I recently sat down with Price Rainer, founder and Realtor at Berkshire Hathaway HomeServices Beach Properties of Florida, to discuss the step-by-step process he and I used in our own businesses that agents can follow to make their dreams a reality.
Step 1: Get clarity on the dream life you desire
The first step in building your dream life is to clearly define how that dream looks. This involves a deep understanding of what your ideal life involves. Does it include travel, luxuries, philanthropy or flexibility? No one dreams of simply getting by, so dream big.
What luxury item would you love to indulge yourself by owning? Where would you love to travel to next year? What charity would you love to support? The more clarity you can get into your definition, the easier it will be to put a plan together to make it a reality.
Step 2: Identify how much this dream will cost
Everything worth having has a cost. The next step in this process is to get a clear understanding of what your dream life will cost.
Start by compiling your living expenses based on the previous year. What are your monthly living expenses including your mortgage, car payment, utility bills, insurance, food, clothing, etc.? This gives you a foundational understanding of the income required to cover the necessities in your life.
Then begin to add up the additional expenses for the additional items you want to include in your dream life. What will it cost to take those family trips next year? What will the indulgences cost? What will the upgrades to your current lifestyle cost? How much do you want to save towards retirement?
Total these numbers and you now have a better understanding of the income needed to build your dream life.
Step 3: Set business goals based on the life you want
For this example, let’s assume your dream life, as outlined above, will cost $184,000 to achieve next year. Don’t forget that the income you make will be taxed, so I like to be conservative and multiply the income needed by 130 percent (overly cautious that taxes and unexpected expenses might be as much as 30 percent more than calculated initially). In this case, $184,000 x 130 percent equals just under $240,000.
Whatever your number comes out to be, don’t be intimidated by it. Do you know anyone in real estate who makes that amount each year? Of course, you do, so why can’t you earn that amount? This is especially true and achievable when we execute on the plan we are about to develop.
The next step is to understand how much your net income was per transaction as an average last year. For this example, I will use $10,000 as the average net commission in your business after splits per transaction.
Based on this information, simply dividing $240,000 (the needed income for the dream life in this example) by $10,000 (the average net commission per transaction in this example), we now understand that 24 transactions will give us the life of our dreams.
Step 3: Develop a listing-driven business model
We’ve identified what it will cost to have the life we desire. Now, let’s turn our attention to building the business that will fund the life of our dreams. Many people get so focused on doing the business that they end up not having the time needed to enjoy the fruits of their labor. I don’t believe you can have the life of your dreams if you don’t develop a business you enjoy doing as well.
An agent who generates most of their business from buyers is a real estate salesperson, while the agent who generates most of their transactions from listings is running a real estate business. The decision on the type of business you focus on is completely up to you, but highly successful agents who find balance predominantly focus on listings. By focusing on listings, you gain control over your business and increase your chances of success.
Step 4: Identify actionable steps for your success
The next step is to develop a plan of action that will lead to your success. What will you do to generate listing and buyer prospects? Will you host open houses? Will you geographically farm neighborhoods? Will you circle prospect or buy leads?
A great exercise at this step in the process is to make a list of all the closings you’ve had over the past five years. To the right of each transaction, note how you initially met the buyers or sellers. Were they referrals or from a mailer you sent? Were they online leads you bought or someone you met at an open house?
Once you’ve identified where each closing was initially generated, total each strategy and compile the percentages of your past business that came from each strategy.
You can achieve your goal in a couple of different ways. You can simply do more of the strategy that worked in the past and less of what didn’t work, or you can implement new strategies for different results.
The more you understand your business and your personal strengths and weaknesses, the easier it will be to develop the strategies that best suit your business going forward.
Step 5: Implement daily practices that are easily trackable
To build a successful business, it’s important to implement daily practices that support your goals. This includes prospecting for new clients, following up with leads, and continuously learning about the latest market trends. Consistency in these practices is key to long-term success.
I’ve always boiled all my activities down to an understanding of how many real estate-related conversations it took on average for me to generate one transaction. Over time I discovered it took me 38 real estate-related conversations to generate one transaction in my business.
Your numbers may be higher or lower, but the industry averages have been widely reported to be 50 conversations per transaction.
What you do to generate these conversations is completely up to you. You can generate them from open house visitors, checking in with past clients, or calling homeowners. Whatever strategy works best for you is the one you should use. The key is having a daily goal and understanding that by your daily actions, you are on track to achieve your annual goal.
For example, if we noted above that we needed 24 transactions to reach our goal, then multiply that by 50 conversations (industry average). This reveals we will need 1,200 real estate-related conversations next year to reach our goal.
This breaks down to 100 per month or 25 per week based on four weeks in each month (which leaves time for vacation during the year). If we plan to make calls on weekdays, this means we need five real estate-related conversations each weekday to reach our goal.
This is easily trackable daily and if you can string three months of consistently making these calls, you will not only see results, but you will also be able to identify the average number of conversations you need to generate a transaction.
Step 6: Include accountability for success
Accountability is crucial in the real estate business. Whether it’s through a coach, a mastermind group or self-imposed discipline, having someone to hold you accountable helps you stay focused and committed to your goals. It’s a powerful tool that keeps you on the path to success.
I can’t think of a single area of my life where I added accountability that didn’t get better. Hire the coach. Join the mastermind. Find a growth-minded friend that you can report to. Whatever it takes, increase the level of accountability you have in your life.
Step 7: Take massive action
Nothing happens until something happens. We can do all the planning we want, but taking massive action is the key ingredient of success. The law of cause-and-effect states that every action produces a reaction. This basically means that you can control the likelihood of your desired reality by the actions you take. This is your time to shine. Take massive action and the results will follow.
Building the real estate sales business of your dreams is a journey that requires vision, hard work and perseverance. By following these steps and staying committed to your goals, you can create a thriving business that not only meets your financial needs but also brings personal fulfillment.