Are you a successful real estate agent? Did you make over $100,000 last year?
If the answer is “yes,” then chances are you have a lot of traits in common with other realtors and mortgage professionals that are thriving in their professions. It’s no accident that your work ethic, discipline, and other business practices have led you to those accomplishments.
Inman News conducted a detailed survey of realtors from December, 2011 to January, 2012. They polled for 1,368 responses with 80 questions covering compensation, transaction activity, spending on technology and marketing, views on the effectiveness of various marketing techniques, brokerage practices, and time spent on a range of business activities.
Here, I separate out the data comparing middle or low income realtors versus those who make $100,000 and up. That allowed me to extrapolate 8 basic rules of success worth emulating if you’re an agent trying to climb the ladder of success.
1. Bigger transactions.
Nearly 50% of middle-income agents had an average transaction amount under $250,000. About 30% of high-income agents had a transaction size of over $450,000. The lesson? Focus on selling houses with big price tags.
2, Specialize in luxury homes, not first-time buyers or REOs.
High-income agents were more likely to specialize in luxury homes, condo, and townhouses than middle-income agents, who tried to specialize in first-time homebuyers or real estate owned homes (REOs).
3. Higher commission splits.
31% of middle-income realtors reported commission splits of 70/30, while 15.5% had 80/20 splits and only 12.4% a 100% split. However, of high-income realtors who made $100,000 a year or more, 26.5% of them received 100% commission splits, and realtors who made over $200,000 were 33% likely to get a 100% commission.
4. Work more hours.
40.7% of middle income realtors reported working 20-40 hours a week, while only 34% worked 40-50 hours. However high-income realtors clearly worked more: 42.1% worked 40-50 hours a week and 41% said they worked 50 hours a week or more. Among those making $200,000 or more, at least half of them said they worked more than 50 hours a week.
5. Hire an assistant.
85.7% of middle income earners did not have an assistant, while over 50% of all high income earners had at least one assistant.
6. Choose a brokerage for the right reasons.
The vast majority of respondents said they were considering leaving their brokerage in the next year. But middle-earners cited a higher split as the reason they’d jump ship, while high-income agents gave the reasons of better support, technology, culture, and long term vision from a different brokerage.
7. Invest in marketing.
63% of high earning agents spend more than $5,000 a year on marketing, while the same percentage of middle income realtors spent $2,500 or less. Of those who made $200,000 or more, 42.4% said they spent more than $20,000 a year.
8. Spend more time with clients.
60.7% of high-income realtors reported spending 10 hours or more each week with clients, while only around 50% of middle income realtors did.
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Stay tuned for part 2 of this study, which documents Realtor success and the use of technology and social media.
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