of money, especially compared to the amount of effort she was putting in. So, she booked some time with me to help her figure out how she could improve her situation. We wound up making improvements in her business in a number of areas, but here’s one that really made an impact:
She focused on increasing the average price of the properties she was listing and selling.
This agent was working the low end of her market, but with a few changes to her marketing and prospecting and to how she was positioning herself in the marketplace, she was able to increase her average sale from about $120,000 to a bit over $200,000 with no real loss in volume.
At say 2.5% per transaction side, that translated into about $2000 in extra commission for every closing, with no more work on her part!
3) Focus on Working with More Profitable Clients
Just like focusing on more profitable transactions, there are many ways to approach this one and many ways to improve your “profitability per client.” But here’s the most important one, in my opinion:
Stop working with PITA (Pain in the Ass) Clients!
• Stop working with buyers who won’t get pre-approved for a mortgage before starting to look at houses.
• Stop working with buyers who won’t sign a buyer’s representation agreement, or won’t otherwise seriously commit to working only with you
• Stop working with sellers who won’t price their property reasonably.
• Stop working with sellers who won’t follow your advice, with regards to staging and repairs.
I could go on, and I know you could, too, about the kinds of clients that are PITAs. But the point is: Cut your stress levels and invest your limited time and energy more profitably by kicking them to the curb. :-)
4) Stop Doing Minimum Wage Jobs for Your Business
I know you’ve heard this one before, so I won’t elaborate too much. But a couple of times a year, you should do an audit of all the activities you’re doing (or should be doing) for your business. Make a list all of the tasks that are menial, that you hate doing, or that you’re just not good at, and look into delegating, automating, or outsourcing them. You’ll be more effective and less grouchy!
5) Find Your Joy and Passion and Focus Your Energies on That
The best kind of work is the kind that doesn’t feel like work at all. For many of us, our business is one of the central aspects of our lives; it becomes part of who we are.
So, it is very worthwhile to invest the time and effort into molding your business in such a way that you can focus mostly on those aspects that play to your unique strengths, talents, and capabilities.
And guess what? This tends to be more profitable, too. ;-)
[Photo Credit: Tommy Schultz]
Have you changed anything recently that’s allowed you to work less and/or earn more? Are you planning to? Tell us about it!