So, how do you make more money in real estate sales? It's really very simple ... all businesses operate with the same principle. You make more money in real estate sales by increasing your revenue and decreasing your expenses! Sounds simple, doesn't it? But wait a minute, if it were that easy, everyone would be doing it ... wouldn't they?
Here are some ideas of ways to increase revenue in real estate sales:
- Sell more expensive properties - let's face it, it's just about as easy to sell a $300,000 house as it is to sell a $150,000 house.
- Charge more in commission - if you are a listing agent, you can generate more revenue by charging more for your services. A half a percent of commission can bring big dividends to your bottom line.
- Earn a better split from your broker - what is your broker's split of your commission? Is it fair for the services they provide? Is there a brokerage that might provide the services you need and offer a better commission split?
- Sell more properties - that's obvious, but how? Maybe you need to invest in your business by advertising or marketing. Most businesses budget at least 1% to 10% of sales volume for advertising.
OK, what are some ways to reduce expenses in real estate sales:
- Stop buying leads! - buying leads is expensive and relatively non-productive. It takes a large volume of leads to produce new business. Marketing to your sphere of influence can be a much better use of your money than buying leads that are strangers.
- Cut brokerage expenses - do you really need to pay for your broker's overhead in office space and administrative staff? Does it make you more money? Maybe it's time to find a brokerage with lower overhead.
- Sell the SUV - sure there's a lot of room when taking clients with you - but how often do you really take clients with you in today's real estate market? You can save a lot in fuel, insurance and maintenance by driving a nice car instead of a big gas guzzling SUV!
- Earn a return on your investment - insist on your money earning a return. When you are bombarded with sales calls from all those companies promising you the next magic bullet, insist that they provide documentation of a return on your investment. You only get paid if you successfully close a transaction. Shouldn't the vendors you work with get paid the same way?
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