With everything that’s going on with the economy and real estate agents struggling, it’s time to discuss how to cut your business costs so you can keep more of the money you make.
1. Bring your lunch and coffee to work – This is right out of David Bach’s Automatic Millionaire series, and it’s such common sense. These days, with tax and tip, ordering lunch is about $10 a day. Add to that you’re morning large double half-caff, light, skim mocha choca loca boca with whipped cream at $3-$4 a day (and I’m not even including the bagel you bought for breakfast) and that’s $250-$300 bucks a month you’re spending in a 5-day work week. For some, that’s a car payment. Whatever it is to you, it’s unnecessary spending.
Buying a pound of turkey and loaf of bread is infinitely less. You’ll spend about $10-15 a week, instead of in a day.
It’s the same thing with coffee. Even if you have to initially buy a coffee maker, that expense will get amortized over the course of your career, and be much less expensive in the long run. Get a gallon of high-test from the grocery store at around $10-15 and it’ll last you the month. Splurge for a travel mug at $2.99 and you’ll have that for years.
2. Quit smoking – I don’t want to be judgmental, but the package of cigarette’s practically says “Smoke these and you WILL die early.” Folks, let’s face it, smoking is out, like the mullet haircut and the leisure suit. Smoking does things to your system that will take you off you’re “A” game. And when you gotta get that last puff in before you walk into a potential seller’s house…they can smell it. We all can. Besides, at more than $5.00 a pack, that’s just a ridiculous expenditure, and it adds up horribly fast. I’m not on high here, I used to smoke. I know the addiction, I know the relaxation with a cup of coffee. I know the socialization out at a bar with some drinks. I’ve been there and done that. But with everything they now know about smoking, why would you spend money to basically ensure a slow, painful death?
If you want to stop, I mean you really want to, I can help you. Shoot me an email and I’ll put you on that path.
3. Don’t pay for advertising – First of all, you should never advertise yourself. If you do advertise, only advertise your listings. Advertising yourself is completely egotistical, and it takes so much time and money before anyone will call you based on just seeing your smiling mug with that stupid phone on your ear, it’s a complete waste and will eat your profits like nothing else. Buyers only call on houses they are interested in, they don’t call for you.
Now, even though the industry standard percentage of buyer sign and ad call-in’s/internet leads to appointments set is extremely low (considerably less than 10%), I understand the need and want to advertise your listings. In that case, instead of haranguing your title and mortgage people to foot the bill for those useless broker-open houses, have them subsidize your advertising (pages in magazines, just listed/just sold post cards, etc.). And think outside the box; perhaps a home inspector or warranty company would be interested. Do what you can to NOT pay a dime for your advertising.
4. Manage your time to the utmost – This is the biggest downfall, and by far the most expensive issue for real estate agents. Most agents do not follow a schedule. They do things in order of importance in the moment. They answer any phone call at any time, no matter what else they’re doing at that time. They are task oriented instead of time oriented. They’re on the schedule of anyone who wants their time.
This is hugely inefficient. It drains your energy. It causes you to work harder and more stressed out. And, business constantly slips through your cracks…costing you money! Ever know of an agent who got so busy with other things they forgot to follow up on a lead and found out they listed with someone else? The more you manage your time, the less money you’ll lose (or the more money you’ll make).
5. Only deal with totally qualified buyers and sellers – In case you haven’t noticed, gas is starting to creep up again. Driving 45 minutes one way to a listing appointment to find out they can’t sell is a ridiculous waste of your time, money and energy. You need to pre-qualify every listing appointment you set. You have to find out why the want to sell and if they even can sell, at the very least. Then you can make a business decision as to whether you want to go on that appointment. Owning a house and wanting to talk to you does NOT equal a qualified, motivated seller.
For buyers, as a rule, you should first meet them in your office. Spending an hour with a buyer at your office, gaining rapport, finding motivation, connecting and finding out how you can best serve them will save you hours and hours of driving them around, meeting them at the property they call in on, and all sorts of other hoops many agents jump through, only to find the buyer didn’t buy with them.
6. Practice – Practice scripts, presentations, objection handlers…everything you say to a potential buyer or seller should be practiced and polished. The better you are, the easier it will be to get them to sign the contract. The more contracts signed, the more money you’ll make.
7. Gold Standard Listings only – Especially in this market, you absolutely CANNOT afford to take listings that are overpriced or for cut commissions.
An overpriced listing will cost you more than you’ll ever know in time, energy and money because it WON’T sell.
The same goes for a cut commission listing, but there are exceptions to the rules. So, let’s say it does sell. You’ve just done all the same work you would do for a full commission listing, yet you get paid less money. If you had practiced (see? I told you it would help), then you would have been able to successfully take the listing at a full commission, and therefore got the property sold faster and made more money quicker…for the same amount of work.
As you see, cutting costs isn’t just about spending less money, it’s about the best utilization of your time. It’s about efficiency. Work smart. Make more money. It’s that simple.
***My partner Christy Crouch and I, here at You’re The Difference, want to help you cut costs with some training products. Starting Monday, February 2nd, we’re going to announce a huge product sale for our objection handler product line during the month of February that will be light on your wallet and help you get more contracts signed. Stay tuned for details.